Phil Ruthven explains why ignoring the generational differences in our customers and our workforce poses a risk to business. 

    Generational differences are very important to businesses these days, especially in terms of marketing and staffing. One size doesn’t fit all, as they say. Consumers from each generation think and behave differently with their buying patterns and habits, and employees certainly view work in different ways if they are young compared with the “older hands”.

    There have been approximately 12 generations in Australia, of an average 20 years per cohort, since European settlement in 1788 and, surprisingly, six of those are still with us in 2015. Yes, half the generations that have existed over the last 227 years are still with us.

    This is, of course, due to the much longer life expectancy today than in the early days of colonisation. The youngest generation alive today, those 13 years of age and younger, are expected to live until 100; whereas the generation of the 1890s had a life expectancy of just 38 years. This also explains why there was no divorce – there just simply wasn’t time.

    Introducing descriptors

    Thomas Hobbes’ description in 1651 of English lifetimes as “solitary, poor, nasty, brutish, and short” was particularly true during wars.

    But it was probably true too for a lot of our citizens in the 1780s and for several decades later; and certainly accurate by today’s life and living standards.

    We only began to use descriptors for generations 50 years or so ago, and the US Government Census Bureau inadvertently can take the credit by referring to the post WWII birth rate as a “baby boom”, hence the term “baby boomers”. Prior to that you were the child, parent or grandparent generation. 

    Today’s co-habiting generations in Australia, and their monikers and clipped descriptions, are shown in the figure, together with their relative importance in numbers.   

    Three of the generations are similar in size and importance: baby boomers; Generation X; and the Net Generation (variously called Gen Y or millennials). Most of them are in the workforce of 11.7 million, together with some veterans from the Silent Generation (people born from the mid 1920s to the early 1940s.)  All are consumers, topped up with the Federation generation (older “civics”) and the younger generation Z. As a result, there are three to four generations of employees, and six generations of customers to address in our planning, tactics and operations. 

    Generation breakdown

    An anti-discrimination human resources regime means we could be employing three or four generations in our businesses; and that isn’t easy to manage. But to try to please 24 million consumers spread across six generations is close to impossible, except for utilities and some commodities. We have to make choices and focus to succeed.
    In the figure, the legend shows four descriptors matched to the colours on the pie chart. These descriptors are “civics”, “adaptives”, “idealists” and “reactives”. These descriptors were proposed by authors Strauss & Howe in their 1991 study entitled Generations.

    Strauss and Howe had gone back hundreds of years in the US and found that there were four types of generations that followed each other in rotation over and over again. 

    In short, the conclusion was that civics are the wealth creators and nation-building generation; the can-do generation, pragmatic and rationalist, but not endowed with a lot of social graces. The adaptives are generally silent and obedient but a more socially aware generation; they adapt wealth-building to other social needs, and make good leaders. The idealists are the social visionary and idealistic generation, want to change the world now; they are humanists, social re-engineers and big spenders.  The reactives are the conciliatory generation, consolidators of change and peacekeepers; they repair the economic damage of idealists and pave the way for the “new civics”.

    These characteristics are, of course, generalisations; and many other factors contribute to individual attitudinal and behavioural differences.

    That said, the current Generation X, aged between 34 and 49, are proving better chief executive officers than the baby boomers, lifting average post-tax returns on shareholder funds from a prevailing 11 per cent on average to 16 per cent. By contrast, age, wisdom and courage are required of our successful political leaders, as measured by balanced budgets, full employment, strong economic growth and other nation-building factors.


    Against these benchmarks, only one in four of our 76 national leaders since Captain Arthur Phillip have been all-round statesmen, albeit with imperfections and blindspots, and all were in the last one fifth of their respective life expectancies. 

    Australia hasn’t had one of these leaders for some years. There may be one in the wings. If not, we may have to wait for the aged industrious Gen Xers; but hopefully not that long.
    Yes, there are generational differences. As directors, we have only a marginal impact on political leaders, but we ignore the differences in our customers and our workforce to the risk of the business.  Managing these takes skill, tactics and tolerance.

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