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Drucker Today

Peter Drucker on Leading Millennials

Robert W. Swaim
Contributor: Robert Swaim, Ph.D.
Posted: 12/21/2016

A New Industry or Fad?

While recently reviewing The Wall Street Journal along with my morning coffee, I came across an article discussing the growing number of intergenerational consultants, particularly those that claim to be experts on young Millennial workers.

According to WSJ, "Millennial issues also have become a source of income for a host of self-anointed experts who say they can interpret young worker's whims and aspirations—sometimes for as much as $20,000 an hour."  

I immediately saw visions of Johnny Carson (for the benefit  of Millennials, Carson hosted The Tonight Show for 30 years from 1962-1992), as the Carnac the Magnificent opening the envelope and predicting what the questions was in response to Ed McMahon's statement of the answer. Was this interpreting whims? 

The article also cited Source Global Research, a firm that tracks the consulting market, where they estimated U.S. organizations spent between $60 to $70 million on generational consulting last year. And a quick LinkedIn search shows more than 400 users list themselves as a "Millennial expert" or "Millennial consultant."  That's a lot of whims and aspirations interpreters.    

Needless to say, this piqued my curiosity, and I wondered what my friend Peter Drucker would have said on this issue if he were alive today? But first, what is the size of this market and what are the so called "experts" selling?

Did I miss out on a new consulting gold mine while spending the first decade of this century teaching Drucker MBA courses in China? I really don't think so.

This new consulting opportunity ranks up there with Quality Circles, Behavior Modification, Transactional Analysis, and other fads.   

Who Are Millennials and What Is the Size of the Market? 

Millennials, or "Generation Y" are defined by many as those individuals born between 1982 and 2004. They follow "Generation X," those born between 1965 and 1981.

According to the Pew Research Center, there are now 75.4 million Millennials, surpassing the 74.9 million "Baby Boomers," those born between 1946 and 1965, as the largest segment of the U.S. population. 

With respect to demographics, Pew also noted that 57 percent of this group are white (the smallest percentage of all generations), 21 percent are Hispanic, 13 percent black, and 6 percent Asian.

It should be noted that all demographics reported by Pew Research use 2014 as their basis of comparison with other generations (see Table 1). 

Table 1

Only 28 percent of Millennials are married compared to 65 percent of Gen X, 66 percent of Baby Boomers, and 60 percent of Silents, those born between 1928 and 1945 (including this writer).

Many Millennials are still not of the marrying age, and people in Gen Y tend to wait longer to longer to get married than previous generations. Many, mostly males, still live with their parents. 

Better Educated or Just More Time in School?

Many claim Millennials are, or will be, the most educated generation. Although they are digitally astute and have the fastest thumbs in the West, it does not appear that Millennials are a bunch of little Einsteins and intellectual giants requiring special consideration. How do American Millennials compare to their counterparts in other parts of the world? 

A report produced by the large testing organization, ETS, analyzed data collected by the Program for the International Assessment of Adult Competencies (PIAAC).

The study compared U.S. Millennials—those between the ages of 16 and 34—with their international counterparts in approximately two dozen countries.

The analysis found that more than half of U.S. Millennials lack proficiency when it comes to applying reading and math skills in the workplace. The following were some of the findings from the study:  

  • Even though U.S. workers complete high school and college at rates similar to those in high-performing countries, U.S. PIACC scores for workers ages 25 through 34 are on par with those in the least educated participating countries and territories. 

  • On literacy, America's Millennials posted an average score of 274 on 500-point scale, while the average among participating countries is 282. 

  • On numeracy, U.S. Millennials are in a statistical dead heat with Spain and Italy for last place with an average score of 255, while the average for participating countries is 275 on a 500-point scale. 

  • One half of U.S. Millennials scored below the threshold that indicates proficiency in literacy. By comparison, high-flying nations like Finland and Japan had between 19 percent and 23 percent of their Millennials miss the threshold for proficiency in literacy.

  • Those same countries had roughly one third of Millennials miss the proficiency cutoff score in numeracy, while roughly four in ten Millennials in countries like the Czech Republic, Slovakia, and Estonia performed below proficiency. Two-thirds of U.S. Millennials missed the cutoff mark in numeracy.

