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  • How Generational Shifts will Impact Business and Innovation (Part 1)

    In the coming decade, major generational shifts will take place in the workplace. Today and in two weeks, let’s understand more about the concept of social generations, how the socialization of different generational cohorts impacts the way they think, work, decide, communicate, manage and lead, and how generational shifts will affect the ways we do business and innovate.

    Background: Training a group of global nomads

    In April 2017, I had the pleasure of training a fascinating group of highly successful businesspeople in our creative leadership method Genius Journey. Led by an impressive young Briton, the training group entirely consisted of an accumulation of global nomads, who flew in from all-around-the world to Phuket, Thailand, for a joint gig and team holiday. Together, the group operates an online platform for business coaches to host an annual international online coaching conference and to disseminate quality contents for a global coaching community.

    All Millennials in their late 20s or early 30s, the fourteen delegates came from eight diverse nationalities (UK, US, Australia, New Zealand, Austria, Croatia, Romania and India); with one exception, none of them actually lived in their home country. Moreover, while the group has a hub connecting all spokes, both are “moving targets”: the hub (= “head office” where the core team has pitched tents for the time being) only recently shifted from Costa Rica to Croatia, and most of the “spokes” (= individual team members) are frequently traveling between countries. Nevertheless, all collaborate together seamlessly and successfully across different time zones using the Internet and modern communication solutions.

    Why do I tell you this story? Training this group of international global nomads —and witnessing them working in the evening after our training with other colleagues who couldn’t make the offsite — made me realize the huge differences in work styles, work-life aspirations and educational backgrounds of Millennials (also known as Generation Y) compared to those generations who still tend to run or influence most businesses today.

    For the first time, I fully understood the importance of appreciating the style differences between social generations, and I began investigating and pondering how the impending generational shifts in the workplace will affect business and innovation.

    Introducing the concepts of social generations

    In social science, the concept of social generations describes cohorts of people born within a specific time period (ranging between 15 to 30 years) who jointly experience significant historical landmark events and witness the emergence of certain iconic technologies and trendy cultural phenomena during their formative years and while coming of age.

    Because the shared social marker experiences within a single generation differ from those of previous or later cohorts, generations tend to vary from each other in their values, aspirations and motivations, the ways they work, communicate, make decisions, interact with certain technologies, etc. As a result, when one generation starts to retire, other generations take over, and a new generation enters the work place, these generational shifts tend to have major impacts on the economies and businesses.

    Introducing the present generations and their sociological background

    Let’s gain an overview of what generations are presently still alive, and gain an impression of the landmark events, technologies and cultural phenomena that shaped them (here note that the time spans between different generations is indicative only and varies in the literature, and the terminology follows the most common one developed in the USA):

