The transition generation-or better known as the Millennials- is transitioning humanity to a new era, one that will be completely fueled by technology and massively different from what we got used to in the twentieth century. This magnitude of change will be similar to the one after the first Industrial Revolution.
In this two-part post, we’ll look at why Millenials is the transition generation and how it affects their lives in both positive and negative ways. In Part I, we’ll see why staying relevant is going to be a great challenge for businesses and explore how they can turn this transition into an opportunity.
Millennials are a subject of great curiosity. For previous generations, they often seem to come from Mars, kids who represent the future of humanity but with an attitude and lifestyle radically different from anything before. Researchers have tried to link them to previous generations and portray them as an evolution of the human race, something like “post homosapiens.”
They’ve been called disruptors, destroyers of norms, rebels who’ve gone beyond the traditional differences between old and new. They were expected to radically change the world we got to know in the twentieth century. And today, businesses are desperately trying to understand them, too. They spend billions on research and transformation strategies to win them over. Millennials have been hyped so much during the past decade that for a while, even they themselves believed they came from Mars.
But then quietly, they became the largest and most powerful generation of our time. They entered what the banks call “the most important age range for economic activity.” Their high disposable income comes with the inconvenient complexity of becoming an adult and this has proved to be harder than expected. Millennials woke up one day, no longer the prodigies everyone had high hopes for. They were no longer the future, no longer the talented kids who were to be the next big thing. Their time had arrived. Millennials are the NOW generation, the generation Y, but they seem to be falling short of everyone’s expectations, including their own.
Young generation incorrectly perceived as lazy and entitled adults who prefer carpe diem to adulthood?
Generation Y is often considered lazy and entitled and don’t work as hard as previous generations. This, of course, is a convenient explanation for those who worked through a lifetime of juggling a corporate or entrepreneurial career with managing a family in the traditional sense. For them, understandably, Millennials seem like a bunch of spoiled kids who are struggling to achieve the basics that previous generations were able to achieve at a much younger age.
But the truth is that Millennials face a more complicated and difficult situation. They have to juggle a complex world, which has become extremely competitive and demanding, with the expectation of finding a “greater meaning” in their lives. And they have to do this in the same 24-hour day, with the rules having changed dramatically.
Competition has become much greater. More countries in the world are part of the global economy and thus the potential job market. A lot more people have access to quality education while at the same time automation is making more and more roles and skills redundant. Among 25‒39-year-olds in the UK, 39% are graduates, compared with 23% of those aged between 55 and 64. This gap is even bigger in emerging regions like Southeast Asia.
Fundamentally this is a good thing, but it also creates weird inequalities; for example, the inequality between those who have to carry a large amount of student debt and those who don’t. There is also inequality between younger and older Millennials. People who entered the workforce during the mid-2000s had to suffer the devastating consequences of the financial crisis of 2008. They were first to be laid off and in many cases now have to deal with a large hole in their resumé.
Many factors are contributing to the delay and eventual complete erasure of some traditional milestones of adulthood. While in 1975, 45% of 18‒34-year-old Americans had reached the four major milestones of leaving home, getting a job, getting married, and having children, in 2015, only 24% of the same age group have checked all four boxes. Perhaps this trend shows that this form of “life” is less attractive to the Millennial generation. After all, it is easy to explain it by their missing sense of responsibility or their perceived laziness. The truth is though that, now, even saving for a downpayment to buy an apartment can take forever. Achieving all four milestones and reaching traditional adulthood has become much harder than before.
Living costs, student debt, and the extremely competitive job market are all key challenges of Millennial adulthood. And they still have to deal with the same social pressures and expectations that were designed for a world with different rules.
The truth is that Millennials are the opposite of lazy and irresponsible. They are workaholics trying to accommodate and adapt to the changed rules and environment that are twenty-first-century living.
Let’s take the example of work. Technology has truly disrupted how we work during the past decade or so. The breakdown of traditional 9‒5 boundaries and the limitations of physical space was celebrated as one of the greatest achievements in the history of work. But with the blessing of flexibility and freedom, something else came, too: constant availability. In the not-too-distant past, work-life balance was one of the most commonly repeated terms in the corporate world. Unfortunately, before it really could become a thing, Millennials went a step further and blended work into their lives. Be it positive or negative, that’s something for each of us to decide for ourselves, but one thing is for sure, it has created more complexity in our everyday lives.
We can work anywhere, anytime. As a result, we have added work to the time and routines originally reserved for non-work activities. Replying to work emails has become equivalent to messaging friends while watching a movie or walking the treadmill in the gym. What used to be a demarcated activity narrowed in time and space is now part of every hour of every day.