  • The U.S. had the largest gap in numeracy scores between its Millennials in the bottom- and top-10 percent of all performers, and both U.S. groups posted some of the lowest scores compared to other participating countries.

  • Perhaps more unsettling, the report indicates that the literacy and numeracy skills of U.S. workers today have largely declined compared to those in the labor force two decades ago.

Jay Walking and Watter's World

Many years ago in order to determine if one was "mentally challenged," people would ask, "Who is buried in Grant's Tomb?"  

Today, we have only to observe the on-the-street interviews with Millennials, previously conducted by Jay Leno in his "Jay Walking" skits on The Tonight Show and now "Watters' World" with Jesse Watters on The O'Reilly Factor. 

One edition of Watters’ World quizzed Americans about Memorial Day, the Revolutionary War, the Civil War, and several other wars.

The majority of Millennials could not answer many of the questions. As an example, with respect to a question about the Civil War, after several prompts that the war was fought between the North and South, a Millennial assumed this was between North American and South America—duh.

Many did not know who we fought in WWII or in what country the Vietnam War was fought.

Perhaps a new version of the Grant's Tomb question, Millennials were asked: "When was the War of 1812?"

The few who ventured an answer felt it was sometime in the 1800s—close but no cigar. Those who were interviewed  appeared to be old enough to vote and "low-Information voters" may be an understatement with respect to this group. 

Finally, despite the focus on college education, according to a 2014 report from the Federal Reserve Board of New York, "nearly half of new Millennial graduates are working in jobs that don't require a bachelor's degree."

Millennials in the Workforce

With respect to work, 68 percent Millennial men and 63 percent of women are employed, 8 percent of men and 6 percent of women are unemployed, and 22 percent of men and 31 percent of women are not in the workforce.

Once again, this latter figure may be attributed to those who have not yet reached a working age. According to the U.S. Bureau of Labor Statistics, Millennials will, in about five years, make up roughly 50 percent of the U.S. workforce.             

What Are the "Experts" Peddling?

Returning to The Wall Street Journal article, there were a number of suggestions and examples of how to satisfy the needs of this supposedly unique group.

Some of these included: letting them work fewer hours or work from home, having flexible work schedules (like Friday afternoons off), granting leaves of absence to pursue outside interests, offering free food, and planning movie outings or team building activities such as trust-falls during the workday. 

Other "experts" suggested executives become more visible by passing out doughnuts and bagels, sort of the old "management by walking around at HP" as described in the popular book In Search of  Excellence (1982). 

Many of these recommendations from the so called "Millennial experts" at a cost of $20,000 per hour are left over from the "be kind to people approach" from the Human Relations Theory of the 1930s.

In order to motivate employees (actually to hopefully discourage them from joining unions), management advocated gimmicks including company newspapers, in-house cafeterias, company picnics, company bowling teams, turkeys for everyone at Christmas, etc. Plenty of these traditions still exist in organizations. 

Therefore we may conclude that there are not that many differences in what we find the "Millennial experts" recommending and these "be kind to people" approaches of the 1930s.

In essence, what the "experts" suggest in terms of motivating Millennials is very old wine in a new $20,000 bottle.

This is perhaps best summarized by a comment made by a "Millennial expert" in the previously cited Wall Street Journal article, that "generational consulting is a complete racket." 

Are Happy Workers Productive Workers? 

Of the 49 books Drucker wrote, not one was solely dedicated to discussing leadership and motivation. In fact, Drucker had little use for the behavioral sciences. His major argument with the various behavioral theories was that they primarily focused on employee satisfaction.

The problem he cited here was that there was no real measurement for employee satisfaction. If the mean score on the results of employee attitude surveys registered 85, are the employees more satisfied than if the score was 75? 

The WSJ article concluded with a statement, "The hope is that happier employees will generate stronger ideas." 

Drucker argued that there is no evidence from the behavioral sciences to substantiate that employee satisfaction results in any better organizational performance.

In other words, a “happy worker” is not necessarily a productive worker. So much for the "experts" attempting to make Millennials happier.

Drucker and the Splintering of the Workforce

Although Drucker called our attention to the growing number of younger employees in his book, Managing in the Next Society (2002), he did not specifically address Millennials.

