The potential impact of consumerization is much wider than generally understood. Combined with new working styles, it has the potential to improve organization structure and culture. Some organizations get this and are changing their DNA to reposition themselves ahead of competitors.
Yet, in the business and IT media, much of the consumerization coverage is about tactical issues: whether to have a bring-your-own-device (BYOD) policy or not; what a BYOD policy should contain; the sort of security software to buy; and how to use BYOD as bait to attract millennials/Gen Y (those born approximately between 1980 and 2000) as employees. These are all valid questions, but they should be asked only after much more strategic business challenges are addressed.
Most importantly, businesses need to think of the consumerization of IT as part of a wider set of developments that are changing organizations' structure and culture. On its own, consumerization is tactical and has limited potential — but as part of a wider strategy, it can help businesses reinvent themselves from the ground up.
What's the definition of IT consumerization?
The consumerization of IT refers to the situation where consumer technology buyers have become so comfortable and adept with their preferred digital gadgets and apps that they want to use them at work in preference to company-selected tools. At the same time, the phrase also refers to how private consumers now constitute a major market segment for technology products, while business purchases of technology are declining as an overall share.
Organization structure and culture are ripe for change. Sure, office life has changed in some ways over the past 20 or 30 years, but many businesses still work in ways familiar to previous generations: during the 'working day' (it may be 8am to 8pm now instead of 9am to 5pm, but it's there) workers converge in a shared physical location with desks, while managers sit in offices; staff use standard corporate technology connected to corporate networks, and a large chunk of time is spent congregating in rooms for talkfests called meetings.
This picture is evolving, but often too slowly. New startups and visionary businesses have already reimagined their structure and culture to take advantage of 21st century technologies. These post-modern businesses are set up for improved productivity and to attract the best of the talent from the soon-to-be-dominant millennials workforce.
Gary Hamel, visiting professor at London Business School and founder of international consulting firm Strategos, is the author of the book What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition and Unstoppable Innovation. In June 2013, he told the Consumerization of IT in the Enterprise conference (yes, it does exist!) that he sees consumerization and BYOD as the start of a revolution in the enterprise.
"Businesses have always been run as top-down, hierarchical organizations; that model has run its course for many lines of business," Hamel told conference attendees, as reported by eWeek.
"Bureaucracies need to be replaced. BYOD is the beginning of the end of the CEO-and-down concept. Employees want the power to make their own decisions, set their own schedules, work from wherever they can be comfortable, and BYOD helps free them to do that," Hamel said.
Hamel's theme is reflected in a Forbes article by internet entrepreneur and CEO of Fiverr.com, Micha Kaufman, with emphasis on the preferred work styles of millennials. "In my experience, what they [millennials] want from the company is to feel empowered, to be allowed to take risks, make mistakes, understand the grand vision and not just feel like a tiny part of a large machine," says Kaufman. He goes on to explain: "They want infrastructure to get the job done — connectivity and devices, not necessarily a cubicle and a lunchroom. They don't have as much interest in office parties and politics, and they don't believe in the separation between 'work' and 'life'."
What started this?
Where did the consumerization/business modernization trend come from, and why is it happening now?
First, a mixture of affordability and affluence has led to ubiquitous technology ownership. Smartphones, tablets, apps, and social media put cheap computing power in the hands of huge numbers of consumers across the developed world and an increasing proportion in the developing world. These consumers research, acquire, and apply their own technology. They chose what suits them — from a functionality, cost, and style perspective. Their tech gadgets and apps are one way they brand themselves, in a similar manner to fashion accessories and clothing. They reckon the tools they use at home are the tools they want at work.
Second, mobility. The simple fact is that if today's tech tools weren't mobile, consumers couldn't get them to the office, and the consumerization/BYOD trend just wouldn't get started.
Third, the internet, providing the on-demand apps, data, and social media that fuel consumers' mobile lifestyles and work styles.
Fourth, the desire of employees for improved work options. In particular, the growing proportion of millennials (a.k.a. Gen Ys) in the workforce is motivating businesses to respond to that cohort's desire for more freedom in how and where they do their work. Older workers from the Gen X and Baby Boomer generations are encouraged and stimulated by the millennials' lead, and they too are asking for change.
Millennials are showing the way
Businesses must design organisation structure and culture to be as attractive as possible to millennials, principally because they are becoming the dominant workforce cohort. According to a report in theweek.com, around 10,000 millennials turn 21 every day in the United States, and there are already around 40 million millennials in the U.S. workforce alone. A paper from UNC's MBA program says by 2014, 36 percent of the U.S. workforce will be millennials, and it's estimated that by 2025, 75 percent of the U.S. workforce will be millennials. There are parallels overseas, according to The Wall Street Journal, which recently reported that millennials account for approximately 40 percent of China's workforce.
So, how are millennials different? MTV's March 2012 'No-Collar Workers' research study aimed to understand and report the working experience through millennial eyes, and in some cases contrast that with the work perspectives of the older Baby Boomer generation. The study, reported in the Media Daily News site, delivers some interesting findings that are broadly summarised as a desire to have freedom and ownership over how they do their work and to integrate their work life with the rest of their life. In fact, millennials don't see their work life as divorced from other parts of their life, as evidenced by the 93 percent who say they "want a job where I can be myself."
