A leadership approach for the next generation. Analysis of existing leadership methods and applications for the Generation Y

Table of Contents

1. Introduction
1.1. Problem Statement
1.2. Structure and Objectives

2. Generation Y
2.1. Disambiguation and Demarcation
2.2. Characteristics
2.2.1. Basic Impulse
2.2.2. Motives
2.3. Social Behavior
2.3.1. Media
2.3.2. Communication

3. Working and Leadership Environment
3.1. Attitude to Work
3.2. Organization and Hierarchy
3.3. Leadership Requirements
3.4. Superordinate Strategic Tools
3.4.1. Motivation 3.0
3.4.2. SCARF-Model
3.4.3. VIE-Model
3.4.4. Tit-for-Tat Strategy

4. Leadership Methods
4.1. Behavioral Approaches
4.1.1. Bottom-up Approach
4.1.2. Transformational Leadership
4.1.3. Dialogical Leadership
4.1.4. Behavioral-Situational Leadership
4.2. Value-based Leadership
4.3. Meaning-oriented Leadership
4.3.1. Resonant Leadership
4.3.2. Servant Leadership
4.3.3. Leading by Meaning
4.4. Shared Leadership
4.5. Further Approaches
4.5.1. Magnet-for-free-Radicals Approach
4.5.2. Structural-Holes Approach

5. Conclusion

6. Outlook

References

1. Introduction

1.1. Problem Statement

“The best companies create no customers, they create fans”¹, as postulated by Peter F. Drucker. For many companies it is an obvious target in the customer loyalty process to develop a customer to a fan. And that is not limited to the corporate activities in social media. A fan has a strong emotional relationship to his reference project (long-term level of relationship), therefore, a fan creates a special behavior regarding this object (e.g. loyalty) and distinguishes itself thereby active from other (e.g. fan community).² Before a company can develop its customers into fans, it has to transform first of all its employees to fans. Besides this task of internal staff transformation, organizations have to attract potential employees and that will work better if they are even fans of the company.

Not least because of the skills shortage, the so called war for talents and the demographic change, employer attractiveness is one of the main decision criteria of the Generation Y that dominates today’s labor market.³ The question is how can companies win this generation of employees and get a like. Employers need a like of their future employees because without a like a future recruitment of them will not be possible. The so-called branded society has expanded to the branding of employers.⁴ And it is very difficult to escape this development if companies want to be attractive to this generation.

This results in two fundamental issues for decision-makers, executives and personnel specialists, similarly: they wonder and must find a solution for the same, how their companies can become attractive for the new generation - in the current situation the Generation Y - and how executives can do justice this generation in their lifestyle and attitude to work.

1.2. Structure and Objectives

According to Steffi Burkhart, the discussion about the Generation Y “includes a total changing world of work - in which the Generation Y takes on the role of a pioneer. Not all and not for all. But even for a lot: it questions existing success patterns of work and leadership, brings the baby “internet" to run, builds a digital reality and transmits the local rules of the game in the analog world of work, it thinks more in We as in I, impresses a new learning culture, devalues classic role models, lives diverse curricula vitae and learns quite early to cope with the growing complexity.”⁵ About the Generation Y is reported and discussed in many contexts, inter alia, how their behavior affects and will affect society, organizations, leadership and many other areas.

This study aims to answer how the Generation Y has brought and will bring a new way of working to the companies and how the leadership methods and management organization in companies are influenced. The analysis is based on both scientific researches as well as on experiences of representatives of the Generation Y. In chapter two the Generation Y is defined and analyzed in general, concerning characteristics and social behavior. The study is limited to the relevant factors and reasons why Millennials act like they do. The third chapter cares about the working and leadership environment of the representatives of the Generation Y and focusses on their attitude towards work and internal organizational structures. One key aspect will be their expectations for leadership, the other core area will be some selected superordinate strategies that match to their attitudes and that can be implemented in organizational structures. Chapter four discusses and evaluates a selection of existing leadership models and some new or modified approaches in matters of the demands of the Generation Y. After a short summary of the whole study in chapter five, some unconsidered topics are mentioned in the last chapter and an outlook is given.