In fact, Millennials were barely coming of working age at the time Drucker passed away in 2005.

In Managing in the Next Society, Drucker wrote about the "transformation and splintering of the workforce."

The workforce in developed countries is splitting into a series of seemingly opposing groups: manual and knowledge workers, younger and older employees, full-time workers and outsourced consultants.

According to Drucker, the implications for organizations are that old management practices will no longer be applicable to managing this new diverse workforce.

On the other hand, although he called attention to the "splintering," he did not describe what the new practices should be. This was typical Drucker, and something I identified as "Drucker Gaps" in my book, The Strategic Drucker: Growth Strategies and Marketing Insight From the Works of Peter Drucker (2009).

He often identified an issue, suggested what questions we should ask, and what should be done, but neglected to tell us how it should be done. 

Black Cloud for the Millennial Experts

According to Carolyn Heller Baird, "Millennials have been unfairly saddled with the dubious reputation for being self-centered, disloyal employees.

The fact is their goals and passions and needs in the workplace aren’t all that different from the Baby Boomer and Gen X generations that preceded them."

Baird went on to site a recent study by the IBM Institute for Business Value, that found the differences among Millennial, Gen X, and Baby Boomer employees have been grossly exaggerated.

The study surveyed 1,784 employees from organizations across 12 countries and 6 industries and compared the preferences and behavioral patterns of Millennials with those of the Gen X (aged 35–49) and Baby Boomers (aged 50–60).

The findings show that the three generations have very similar career aspirations, needs, and attitudes. What’s more, the attitudes and characteristics of Millennials in the workplace are often mischaracterized. 

Another observer of Millennials commented: "To maximize the potential of this hodgepodge culture, a flexible structure needs to be in place. An implacable management style directed toward any one group will alienate more employees than it will inspire.

Most importantly, the focus of the office should be on its goals, not the means in which individual workers get there." 

These views were reinforced in a Fortune magazine article stating that "Managing Millennials 1.0 goes wrong in two critical ways: overstating differences between this generation and others, and overstating similarities."

So where does this leave us? Let's return to Drucker and explore what his approach would be. 

The Drucker Approach: A Consistent Leadership Style

"Effective leadership—and again this is very old wisdom—is not based on being clever; it is based primarily on being consistent." —Peter F. Drucker

Peter Drucker most likely would deal with this issue from two dimensions. The first dimension being the need for a consistent leadership style and practice with respect to all age groups.

This avoids the need to develop a leadership style and approach for each age group including the Millennial majority and avoids the "implacable management style " previously discussed.

The second dimension deals with the fact that a vast majority of Millennials, who will soon make up the largest percentage of the workforce, are knowledge workers and it does not take "Millennial experts" to tell us how to lead them.

Drucker addressed this issue years ago—this will be covered in more detail in the next Drucker Today article.

Drucker on Leadership

Drucker, in defining leadership, added what he felt were the qualifications, characteristics, and practices of leadership. 

In his book The Practice of Management (1954), Drucker defined leadership as: “The lifting of man’s vision to higher sights. The raising of a man’s performance to a higher standard. The building of a man’s personality beyond its normal limitations.” 

Drucker’s Qualifications of Leadership

Drucker cited what he felt were the “qualifications” of leadership: Someone who is trustworthy and authentic, and sets an example

1. Trustworthy: Drucker felt that organizations are held together by mutual trust and defined this qualification as, “People can rely on you, you mean what you say, you deliver what you promise, and you can be trusted.”

Drucker suggested one can build trustworthiness in organizations by exhibiting the following behaviors:

  • Disclose information about who you are and what you believe.

  • Listen attentively and eagerly to what others have to say.

  • Seek others out from different levels of the organization for informal meetings.

  • Invite interested parties to important meetings.

  • Ask questions and seek clarity when you don’t understand something.

  • Say, “I don’t know.”

  • Admit mistakes in public with your followers.

  • Acknowledge the need for personal improvement and ask others to help.

  • Share information that is useful to others and the why of decisions.

  • Extending a helping hand—even if it is not business related.

  • Show that you are willing to change your mind when someone else comes up with a good idea.

  • Avoid talking negatively about other people.