    • The Lost Generation (1883-1900) describes the cohort who grew up in the culturally and scientifically rich period of the late imperialistic era and fought in World War I, a traumatic experience that led to their name coined by Gertrude Stein and popularized by Earnest Hemingway. At the point of writing, there is a sole survivor of this generation.
    • The G.I. Generation (1901-1924) includes those who lived through WWI in their younger years. Because they had to master the Great Depression and fought in World War II, they are also called the “Greatest Generation” in the USA.
    • The Traditionalists (1925-1945) includes most of those who were born or growing up during the Great Depression and World War II, and who fought the Korean War and in some cases during the Vietnam War. Also called the Silent Generation (or “Silents” because they were socialized at a time of conformity to authority), they grew up with Jazz and Swing (Glen Miller, Frank Sinatra), flocked to “Gone with the Wind” in the cinema, and saw the advent of TV.
    • The Baby Boomers (1946-1964) got their name from the baby-boom following World War II. They are a large demographic cohort and due to the long time-span, they are sometimes distinguished in early boomers (1946-1955) and late boomers (1956-1964). They grew up during the early Cold War era with the Cuban Missile Crisis and the Vietnam War, and witnessed the moon landing and the civil and women’s rights movements that challenged the established order. Rock ‘n’ Roll (Elvis, Beatles, Rolling Stones, Woodstock) and the Boomtown Disco period, the movies “Easy Rider” and “The Graduate”, and the arrival of Color TV were important cultural phenomena shaping the boomers.
    • I am a member of Generation X (Gen X, 1965-1980), the “baby bust” generation characterized by a drop in birth rates following the invention of the birth control pill. We experienced a series of negative landmark events and social markers, such as the AIDS crisis, a renewed nuclear arms race in the late Cold War era, the Challenger explosion and the Chernobyl nuclear disaster, but also the sensational fall of the Berlin Wall and lifting of the iron curtain in Eastern Europe. Sometimes called the “MTV generation”, we enjoyed watching pop videos (Madonna, Michael Jackson) and listening to new wave and house music. Movies such as E.T., Star Wars or Alien made an impact on us, too, and the Walkman, VCR and in particular Personal Computers (IBM PC, Macintosh) were iconic technologies for us.
    • The Millennials (Generation Y, 1981-1994) grew up during the Dot-com boom, enjoyed the turn of the Millennium and suffered from the 9/11 terror attacks. Being mostly the offspring of the demographically large baby-boomers. they are also a huge cohort that has just surpassed the number of the Baby Boomers in the US. Millennials witnessed in their youth a series of major technological shifts such as the advent of the Internet, mobile phones, email, SMS, and the DVD. Cultural phenomena that shaped Millennials were hip hop (Eminem, Puff Daddy) and singers like Britney Spears or Jennifer Lopez, the movie “Titanic”, the emergence of Reality TV and Pay TV, and fancy gaming playing consoles (Playstation, XBox).
    • The Post-Millennials (1995-2010) witnessed the wars in Afghanistan and Iraq, the Asian tsunami and the global financial crisis as landmark events. Also known as Generation Z or Gen 2020, they grew up with the iPad (and other tablets), social media (Facebook, Google, Twitter, Snapchat) and mobile apps. Culturally, Post-Millennials often have a thing with musical interpreters such as Justin Bieber, Rihanna, or Taylor Swift, and got greatly influenced by the movie “Avatar” and other 3D movies.

    Interim Conclusion: Generational shifts and developments —hopefully— never stop. Some sociologists suggest the next generation has already emerged: Generation Alpha (people born from 2011 onwards — and my newborn daughter Zoë is a recent addition to Gen α). After introducing the different generations in today’s article, come back in two weeks time to learn more about the generational differences in the workplace (work aspirations, behaviors and styles), and how the generational shifts in the labour market in the next decade are likely to change business in general and innovation in special.

    This article is one of 64 sections of an upcoming book that I am presently writing, The Beginner’s Guide to Innovation (targeted for publication in 2Q.2018 by Motivational Press). 

    © Dr. Detlef Reis 2017.


  • How Cyclicality Drives Business and Innovation

    What do the state of the economy, a product, a corporate venture, a leading technology, the four seasons, and living things such as human beings have in common? All evolve and revolve in cycles, in “waves of change”. And as innovation means meaningful change, it often kick-starts a new cycle. Today, let’s understand how cyclicality influences the flow of business and innovation.

    What is cyclicality?

    Cyclicality can be defined as the property or characteristic of being cyclical or revolving in cycles. Cycles are series of events that are regularly repeated in the same order. Many business and economic developments unfold in a cycle comprising several distinct stages over a certain period of time. Just like a wave flows up and down, a particular economic development moves upwards until it reaches a peak, then falls and ebbs out in a trough.

    When tracking a particular cyclical flow in business, we can distinguish between three factors — the type of cycle, its stages and its duration:

    • The cycle type captures what kind of business parameters a cycle describes and how it is measured. Think of a product or company life cycle, a business or economic cycle, and long cycles that capture pace-setting technologies.
    • A cycle typically unfolds in distinct stages. Many business cycles unfold in four stages that some economists likened these to the four seasons: spring (growth), summer (peak), autumn (decline), and winter (trough).
    • Finally, the cycle duration captures how long it takes to complete a full cycle. Some cycles in business are short-lived and complete after a couple of quarters, many take years, and some are long-term and unfold over decades.

    What are types of cycles in business?