2. Generation Y

2.1. Disambiguation and Demarcation

In literature there are a variety of definitions regarding the birth cohorts of the Generation Y⁶. The different perceptions begin with the age group of 1977 and end in the year 2000.⁷ Some classifications only start with the year 1985.⁸ Mostly, this generation is classified between 1980 and 2000.⁹ The selected terms for Generation Y are also different and range from trophy kids¹⁰, about generation maybe¹¹ or generation internship to digital natives, net generation or Millennials.¹²

This group is compared to the previous age generations better educated, has a greater self-determination and a higher affinity for new technologies. Not every individual in this age cohort has all the characteristics that are attested to this generation: While the extreme manifestation in terms of enthusiasm for technology and utilization are digital natives, there is the other extreme of lost people which have few to none of the defined attributes because of financial reasons or a lack of educational opportunities. This group includes about 20% of adolescents.¹³ The SINUS youth study confirms for the third time (in 2008, 2012 and 2016 for teenagers between 14 and 17 years) that there is not only the youth, but that major sociocultural differences exist within the cohort.¹⁴

However, “the intensive debate with (the Generation Y) has led in recent years that it was stronger than any other generation before pigeon-holed and lumped together. (…) The Generation Y is no generation of clones, that goes uniform and homogeneous through the world. It is a generation of unique people. However, it is also true that the members of Generation Y are more similar to each other than the members of other generations.”¹⁵

2.2. Characteristics

2.2.1. Basic Impulse

Philipp Riederle defines the lifestyle of this generation with the central question: “What drives you?”¹⁶ and describes its own drive with: “I was interested in helping others, and if it had been just one single man.”¹⁷ In this context, the extended inner drive of this generation and the higher degree of altruism becomes clear.

And this fundamental change of attitude presents many companies with challenge: Bob Moritz¹⁸ applies to his company that the Generation Y employee no longer call for recognition and status symbols as it was customary for an employee in the past, but this new generation requires a higher appreciation. This challenges the organization that was designed for a hierarchical reward system.¹⁹

2.2.2. Motives

The difficulty in categorizing people after generation membership is the generalization of conclusions on the entirety of the generation. By contrast, it has been found that at an aggregate level, the generation membership is a significant dimension of a behavioral analysis.²⁰ Uwe Schirmer et al. concede: “Starting from the common socialization and the resulting values and attitudes, conclusions can be drawn which demands members of the Generation Y have to leadership.”²¹

In a kind of meta-study, Nils Schulenburg summarizes out of 50 attributes from different scientific researches the ten most typical characteristics of the Generation Y. These provide a basic understanding of their motives focusses on their working environment and behavior:

1. high informationalisation²²

describes the importance of information and its flow and means charging and charged with information. The distribution and availability of information technologies has meant that this generation has a special competence in information gathering and processing. “This results in a claim to a permanent flow of information, according to social-media activities, for feedback (…).”²³

2. strong performance orientation

is based on a new perception of working performance: Work activity is not only livelihood, it is more than ever an instrument of self-realization. Extrinsic motivation fades into the background and intrinsic motivation²⁴ intensifies “(…) away from a must-work for money towards to a can-bring- performance for self-realization.”²⁵

3. high education level

representatives of the Generation Y stayed longer in education and this causes that they are used to learn and that they want to apply what they have learned during their education and profession.

4. strong community orientation

social belonging and relationship gets an increasing importance²⁶ for this generation because the circle of friends replaces in entirety the relationship with the family.

5. high flexibility

due to the experienced economic and political changes in their socialization and higher competition in their workplace, these representatives are more open to the increasing changes in organizations.

On the other hand, they also have this request of flexibility to their environment concerning working time or job design.

6. low power distance

the general acceptance of hierarchical power and the associated power projection is suspect for this generation. A low power distance is significant because for this generation there is no reason for an unequal distribution of power in companies.

7. strong self-esteem

the optimistic attitude and an high sovereignty is due to the steady courtship: by their own parents, by potential employers and by the economy in a buyer’s market. As a result, they have a more individualized treatment and larger demands on their job.

8. high independence orientation

self-determination and self-realization are results of liberalizations tendencies during their growing-up. In the working environment the effect is a higher focus on the work-life-balance.

9. strong skepticism

van Rooi certifies that the Generation Y is “extremely critical of anything made into an absolute truth”²⁷. Consequently, representatives require a confirmability for evaluations, instructions or decisions.