  • Say, “We can trust them.”

  • Leaders give (rather than take) credit. 

2. Authentic: According to Drucker, the second qualification of leadership is being authentic. Once again, he cited ways to develop or maintain this accordingly:

  • Don’t try to be something you are not.

  • Don’t try to become a Xerox copy of a leader you admire—copies are never as good as the original.

  • Be yourself.

If we were to summarize these three points, Drucker is telling us to be who we are and avoid trying to act out a part—it's not exactly earth shattering.           

3. Sets an Example: Drucker’s third qualification of leadership is being someone who sets an example. This, he said, consists of the following:

  • A leader is not the same as being popular.

  • A leader is someone who is taken seriously.

  • A leader sets the right example.

Characteristics of Leadership

Drucker defined the characteristics of leadership as consisting of credibility, integrity, trust, ethics, and character. 

Credibility: Drucker provided another “one-liner” here relative to credibility: “If we don’t believe the messenger, we won’t believe the message.”      

Although Drucker did not expand on this, a study of some 60,000 employees on the most important characteristics in leaders found:

  • More than anything, followers wanted their leaders to be credible.

  • Followers want to believe that a leader's word can be trusted.

  • Followers want leaders to do what they say.

  • Followers want leaders who are personally excited and enthusiastic about the direction of the firm.

  • Followers want leaders who have knowledge and skill to lead.

Integrity and Trust: Mixing the two he cited that:

  • Integrity is the one absolute trait of leadership.

  • Trust is the conviction that the leader means what he says. It is a belief in something very old fashioned, called integrity.

  • Effective leadership is not based on being clever; it is based primarily on being consistent.

  • Without integrity, leadership disintegrates into a farce.

Drucker then went on to expand on integrity by stating, “The men with whom a man works, and especially his subordinates, know in a few weeks whether he had integrity or not.

They may forgive a man a great deal for incompetence, ignorance, insecurity, or bad manners, but they will not forgive his lack of integrity.” 

Ethics:  Another characteristic of leadership that Drucker identified was ethics. Here he pointed out the following:

  • People will follow most enthusiastically when they are convinced of the ethical correctness of what they are doing.

  • Ethical standards are necessary if a leader is to convey a sense of meaningful mission instead of appearing to spout deenergizing rhetoric of good intentions—the focus should be on converting good intentions into results.

Character: The last characteristic of leadership Drucker described is that of character. He said, “It is character that sets the example and is imitated.

Character is not something a man can acquire; if he does not bring it to the job, he will never have it. It is not something one can fool people about.”

Drucker went on to identify Leadership Practices as follows:

  • Think “we,” not “I.”

  • Have a willingness, ability, and self-discipline to listen.

  • Be willing to communicate—to make yourself understood.

  • Don’t “alibi” yourself.

  • Have a willingness to realize how unimportant you are compared to the task. The task matters—you are the servant.

  • Leaders need objectivity, a certain detachment—they subordinate themselves to the task, but don’t identify themselves with the task.

  • High standards. What attracts people to organizations are high standards because high standards create self-respect and pride.

Summary on Leadership and Millennials      

This article presented Drucker's views on the need for having a consistent leadership style, regardless of the ages of your workforce. As such, "Millennial experts" are merely a fad.

We will close with another Drucker quote on the topic: “One does not manage people—the task is to lead people. And the goal is to make productive the specific strengths and knowledge of each individual.”

Your Leadership Score Card

The table below summarizes Drucker's Elements of Leadership and a manager's corresponding behaviors.

How do you rate yourself on the score card? Do you have a consistent leadership style for all of your employees, regardless of their age groups? (Check off the behaviors you exhibit and note where you are deficient/need to improve.)

Leadership Scorecard

Dr. Robert W. Swaim was a colleague and personal friend of Peter Drucker for nearly 30 years and worked with him for 5 years prior to his death to develop both the Drucker EMBA and Executive Development Programs in China. He spent 10 years living in Beijing and teaching these programs. He is the author of the Strategic Drucker-Growth Strategies and Marketing Insights from the Works of Peter Drucker, John Wiley & Sons (2009). 

Robert W. Swaim
Contributor: Robert Swaim, Ph.D.
Posted: 12/21/2016