But work is just one of the never-ending stimuli that Millennials face in their personal lives. Technology has created an almost infinite stream of choices, choices they are not yet used to leveraging. Even a small decision can be complex, creating a constant feeling of fear of missing out (FOMO), haunting Millennials in pretty much every part of their lives.
Did I get the right credit card? Did I buy the best-value flight? Am I with the right partner? It’s easy to get lost in these questions and more.
It’s well documented that social media makes people unhappy. It can have a serious negative effect on other parts of their lives. But we rarely talk about how the incredible number of decisions Millennials face on a daily basis can create a lot of self-doubt and anxiety. It’s a seriously complex challenge that they’ve not been prepared to deal with. It requires a high level of multitasking and could cause a feeling of “paralysis” when it comes to tasks they don’t want to do or those that require more effort. This paralysis can easily push Millennials into a spiral of procrastination. Running errands, paying bills, investing money, and, sadly, having children, are all victims. The never-ending stimuli and the dread of making a bad choice are effects of unbalanced technological advancement.
Considering all this, businesses winning over Millennials will rely much less on the product itself. They will depend far more on the experience they have when dealing with the company. Providing a great product is a must. However, the businesses that really champion Millennials will be the ones that simplify their increasingly complex life.
When it comes to things that are not in the center of Millennials’ lives, many questions begin with why. Why do I need to fill out forms? Why do I need to go there in person? Or why can’t I just do it online? In most cases, these types of questions can be solved by technology. The problem is that companies are still too focused on their product and their bottom line. They aren’t focusing enough on the actual customer experience. Yes, it’s common to use customer experience as the center of a marketing strategy. However, the reality is that it’s still very low on the board meeting agenda and in C-level decisions.
As a far-fetched example, car manufacturers are still thinking about building cars. This is an old habit that will be hard to change, even though it is becoming more and more obvious that this business model will soon die. Millennials are less and less willing to deal with the hassle of owning a car. It’s a large depreciating asset, exactly the opposite of what they want to spend their money on.
Automation and the changing transportation landscape of cities will make cars redundant in the traditional sense. This could drive many car brands out of business if they continue to manufacture consumer passenger cars and try to sell them to end customers. To get from A to B, most Millennials won’t care if the self-driving car picking them up is a Toyota or a Fiat. There won’t be a brand value attached. The most important features will be efficiency and predictability and those won’t be controlled by the car manufacturers.
The companies who will stay in business will be those who build customer experiences that Millennials expect from a “utility company.” And the main virtue of a utility company is invisibility. Pedals and a steering wheel will be reserved for affluent brands and will become toys for rich people and enthusiasts; for Millennials, the more mundane act of getting from A to B will have to be easy, quick, and hassle-free.
This won’t happen overnight. The real effect on these companies will be felt in a decade or so. But the winning strategy for all businesses will be to understand (and find) the utility element in their operations. That is where organizations can excel and build a seamless and invisible experience. Customer support, purchase cycles, and processes, deliveries, returns, information, sign up ‒ these will be the new concerns. There are many elements that companies can change now about how they deliver their customer experience. They simply need to focus on that part of their operation that is not interesting enough for Millennials to spend time on. The magic will be to interact less and get more done.
As of now, Millennials haven’t brought the apocalyptic disruption of traditional businesses. Still, that doesn’t mean it’s not going to happen. By 2020, their collective spending power will reach $15 trillion per annum and their number (over 2 billion worldwide) will be the most important economic force determining which businesses remain relevant in the long term. Millennials will expect the same speed of adoption from these organizations that they have to deal with when adapting to their changing environment. They’ll expect seamless experiences. Experiences, where administrative, mundane tasks will be handled invisibly in the back end, like having a real personal assistant.
Machine learning is already changing how these experiences are delivered. However, the pace of real “digital transformation” of large enterprises is falling short. Even if it is not yet visible on the bottom line and stock prices, it’s a given that in a few years Millennials will dictate the pace of how fast businesses have to accommodate them. Then, it might be too late to change.
There is no lack of willingness to change. What blocks real innovation are the legacy systems that are hard to change.
In a previous post, I explained the importance of having the right discipline to be able to build machine learning and why machine learning, and ultimately artificial intelligence, is actually a data game. For most large companies, this is the biggest bottleneck. Their data infrastructure inevitably has to be updated and the later it happens, the more painful it will become.
In Part II, we’ll look at how, in the early 2010s, Google had to change the course of its most important product, Search, because it was becoming less and less relevant to Millennials. We’ll see how this gave birth to some of the tools that provide the data infrastructure for today’s experiences and shows how all large organizations can use it.