    Let’s look at the four most important cycles in business that leaders and innovators should be aware of:

    • The product life cycle captures how a product evolves in the market by tracking its sales and profits over time. Typical stages that the product lifecycle concept distinguishes are development and introduction (spring), growth (summer), maturity (autumn), and decline (winter). The duration varies in different industries: fashion companies think in months, tech ventures in quarters, fast-moving consumer goods companies in years, and energy companies in decades.
    • The company life cycle often maps the stages of the product life cycle. A startup creates and launches an innovative product (spring). Then, it evolves into growth- and sales-focused small- and medium-sized enterprise (summer), which later matures into an established large corporation (autumn) that eventually begins its long, steady decline (winter) before it is closed down. A recent World Economic forum study put the average life span of today’s multinational, Fortune 500-size corporation is 40 to 50 years; interestingly, corporate life spans have shortened in recent years.
    • The business cycle (or economic cycle) captures upward and downward movements of a country’s economy as measured by the gross domestic product. These GDP fluctuations involve shifts between periods of dynamic economic growth (expansions and booms) and periods of decline and stagnation (recessions and depressions). For example, the US economy passed through 11 business cycles from 1945 to 2009, with the average cycle lasting about 69 months, or a little less than six years. Expansions tend to last longer than contractions (58 months vs. 11 months for the US).
    • Long cycles describe major technological shifts that happen in long waves of four to six decades, known as Kondratiev waves for the Russian economist who uncovered these tech-driven long cycles. In the last 235 years, we have passed through five such long cycles, each of which was driven by distinct lead technologies: Water power, textiles and iron led the first wave (1785-1845), followed by steam, railway and steel (1845-1900), electricity, chemicals and automobiles (1900-1950) and petrochemicals, aviation, and electronics (1950-1990). The current fifth wave is driven by digital networks, software, and new media (1990-2020). The  sixth wave (2020-2045) is expected to be driven by clean technologies that promote resource efficiency. Interestingly, the duration of the long waves shortens with each new one — and so does the average life span of corporations.

    These four major cycle types not only connect to each other, but also influence many other phenomena in business. For example, the stock market tends to move with the business cycle. Industries (and the technologies that get them started) move into a new season with each new long wave. Moreover, each long wave comprises five or more business cycles. Some analysts even suggest that peace and war cycles can be explained with the help of long waves.

    Why is it important to track cyclicality in business?

    Depending on the season (or cycle phase), a business needs to have a different focus, embrace a different leadership type, and shoot for a different type of creativity:

    • In spring, focus on creating new value (a product or technology) and of launching it in the market. This phase requires upfront investment and an agile creative leader who drives fast, meaningful change. Creativity is often technology-driven and pushes for bold, revolutionary ideas.
    • In summer, the focus shifts to customers and sales. Here, a people-oriented leader is the best choice to entice customers and motivate the team to reach ambitious growth targets. Creativity is marketing- and customer-driven and targets more evolutionary ideas.
    • In autumn, revenue growth flattens but profitability is still high. Now, a business needs to consolidate its growth with stable operations. The ideal leader here is a person focused on operational excellence and getting things done. Creativity focuses on practical improvements and customer service.
    • In winter, the emphasis shifts to setting up efficient, well-structured processes and systems that allow for scaling the business. As revenues and profits start to decline, the best leader is someone who enjoys tracking performance and enforcing organizational efficiency and financial discipline. Creativity targets incremental improvements of products and processes following an adaptive approach.

    Interested to learn more about this? Contact us to learn more about how to master cyclicality and successfully ride the waves of change in our innovation training courses.

    © Dr. Detlef Reis 2017. 


  • What kind of innovator does your business need?

    In an earlier article titled Growing with the flow, I discussed that, like living things, companies develop by passing through distinct phases in their life cycle. What’s also true is that as a company develops from a startup to a multinational corporation, different basic innovator dimensions dominate at different stages of a company’s life. Let me explain.

    The four dimensions of innovators

    Over the past few years, I’ve been developing an innovation-focused personality profiling system, and am currently fine-tuning it for market release in the first quarter of 2014. This system that we call TIPS is based on the idea that your natural work style, thinking style, life style and innovation style depend on the mix of four basic dimensions that drive your mental focus and energy. These four dimensions are: THEORIES, IDEAS, PEOPLE, and SYSTEMS (which together make for the acronym TIPS).

    When assessed on their combinations of these fundamental orientations, people fall into 11 types: Theorists, Ideators, Partners, Systematizers, Conceptualizers, Promoters, Organizers, Technocrats, Coaches, Experimenters, and All-rounders. Each of these innovation styles can contribute to a company’s innovation efforts, but different innovation styles come to the forefront at different stages in the corporate life cycle.

