We need to talk about millennials

GC contributor John Gubert looks at the impact of millennials on the industry from a baby boomer perspective.
The cult of the millennials has gained its grip on the industry with a vengeance. I do not want to imply that there is nothing special about the millennials. I just want to make it clear that they are no different from many of their predecessors other than for the fact that the pace of change in the last two decades has widened the normal generational gap.

The baby boomer generation, of which I am part, were the first in the banking industry to understand they had to sell to clients and the first to understand the true meaning of financial services. They were also the generation, with an open enough mind in enough cases, to adapt to the earth-shattering change from a manual, paper based environment to automation.

The millennials are different. First, they have grown up in the grasp of technology and the resultant seismic changes it inspired. Second, they have developed in a diverse and multi-faceted communication and information rich environment. Third, they have seen more barriers destroyed than previous generations whether around racism, sexism or class, the welcome demise of the cult of lifetime corporate loyalty and, at least from a location perspective, nationalism and even regionalism.

At the time of the baby boomers, I can recall the more revolutionary among us describing our seniors as bogged down in the past glories of their organisation, having crawled up the promotional ladder primarily by longevity and consistent application of the social and functional rules. I can recall, at the time of change to technology, my colleagues splitting, somewhat arrogantly, our universe between the modernists and the permafrost. The permafrost saw technology as a means to continue the old structures, at best perhaps more efficiently. The modernists saw technology as “red hot” and likely to transform the industry, both infrastructure and commercial operations.

The reality, and this is relevant for the millennials as well, is that each generation is an amalgam of skill sets and competences, appropriate for their environment. The bell curve rules, whereby around ten percent will be high flyers, ten percent will be failures and the bulk will be mid-range players. It is perhaps right to say that the bell curve, over the years, has flattened with less differentiation between the ten percenters and the bulk, but the differentiation, in terms of reward, prevails. Many industry leaders are not unique superstars but on par with their ten percent peers; just lucky to have been in the right place at the right time. Perhaps they took charge of a business as it entered a growth phase? Perhaps they made a decision, which with hindsight, proved prescient and valuable? Or perhaps they blindly went where no one else would go; and got away with it?

And the millennials have some challenges. Is their culture compatible with teamwork? Will they reskill fast enough in the supercharged change environment of today? How will they adapt work life balances in a time zone insensitive age of instant communication? And what industry structure will they promote as they work into their seventies and try to avoid being the barriers to an impatient post millennial generation?Is the millennial a team player? The recent Olympics were a great example of selfless team victories as well as individual supreme performance. But all the individual performers saw themselves as part of a team with their invisible support structure being a key component of their success. The millennial also has to be a team player. But bankers are becoming more like the individual Olympic participants. Yet, they are not really solo superstars. Should they move organisation, unless whole teams are poached and the new venues are at least on par with the core competences of their legacy employer, success is not assured. The millennial leader, just as others before, succeeds if they have a strong team around them and if they work for a sound organisation.

And millennials need to reskill. Many talk of the need to feed millennials with new challenges. That need not encompass permanent functional changes as long as they and their organisations adapt to the inevitable rapid change in markets, some of which will be evolutionary and some revolutionary. I have always hated the idea that a function is a career-long silo. I have been a corporate broker, a research analyst, a corporate banker, a risk manager and a business leader. My career saw five changes. The millennials will see even more and they will have to move from business line to business line during their careers to ensure they can adapt to the critical changes in the markets. And they will need to accommodate change well outside of their historic comfort zones. In my baby boomer existence, we moved from a regulatory structure one could learn in a day to the need to have intuitive, knowledge based understanding of a broad universe of regulation and, especially, the ability to know when to refer and what to assess in depth. We moved from equities, convertibles, bonds and cash to multiple instruments, synthetics and derivatives. We moved from a simple age of primarily domestic investment to global across an ever greater range of products. And the split between treasury, capital markets or corporate banking and securities services was ended with the emergence of prime services as well as the convergence of long only through to alternative fund strategies. That change, in the age of baby boomers, is slow relative to the change the millennials will have to manage.

And the millennials will want to live. Yet my experience is they exist in the world of instant electronic communication and the demand for instant response, if not solution. How can this be reconciled, in a global market place without sensitivity for time zones or tolerance of time delays? It is clear that we are approaching an era where data consistency will remove some of the problems of today and the queries around them. But we are also moving to the 24 hour trading day, to real time settlement at the point of trade and intraday cash as a value and an investment. If the millennials do not want to burn out, single superstars will need to work more in close knit groups before the coming decade.

And that means a different work structure. It means a different compensation structure. It means different relationships. And it needs to be aligned to the length of their working lives. My generation retired at 60 or earlier after 35-40 years of employment. The millennials will work till at least 75 and retire after 50 years plus at work. The grey millennials will not be capable of leading edge performance in the post millennial age. They will need to find structures where careers operate on a basis where they peak, in career progression terms, perhaps a good decade before they make their final contribution.

In short millennials have excitement ahead of them. For me the big issue is whether collectively, they and their organisations, have the personal and cultural characteristics needed to deliver the coming change.