CIO

Generation Flex

A revolution has taken place in the workplace over the last decade and it has profoundly affected employees. Beverley Head asks Bruce Tulgan what it means for CIOs.

For a decade social researcher and analyst Bruce Tulgan poked around inside American corporations. He wanted to understand how globalization and technology was affecting the employer-employee relationship.

As he was conducting the survey, which ran until 2003, there was also the beginning of a generational baton change. In 1993 when he began the project, baby boomers dominated the workplace; the youngest were 32, the oldest 47. The oldest generation X employees were 28, and generation Y was still in school. Now baby boomers range in age from 43 to 58, while generations X and Y combined make up about 44 percent of the work force.

What Tulgan, the founder of Connecticut-based Rainmaker Thinking, uncovered was a radical change in the employer-employee relationship - in part the result of this generational jolt, but also wrought from the forces of competition, globalization and technology. Although the research was conducted in the US, it holds real lessons for Australian CIOs, who will have to manage the changing expectations and demands of employees while also meeting the ever-increasing demands of their superiors.

"Over the last 10 years, globalization and technology have created a business environment of high-risk, erratic markets and unpredictable resource needs," the Rainmaker report states. "To remain viable employers have been forced to adopt extremely flexible and efficient staffing practices. In turn employees have adjusted by adopting more aggressive attitudes, expectations and behaviours."

When it first identified these changes in 1993, Rainmaker believed it was only generation X employees that had this newly assertive attitude. "Many analysts expected these trends to abate following the dotcom crash and the US economic downturn that has persisted since early 2001. Instead these trends have both intensified and spread among workers of all ages," notes the report. According to Tulgan, CIOs are going to have to swiftly come to grips with the implications of this shift in attitude if they are going to successfully manage both their employees and the expectations of employees in the broader enterprise they serve.

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Just Rewards

One of the first areas that CIOs will need to overhaul is the way in which they reward their workers. Tulgan's research shows that rising up the hierarchy of an organization, six-monthly reviews or annual raises are not the rewards being sought by today's employees. "Traditional rewards are merely the threshold test - the cost of playing the game," he says. "People in today's workforce want to know what you have to offer them today, tomorrow, next week and next month in return for their added value."

Tulgan has identified eight factors that new generation employees seek from their employers.

  • Performance-based compensation. The amount of financial compensation must be in line with the amounts available in the marketplace. But much more important than the amount, those in greatest demand today want to know that their compensation is not limited by any factor other than their own performance. People want to be assured that if they work harder and better they will be rewarded in direct proportion to the value they add. This may require bonus funds be established that can be allocated to individual employees on merit.
  • Flexible schedules. As long as they are meeting goals and deadlines, people want to know that they will have some control over their own schedules. The more control the better.
  • Flexible location. Again, as long as they are meeting goals and deadlines, people want to know that they will have some control over where they work, to the extent that working in a particular space in a particular building is required, they want to know that they will have some power to define their own space to their liking. This can again be tied to a rewards system, so that better performance results in an employee securing improved tools or workspace.
  • Marketable skills. People are looking for formal and informal training opportunities and want to be assured that they will be building skills and knowledge faster than they become obsolete.
  • Access to decision makers. Those among today's workforce do not want to wait until they climb the ladder to build relationships with important leaders, managers, clients, customers, vendors or co-workers. They want access right away.
  • Personal credit for results achieved. Nobody any more wants to work hard to make somebody else look good. People want to put their own names on the tangible results they produce.
  • A clear area of responsibility. People want to know that they will have 100 percent control of something, anything, so they can use that area of responsibility as their personal proving ground.
  • The chance for creative expression.

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Getting Personal

This need to understand what each employee or direct report wants will place a significant burden on CIOs who will have to carve up projects and set goals based on personal rather than team objectives. But rather than offering any sympathy, Tulgan says it is just the price of being a leader in today's business environment.

"Leaders at all levels must learn to connect with their direct reports," he says. "Figure out one person at a time, one day at a time, how to tune in to each person, become more knowledgeable about each person's tasks and responsibilities, projects, strengths, weaknesses, resource needs, skills gaps and so on. Spend more time talking with direct reports one person at a time, one day at a time about the work.