    How different dimensions drive and affect a company during its life cycle

    Let’s follow the life of a company to better understand how the need for the various innovator types — and their profiles — changes as it goes from a tiny new venture to a mighty behemoth:

    Phase 1: Great companies start with great IDEAS
    The idea on which a business is founded may be to fill an unmet need. An example of this is YouTube, whose founders Chad Hurley, Steve Chen, and Jawed Karim noticed the lack of an easy way to share videos on the web. The idea might also be to exploit a new technology or method, as in the case of Polaroid, founded by Edwin H. Land. The more radical, game-changing, and bold the idea, the more risky it is, the more reward it offers, and the more it can change the world. Ideators, the idea creators, often create and lead start-ups through their initial phase.

    Phase 2: Spread the word about the IDEAS to PEOPLE
    The second phase of company growth calls on both the IDEAS and the PEOPLE dimensions. Once a new product has been developed, then it’s time to build a brand and promote both the product and the brand. Among the 11 innovator types, the Promoter is most naturally suited to create convincing campaigns and to spread the word to the market.

    Phase 3: Get PEOPLE for Sales and Delivery
    This third phase is all about PEOPLE. You need to find the right people to sell your brand and product, and ensure satisfactory delivery and customer care. Partners are the innovator type most needed at this stage of a company’s development.

    Phase 4: PEOPLE use SYSTEMS to tame the chaos
    Sooner or later, if your sales team is successful, you will have a new problem: your organization will have problems keeping up with growth and maintaining consistent quality in products, delivery and services. This phase involves mostly the PEOPLE and SYSTEMS dimensions, as management realizes the need for organization at the front end, as well as a need for a more sophisticated back-end organization to ensure consistent service quality and customer care. The Organizer is the innovator type best suited to bring both order and a focus on service to a fast-growing company.

    Phase 5: Build smooth-running SYSTEMS
    As a company matures into a large corporation, the SYSTEMS dimension gains added importance. Senior management focuses on efficiency and productivity. The Systematizer is the right kind of person needed to drive and direct the transformation of a company into an efficient, productive corporation that is self-sustaining and not dependent on any one individual.

    Phase 6: IDEAS improve the SYSTEMS
    Once well-oiled SYSTEMS have been put in place, they can be shaped to improve the company. In order to do this, IDEAS are needed, along with the willingness to experiment and tinker with things to find the right business model, delivery channels, and partnerships to multiply the firm’s value. The Experimenter is the innovator type best able to figure out how to make the company successful in different markets, countries or even industries.

    Phase 7: Reinvent yourself and start a new cycle — or decline and perish
    By this time, your once-tiny startup has become a mature multinational corporation. However, natural systems have another phase in their life cycle: decline and, finally, death. Sooner or later, a new technology, business idea, or venture will emerge which challenges your company’s existence. If your company cannot adapt, renovate or reinvent itself — often because everyone in the company ignores the world-changing events around them — your company will start to decline, and may even perish, the victim of Schumpeter’s “creative destruction”.

     

    What about THEORIES?

    If you’ve been paying attention, you may have noticed that we’ve only mentioned the IDEAS, PEOPLE and SYSTEMS. Where do THEORIES come in? The answer is: Always.

    Theories and information inform your actions at every phase of the cycle. However, the focus of the theories shifts as the other dimensions come to the fore.

    • When IDEAS are most important, you need conceptual or creativity-related theories, such as basic research.
    • When PEOPLE are the focus, your firm needs marketing and human capital-related knowledge.
    • Building strong, flexible SYSTEMS requires a good theoretical grounding in operations, efficiency, and process.

    And those innovator types we haven’t mentioned yet —Theorists, Conceptualizers, Coaches, Technocrats, and All-Rounders? Their role is in creating, disseminating, and applying theories and information throughout all phases of the corporate life cycle.

     
    © Dr. Detlef Reis

  • Understanding the Cycles of Changes Using TIPS (part 1)

    Imagine a time machine brought you a few hundred years back in time to a feudal principality in the agricultural age. Upon your arrival, you’re randomly assigned to join one of three traditional social groups: farmers, clerics or warriors. You have to perform the duties associated with your newly assigned role. If you’re lucky, you feel a natural connection with your class, and perform well in your new role. But what if not? Today and in two weeks time, we’re going to explore the societal classes that preserve the traditional order and those that drive change — and how this struggle between stasis and progress perpetually drives the cycles of change in society and business.