10. high globality

this means not only a global thinking but an overarching attitude concerning acceptance, cosmopolitanism.²⁸

The characterization shows the generational shift in values of the Generation Y in working life and forms the basis for the analysis of the requirements for future leadership. Here it should be mentioned, that - regardless of the generation belonging - needs and motives change due to status and knowledge during the course of working life. Jutta Oertel calls this development life phase related characteristics.²⁹

A useful instrument to understand shifts of values within societies or generations is the spiral dynamics model. Don Beck and Christopher C. Cowan developed this model that analyzes these value shifts. Spiral dynamics can be used to explain the changes that occur in connection with the entry of the Generation Y to the working world:³⁰ “it’s about more than money, it’s about more than work. The focus is rather value of life in the original meaning, wherein values of course constitute a central base.”³¹

2.3. Social Behavior

2.3.1. Media

How important it is to get a like, answers Riederle with the quote what the Generation Y drives: “Like or not like, that is the question.”³² And Millennials are looking for followers - they are looking for fans, because fans reflect properties which they wish to represent themselves and generate trust: “Confidence grows for them from the fact that others also find good what they like (I like it), (…)”³³ Like or unlike are criteria that rate personal qualities.³⁴ Transferred to social media applications (like facebook, Instagram or YouTube) the obligatory like (or unlike) has the same function. A like is a positive (or negative) confirmation of a certain activity.

A fan is characterized by a steady relationship and a tireless endurance, a fan is a permanent ambassador, a generator of impulses, an innovator and a multiplicator of beliefs.³⁵ Fans are not necessarily (close) friends or confidants. Fans are rather contacts, acquaintances and as discussed before a kind of provers of customs. Riederle analyses that in general “relationships with our friends last longer and are more intense and settled than the generations before us.”³⁶ Also Schulenburg confirms a growing importance of friendship.³⁷ Friendships are more project-related and are maintained via social networks and online applications.³⁸

2.3.2. Communication

In the formative stage of development of the Generation Y, the use of the internet with “the desire for access to the global information network, (…) to participation, networking and co-design”³⁹ became a self-concept. In terms of communication is not only the demand for speed but also for accessibility.⁴⁰

Social media applications, whether more in private use (like facebook) or more in business use (like Xing or LinkedIn), whether focused on written text (like WhatsApp or Twitter) or on posted pictures (like Instagram), are used for information retrieval, knowledge acquisition and as communication tools. This triple use of media is typical: It is no longer a clear distinction between information, communication, knowledge and finally entertainment (such as via YouTube). Companies must deal with that because rules in the internet are moving into real (and business) life, communication is no longer hierarchically, but on an equal level.⁴¹

3. Working and Leadership Environment

3.1. Attitude to Work

Terms - still common for many employees nowadays - like dependent employment, gainful employment, internal termination, dissatisfaction at work⁴² sound like fallen out of time for the Generation Y. Catharina Bruns postulates that work is not a job and implies thereby some general principles for Generation Y employees concerning their attitude to work⁴³:

“Work is the transfer of energy.”⁴⁴

“We’d like to transfer our energy into something creative and inspiring”⁴⁵

“When you do what you love everyday, if you get up and you’re excited about what you do, it’s good for everyone.”⁴⁶

“Have a vision to strive for”⁴⁷.

Consequential, Sven Gábor Jánszky researches possible implications for organizations and assumes that companies are classified into two categories in the future: caring companies and fluid companies. Here, mainly two main factors gain in importance: First, what is the attractiveness of the company location (infrastructure, urban lifestyle, etc.) and secondly, how can the company contribute to increase the personal market value of the employees (see magnet- for-free-radicals-strategy). Fluid companies are named after because both, activities as well as the boundaries between departments are in a constant state of flux and work is mainly organized in internal or external project teams. Fluid companies are - compared to caring ones - very popular with employees. Caring companies do not succeed in employee recruitment, these companies have to do everything possible to keep their employees.⁴⁸ “Every step of the way, Millennials want to find a work situation they can fit into the kind of life they are building for themselves. Because they grew up overly supervised, coached and constantly rewarded by their parents.”⁴⁹ Millennials do not need a veritable playground, in general, they need clear ground rules.⁵⁰ Bruce Tulgan focuses on a loco parentis management⁵¹ for Millennials that show them that executives care, “give them boundaries and structure”, “help them keep score” and that executives “negotiate special rewards in very small increments.”⁵²

In general, Jánszky projects that candidates will check in the future if the potential job can meet certain requirements and will ask the following questions⁵³:

- Does this job represent a personal challenge for me?
- Does this job contribute with a greater sense of the society?
- Does this job include excellent people in the team?