"My view is that there is way too much talk in the workplace about everything under the sun, and not enough talk about the work."

Micro-management then seems to be the way of the future for CIOs wanting to keep their workforce productive, happy and loyal. But there is a difference between micro-management and command and control, which in Tulgan's view does not work.

"I believe that managers in every workplace today are engaged in a tug of war," He says. "On one side, employers are demanding more work and better work out of people - often out of fewer people with fewer resources. On the other, employees are feeling pressured, overworked and in need of some relief in the form of flexible working conditions or at least some incentives for their hard work.

"Stuck in the middle trying to negotiate these competing needs is every single person with supervisory authority . . . The most successful approach to supervisory management nowadays is to be transactional rather than hierarchical. That means there is a quid pro quo for everything - if employees want rewards they simply must perform. The more employees perform the more rewards they receive and high performance is the only option.

"Equally important is the emphasis on being hands-on rather than hands-off. If managers are going to be transactional they must be extremely knowledgeable about the work their direct reports are doing, they must spend a lot of time with direct reports spelling out expectations, clarifying standards and defining goals and deadlines. And they must have the guts to hold employees accountable."

Managing at such a granular level is challenging, but Tulgan claims its rewards include higher productivity, higher quality, improved morale and better retention of high performers.

For CIOs the challenge to be across every project IT staff are working on will be diffused somewhat by employing project managers who can each supervise their own team, with the CIO then only needing direct interaction with those project managers. However, Tulgan says that ideally managers should have a daily 10-minute coaching session with all their direct reports - and the minimum expectation ought to be a brief coaching session with direct reports every week.

As part of that communication, managers need to set out their expectations in concrete. "You must clarify daily or weekly goals and deadlines. You must articulate guidelines and parameters," says Tulgan. "Your mantra in your daily or weekly meetings should be: 'Here's what I need you to do, by this day and time, and here are the guidelines. Do you understand?'"

He adds that it is important to track in writing these coaching sessions so that an employee's successes and failures are recorded so that they can in turn be rewarded or remedied. Such documentation may be required by the human resources department to underpin any decisions taken about an individual employee.

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Negotiation Time

Managing staff will increasingly rely on day-by-day negotiation. Some things of course are not negotiable and CIOs need to quickly define the basic performance standards demanded from employees in return for them keeping their jobs. Tulgan, however, warns that the fewer negotiable items a CIO has in the armoury the fewer bargaining chips he or she has to drive performance.

For CIOs who prefer a command and control approach, this new requirement for constant negotiating might seem daunting - a little like having a home full of teenage offspring to navigate. But Tulgan sees no alternative. "You must be prepared to negotiate with your direct reports on a regular basis," he says. "That means you have to get really good at negotiating - take control of the dynamic and use the ongoing negotiation to drive performance.

"Let's say you want an employee to be ambitious about achieving a particular set of goals by a particular deadline. How do you know what's fair? What's reasonable? You find out by negotiating and let market forces decide. See what the negotiation yields.

"You might say: 'I need you to do A, B, C, D and E by Thursday at 2pm. Do you understand? Can you do that?'

"Your direct report might say that will take until Friday afternoon. And you might say: 'I think you can do it by Thursday at 2pm'; and your direct report might say: 'Maybe by Friday morning.' And you might say: 'How about the end of the day on Thursday'; and your direct report might say: 'Okay.' And there you have a done deal. You'll just have to be hands-on enough to hold that person accountable and enforce the deal."

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When the Chips Are Down

One of the benefits of micro-management as that espoused by Tulgan is that it allows CIOs to get very close to their direct reports. In turn that allows them to uncover the unique needs and wants of that individual. Tulgan recommends making use of those distinctive wants as an extra negotiating chip in order to draw out further performance benefits.

"Every person has unique needs and wants," he says. "One person wants Thursdays off, another Wednesday. One person wants to bring her dog to work, another wants to bring his house plants. One person wants to work with Sam, but never with Chris; another wants to work with Chris but never with Sam."

Armed with this knowledge the CIO can create a custom deal with an individual - granting the employee what they want in return for something that the company wants, and achieved at very little, if any, cost to the employer.

