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Barrack Inc. and Workforce Demographics

February 19, 2009

Barack Inc, Workforce Demographics and the Inevitability of Change

How’s that for a title?  So I’ve recently read two books that I felt worthy of some mention and some discussion.  The first is Don Tapscott’s latest, Grown Up Digital, a “where are they now?” update of Growing Up Digital which he wrote back in 1997.  The second is Barack Inc, Winning Business Lessons of the Obama Campaign..  One of the common themes between these otherwise very different books is “change.”  Grown Up Digital is a dispassionate and, I believe, highly accurate portrayal of the changes Millenials have brought to standard operating procedures and the heretofore unchallenged assumptions of corporate America.  Barack Inc is about the way Obama changed the typical Presidential campaign through social technologies, a consistent and calming demeanor even in the face of political crisis, and consistent and unwavering commitment to a message of change.

These books talk a lot about change.  And they both really got me thinking  about the degree of change that business leaders must absorb in 2009.  Let’s consider just a small sample of the issues and challenges that business executives are facing:

  • The worst recession in over 25 years.
  • The first time in US history that we have four generations working alongside one another: Traditionalists, Boomers, GenX, and Millennials.
  • An impending exodus of talent (30% of the workforce over five years) far exceeding anything corporate America has previously faced.
  • The first time in US history when over 50% of the workforce has a strong affinity for or innate understanding of technology, networking, and social software.
  • The emergence of cloud computing and software as a service.
  • The emergence of India and China as both key providers and legitimate challengers for US technical expertise and talent.
  • A power shift from company to consumer on nearly every front: brand, message, support, innovation, communication, terms of engagement, etc…
  • The emergence of user-generated content and its subsequent disruption of major industries – news media, encyclopedia, entertainment, marketing and ad agencies…
  • The ubiquity of gaming technology, from the Wii as a rehabilitation device in nursing homes to online virtual games whose revenues now far exceed those of Hollywood.
  • Pervasive broadband and mobile technologies that have transformed communication paradigms, web access models, and the whole concept of connectedness.
  • The maturation of a true knowledge economy where the doubling of information is now measured in months, rather than years.

Nearly every one of these disruptive forces has emerged in the last five years.  As Libert and Faulk point out in Barack Inc: “…winning companies don’t just embrace change—they lead the way. They are the change.”  This line from the book actually reminds me of my own response several years ago when previous management had asked employees to read the classic change management book Who Moved My Cheese.  They asked everyone how they felt when someone “moved their cheese.”  And I said, “I wouldn’t know — I’m always the one moving it.”  It brought a big laugh as you might imagine, but it was also largely true (and still is today to some extent).  In today’s climate of pervasive change, it’s even more important to aggressively embrace those changes over which we have no control.  When companies do this well, they can crush the competition by controlling the way their organization responds to inevitable change.  In other words, rather than let change happen to them, they can own the change and use it as a catalyst toward their own objectives.  Who is doing this?  The winners:

  • Best Buy vs Circuit City – one is an industry leader with a fiercely loyal employee base (which is all the more impressive since it’s a retail store), and one is going out of business.  Best Buy’s Blue Shirt Nation is an exemplar of how corporations can embrace change given the right leadership and a willingness to sometimes lead from the outside-in or from the bottom-up.  Brad Anderson’s recent interview on this subject should be required viewing for all MBA students.
  • Intel vs everyone else – again the winner here is a company that embraces change – Intel implemented Media Wiki technology over three years ago and hasn’t looked back.  They enable anyone to post and edit content, and have now captured in excess of 20,000 articles in their Intelpedia site.  Exodus of talent?  Maybe.  Exodus of knowledge and expertise?  Not so much.
  • Cisco vs everyone else – from the depths of the tech bubble bust to market domination.  How?  Embracing change and tapping the expertise within the org.  Just as Obama managed an unprecedented  grassroots campaign effort,  Cisco has fostered grassroots business practices that are still unmatched by even the most innovative companies in this list.  FastCompany recently profiled John Chambers efforts in this regard in a very thought-provoking article.
  • Procter and Gamble vs everyone else – P&G has a product launch success rate of over 90%; the others average 30%.  P&G derives 50% of its new product ideas from customers and the public; the others still drive from within.  How much longer can P&G’s competitors survive product launch rates that are only 30% as effective as their biggest competitor who, by the way, also has lower overall R&D costs?
  • McCain vs Obama – which one embraced change?  Even if we accept John McCain’s claims to be “all mavericky” (to quote Tina Fey), he was a maverick within the known political framework.  Obama broke from that orthodoxy in a number of ways – from his look to his style to his campaign model to his ideas.  Even the framework and lens through which he views the world seems to be fundamentally different than even the old guard within his own party, including his new Secretary of State.

The workforce is changing in profound and fundamental ways:  within just a few years, GenX and Millennials will be a workforce majority.  This is an inevitable change. The question is not whether it will happen.  The question is “what are you going to do about it?”  Here is a story about what not to do:  a few days ago, I talked to a social media evangelist in a well-known company who seemed like the perfect employee: smart, hard-working, loyal, innovative… He is also actively looking for a new job, even in this down economy.  Why?  His company bans access to Facebook, LinkedIn, Twitter, MySpace etc… and has almost zero collaboration or innovation initiatives.  It’s a complete “command and control” model with locked down machines.  And as a result, they are going to lose this awesomely talented future leader.

The IT and execs at this company are undoubtedly the same sort of people who banned email when that first emerged and before that, the telephone, and before that, the telegraph.  After all, there is nothing quite like the Pony Express right?  Clearly, the “ban Facebook” strategy (if it can be rightfully be called that) is little more than a “bury your head in the sand” reaction to change.  I’ll be surprised if these approaches last even another 12 months, let alone 18-24.  Workforce demographic change will overwhelm corporate intransience.

Instead of this “do nothing” strategy, corporate leaders should be looking to books like Tapscott’s and Libert and Faulk’s to better understand what’s happening and why it’s happening.  Tapscott thinks that Millenials are driven by eight norms:  1) freedom, 2) customization, 3) scrutiny, 4) integrity, 5) collaboration, 6) entertainment, 7) speed, and 8) innovation.  He goes on at length to explain each driver, why it’s important, and examples of how it manifests in behaviors and expectations.  It’s a great place to start in defining a new way forward.  Libert and Fault lay out some useful principles as well in detailing Obama’s win, particularly around embracing change and his social models.  Again, this is a worthy read for corporate leaders who don’t know what to make of these dramatic and unrelenting paradigm shifts.

Just over a year ago, I wrote a White Paper on workplace communities and the resulting business transformations that would result.  My concluding sentence read: “Companies that fail to embrace Web 2.0 and community solutions will be the water wheels of the next century, quaint relics of a time when ideas and expertise came from the anointed few rather than the collective many.”  I stand by what I wrote back then, and I think we are beginning to see this prediction play itself out.  I expect that in 2009, we will really begin to see which companies are best able to adapt and embrace change.  Those companies who have been resisting change are not well positioned to survive the current economic conditions.  Those that have already started to change will be in the best shape and will ultimately be the big winners.  And for those who have been on the fence, I would strongly suggest you read Barack Inc and Grown Up Digital tomorrow so you can start planning how you will embrace the changes they identify.  Each day that passes is another lost opportunity to move your company forward.

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