In addition to that, employers have to consider that employee retention is based on a high identification with the company, more than ever. Helpful in this, is a so called identity anchor that concentrates success factors for increase of identification.⁵⁴ A prime example and thus representative of the Generation Y is the triad of the identity anchor of Google:

- mastery: employees are able to provide best performance that represents their personal mastery.
- autonomy: employees are able to set the degree of freedom in their workspace based on their need for autonomy.
- impact: employees are able to recognize a relevance in their performance.

The intrinsic motivation for fulfillment of their tasks and their impact on value creation for the company is a superordinate driving force.⁵⁵

¹ Drucker (2009), p. 68 (German citation translated by author)

² cf. Becker/Daschmann (2015), p. 14

³ cf. Ruthus (2014), p. 1 - 3

⁴ cf. Parment (2013), p. 107

⁵ Burkhart (2016), p. 9 (German citation translated by author)

⁶ the letter “Y” (in German also pronounced why) is chosen because a lot of obvious things are questioned by this generation (cf. Parment (2013), p. 1)

⁷ cf. Bund (2014), p. 12

⁸ cf. Hurrelmann/Albrecht (2014), p. 17

⁹ cf. Schulenburg (2016), p. 1; cf. Moskaliuk (2016), p. 1; cf. Ruthus (2014), p. 7

¹⁰ cf. Tulgan (2016)

¹¹ cf. Fintz (2014), p. 3

¹² cf. Ruthus (2014), p. 7

¹³ cf. Bund (2014), p. 14

¹⁴ cf. Calmbach/Borgstedt/Borchard/Thomas/Flaig (2016), p. 14

¹⁵ Schulenburg (2016), p. 1 (German citation translated by author)

¹⁶ Riederle (2013), p. 78 (German citation translated by author)

¹⁷ Riederle (2013), p. 83 (German citation translated by author)

¹⁸ Bob Moritz is since 2009 chairman and senior partner of PwC

¹⁹ cf. Moritz (2015), p. 71 - 73

²⁰ cf. Parment (2013), p. 17

²¹ Schirmer/Kiesling/Nolde/Spengler (2014), p. 24 (German citation translated by author)

²² informationalisation is a neologism introduced by Schulenburg

²³ Schulenburg (2016), p. 11 (German citation translated by author)

²⁴ in contrast to the outside controlled extrinsic motivation, the intrinsic motivation refers to the internal drive which animates to perform a task. (cf. Pink (2010), p. 11 - 19)

²⁵ Schulenburg (2016), p. 11

²⁶ in addition to power and achievement, affiliation is a basic need. These basic needs have been defined as big three by David McClelland and John Atkinson (cf. Westerhoff (2010), p. 78)

²⁷ Schulenburg (2016), p. 16

²⁸ cf. Schulenburg (2016), p. 10 - 17 tolerance, diversity-orientation and

²⁹ cf. Oertel (2014), p. 48 - 50

³⁰ cf. Werther/Jacobs (2014), p. 17 - 19

³¹ Werther/Jacobs (2014), p. 18 (German citation translated by author)

³² Riederle (2013), p. 73 (German citation translated by author)

³³ Götz (2014), p. 27 (German citation translated by author)

³⁴ cf. Fintz (2014), p. 23

³⁵ cf. Becker/Daschmann (2015), p. 17 - 27

³⁶ Riederle (2013), p. 29 (German citation translated by author)

³⁷ cf. Schulenburg (2016), p. 57

³⁸ cf. Fintz (2014), p. 23

³⁹ Ruthus (2014), p. 14

⁴⁰ cf. Ruthus (2014), p. 14

⁴¹ cf. Burkhard (2016), p. 33

⁴² cf. Bruns (2013), p. 19 - 20

⁴³ following quotes selected by author

⁴⁴ Bruns (2013), p. 18

⁴⁵ Bruns (2013), p. 36

⁴⁶ Bruns (2013), p. 195

⁴⁷ Bruns (2013), p. 211

⁴⁸ cf. Jánszky (2014), p. 39 - 43

⁴⁹ Tulgan (2016), p. 10

⁵⁰ cf. Tulgan (2016), p. 15, 129

⁵¹ means “in the place of a parent” (Tulgan (2016), p. 60)

⁵² Tulgan (2016), p. 60

⁵³ cf. Jánszky (2014), p. 36

⁵⁴ cf. Jánszky (2014), p. 36

⁵⁵ cf. Jánszky (2014), p. 36