"That's why I always tell managers when your employees make unreasonable demands, don't be insulted - be grateful," he says. "They are just telling you exactly what they want." And handing you the most powerful bargaining chip a CIO could hope for.

However, CIOs need to remember that the deal cut today will not be the deal required tomorrow and employees also need to be aware of that. In addition, any arrangement can only last as long as the employee meets their end of the bargain in terms of quality and quantity of work.

At the end of the day, CIOs are still employees and themselves a direct report, whether it be to the CEO, CFO or other C-level executive. What does this workplace revolution spell for them?

"Employment relationships have changed dramatically and will continue to change," says Tulgan. "The norm will be less long-term hierarchical and increasingly short-term and transactional. That doesn't mean, however, that there won't be long-term employment relationships. They'll just be renegotiated on an ongoing basis. And it should be noted that CIO-types will have a lot of negotiating power with employers."

He believes that most baby boomer CIOs feel that the rules of the game have changed in the midst of their careers. "They feel they followed the old-fashioned career path only to have it fall apart in the middle of their careers. But they've always been ahead of their time. During the boom they were just old-fashioned enough but just sophisticated enough to realize that there were no such things as magic business models. Anyway, they've always thought they would reinvent success for the world and in the process reinvent themselves and their careers over and over again.

"Among the CIO community, folks are sophisticated and tend to be less old-fashioned so they are well positioned and probably not terribly shocked by all the changes."

As for the emerging generation X and generation Y CIOs, there is less of a focus on long-term tenure in any case. "Gen Xers and gen Yers in particular would consider it highly risky to hitch your wagon to the star of an established organization, pay your dues and climb the ladder the old-fashioned way because that's putting all one's eggs in one basket, not diversifying risk. If one is truly risk averse in a highly uncertain world one must keep one's options open," says Tulgan.

"Uncertainty is the new reality. With uncertainty comes a short-term focus of necessity. We can still achieve great things - we'll just have to do it one day at a time. I think that savvy people of all ages are realizing this."

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SIDEBAR: Acting Their Age

What every CIO needs to know about the three generations that currently make up the workforce

by B Tulgan

  • Baby Boomers - born 1946-1961*
  • Baby boomers represent roughly 46 percent of the workforce.
  • Boomers generally believe they have paid their dues and climbed the ladder under the old rules and now find themselves operating amidst constant downsizing, restructuring and re-engineering.
  • Boomers still pride themselves on their ability to survive "sink or swim" management and often they resent the demands of today's young upstarts.
  • Boomer women led the charge for workplace flexibility and now many boomers have caught on to the free agent mind-set.
  • Boomers respond best to leaders and managers who listen attentively to their input and include them in decision making, while challenging them to keep growing.

  • Generation X - born 1965-1977*
  • Gen Xers represent roughly 29 percent of the workforce.
  • When gen Xers hit the workforce in the late 1980s they were typecast as disloyal job-hoppers who did not want to pay their dues and wanted everything their own way. But by the mid to late 1990s it was clear that Xers formed the vanguard of the free agent workforce. Now
  • Xers are growing up and moving into positions of supervisory responsibility and leadership, but they are not settling down.
  • Xers remain cautious and they know their security rests in staying on the cutting edge.
  • Always in a hurry, Xers will often sidestep rules as they push for results. They are willing to take risks to keep learning and innovating.
  • Gen Xers respond best to leaders and managers who spend time coaching, clarifying the day-to-day bargain at work, and give credit for results achieved.

  • Generation Y - born 1978-1985
  • Gen Yers represent roughly 15 percent of the workforce.
  • Gen Yers are children of baby boomers and the optimistic, upbeat younger siblings of gen Xers.
  • Like Xers they have a transactional approach to dealing with employers. But unlike Xers they have high expectations for established institutions - gen Yers have been told by parents, teachers, counsellors and churches that they can do anything. And they believe it - they're overflowing with self-esteem.
  • Gen Yers' facility with information technology makes them would-be experts on everything and they are mastering a new just-in-time strategic approach to thinking, learning and communicating.
  • Poised to be the most capable and the most demanding generation in history, gen Yers respond best to leaders and managers who keep them engaged with speed, customization and interactivity.

* Generation spans according to Bruce Tulgan