    Introducing the traditional fabrics of society

    For centuries, the three social groups described in our imaginative scenario could be found in most countries:

    • The nobility was the first class. They owned and ruled the land. They paid for a standing force of loyal warriors who defended the lands against external enemies, kept the social order and collected taxes.
    • The noblemen also sponsored the second class: the clergy and scholars, who provided the nobles with knowledge and counsel, and also gave spiritual consolation to commoners to keep them docile.
    • Finally, commoners with many duties and hardly any rights formed the third class. These farmers and craftsmen did all of the menial work and paid taxes to the nobility in lieu of getting security.

    Together, these three groups formed a stable, traditional societal system. In every era, we can find similar social groups — for example, had you traveled back only a hundred years to the industrial age, you would see three similar groups: workers, academics, and policemen or soldiers.

    Fortunately, the feudal days are long gone, and the industrial age has ended, too. We have passed through the information age and are now entering the innovation economy. This raises an interesting question: What forces have led to the demise of each of the traditional societal models that dominated past centuries? Let’s answer that with the help of TIPS, Thinkergy’s innovation people profiling method.

    Introducing the four TIPS bases

    Most established personality profiling instruments exclusively use constructs to profile differences in people’s preferred cognitive styles. TIPS adds a new layer on top of these purely cognitive dimensions: the TIPS bases, which can capture both the dynamic, cyclical nature of business and social change, and people’s responses to these changes.

    TIPS distinguishes four bases: Theories, Ideas, People and Systems. We are all attracted to one or more of these fundamental base orientations. For example, the entrepreneur and inventor Elon Musk plays exclusively on the ideas base with his bold new ventures, while investment legend Warren Buffet’s success rests equally on two bases: theories and systems.

    The three traditional social classes mentioned above relate to the three TIPS bases systems (the nobilities and their warrior class), theories (the clergy and scholars), and people (common farmers and workers). But what if you were forced to work in a role that does not align with your natural base?

    Introducing the driving force of change

    Let’s expand on our introductory scenario: Imagine you didn’t go back in time alone, but in a group that included Elon Musk and Warren Buffet, both of whom were randomly assigned to work as farmers. What a waste of talent, you may think. Now, while Warren Buffet may accept his fate, Elon Musk will be a troublemaker. Why is that?

    There is a fourth social group that complements the three traditional ones. Depending on the historical context, we may call this fourth group merchants, voyagers, capitalists, entrepreneurs, creators, inventors, or pioneers. Elon Musk is one of them. The rebellious people belonging to this fourth group love to shake up the traditional way of doing things. In TIPS, these progressives  associate with the fourth base, ideas.
    Ideas people have high energy levels, as if change and progress were programmed into their DNA:

    • They take up new research and technological progress created at the theories base, and use it to create bold ideas and progressive change in the form of new social ideas or new products and ventures.
    • They know how to convince some people from the traditional bases to provide funds for their new ventures, or even better, they have already succeeded before with an earlier venture so that they can fund themselves.
    • Finally, they know how to enchant the people base to join their work force and consume their buy their products, earning them with their labour.

    In short, people aligned to the ideas base recognize opportunities to transform emerging new technologies into innovative products that they then introduce to the markets. They drive the cycles of change.

    Interim conclusion and outlook: In our TIPS Innovation Profiling Workshop, we bring the introductory scenario to life by enacting a game that allows people to experience what it means being assigned one’s right social role — or being stuck in the wrong one.

    So how about you? Do you play on a base that feels home for you? Do you see yourself as more of a smart intellectual, progressive entrepreneur, collegial worker, or rule-enforcing cop? Are you someone who stimulates, creates, enjoys or resists change? Come back in two weeks time, when I give you more insights into how to ride the cycles of change in society and business by looking at the four TIPS bases through another lens: the evolutionary macroeconomic concepts of Joseph Schumpeter.

    And if you’re curious to learn more about our new innovation people profiling method TIPS, then check out this video — and contact us if you want to be informed of the launch of our new online profiling platform in a few weeks from now.

    © Dr. Detlef Reis 2016. This article was published in parallel in the Bangkok Post under the same title on 29 September 2016.