The 'work-life smoothie'
Nick Shore, senior vice president of strategic insights and research at MTV, sums this up with a striking image that gets to the crux of the matter: "Think of all the distinctions you can between work life and nonwork life…from the clothes you wear, to the behaviors you exhibit, to the mind-set you bring to it. Now put all that into a blender. That's the work-life smoothie. The boxes are all turned into one big box, called living."
MTV's definition of the 'one big box, called living' characterises the importance for millennials (and older cohorts) of using the same tools for work tasks and non-work tasks. Just as they want to wear the same clothes for both, so they want to use their preferred digital technology, apps, and social media at work and at play.
This is a big challenge for businesses — not just for traditional IT and HR policy, but to the wider organisation structure and culture. To truly build a culture that delivers for millennials, and also for Xers and Boomers, CEOs and their leadership teams must look outside the BYOD policy to the wider challenges of building 'post-modern' organisations.
What do 'post-modern' organisations look like?
Household-name tech brands, including Google and Facebook, are often cited as examples, but more traditional organisations are also becoming post-modern. It's about more than benefits like free lunches and snacks, or fun work environments with beanbags, fussball, and pool tables. True, these are attractive to employees, but like a BYOD policy, they do not by themselves describe a post-modern business. What really defines a post-modern business is its collective mindset, or culture.
Writing in the New York Times, Tom Agan, co-founder and managing partner of brand consulting firm Rivia, talks of the way even the most traditional companies are changing culture to be more alluring to millennials: "Goldman Sachs, for example, recently announced its intention to improve the work environment of its junior bankers by having them work less. Goldman made the change partly because it was losing millennials to startups. If corporate cultures don't align with the transparency, free flow of information, and inclusiveness that millennials highly value — and that are also essential for learning and successful innovation — the competitiveness of many established businesses will suffer."
Agan references the book Why Nations Fail, by Daron Acemoglu and James Robinson, to show how millennials' work styles can foster innovation in a way traditional hierarchical organisation culture can't.
"When a small, closed group of elites holds power, it tends to limit information and education and resist innovations that threaten its strength, the authors explain. By contrast, innovation thrives when information is unfettered, education is nurtured, people can readily form new groups, and decision-making is inclusive. These circumstances offset the strong tendency of those in power to resist change — in a country or at a company," says Agan.
Millennials and their technology are the antidotes to closed, elite group-think, according to Agan: "Social media permeate the personal, academic, political and professional lives of millennials, helping to foster the type of environment where innovation flourishes. So when compared with older generations, millennials learn quickly — and that's the most important driver of innovation."
What really defines a post-modern business is its collective mindset, or culture.
In a February 2012 article in The Huffington Post, Caroline Dowd-Higgins, Director of Career and Professional Development and Adjunct Faculty, Indiana University Maurer School of Law suggests: "There are new data points to illustrate how Generation Y may be changing the professional work culture dramatically." Dowd-Higgins quotes from Millennial Branding, a research study on how millenialls use social media for personal branding. Study author Dan Schawbel, managing partner of Millennial Branding LLC, is reported as saying: "Companies need to allow Gen-Yers to operate entrepreneurially within the corporation by giving them control over their time, activities, and budgets as much as possible."
Dowd-Higgins adds: "The existing workplace culture must expand to accommodate Gen Y if we are to sustain a workforce into and beyond 2025."
According to the study, "Only 7% of Gen-Y works for a Fortune 500 company, because startups are dominating the workforce for this demographic in today's economy. If large corporations want to remain competitive, they need to aggressively recruit Gen-Y workers. Gen-Y will form 75% of the workforce by 2025 and are actively shaping corporate culture and expectations. Big corporations can't afford to be left behind."
Dowd-Higgins reports changes in several industry sectors towards more flexible working options, including telecommuniting. She credits millennials' demands as helping all generations to benefit. In addition, she sees major changes happening in the legal industry. "Large law firms, for example, have begun to add staff attorneys or contract attorneys into their employment menu for lawyers who don't want to work on the traditional partner track. Working in an engaging environment, with limited hours and a salary cap, is very desirable for some attorneys who prioritize work/life integration over the mega salary and goal of partnership."
What can businesses do to become more post-modern?
- As with any change process, be clear about your goals. Alistair Gordon, CEO of Sydney leadership development consultancy Harbour Future Leaders, says it's important to have clear strategic objectives for changes, like a move to consumerization. For most businesses, goals will include the following: attracting and retaining the best talent; improving the quality and speed of client service; improving internal collaboration/teamwork; or fostering and accelerating innovation.
- Next, given that "startups are dominating" the millennial workforce, established businesses must make themselves more like startups to project similar allure.
- Successful organisation change has to be led by the CEO, so get the CEO and the senior leadership team on board — otherwise, don't even start.
- Get existing millennial employees and prospective new ones involved in designing a culture they will embrace and promote to peers as a strong employer brand.
- Put particular emphasis on blending the 'work-life smoothie' and be prepared to cede ownership to employees about the way they work (when and where) and the tech tools they use.
- Push the change, but be patient. Change won't come overnight, new culture grows over time, and some policy setting will need fine-tuning.
- Remember that "sacred cows make the best burgers" — so, don't be distracted by vested interests or derailed by tactical discussions over the finer points of BYOD policy or employee benefits. Make sure business functions like IT and HR actively support the new approach, rather than finding excuses for why it's too hard.
Becoming post-modern will mean different things to different types of business, but the common goal is becoming a desirable destination for the best millennial talent (don't forget, that's 75 percent of the 2025 workforce).
Some businesses are already travelling the post-modern path and are well-positioned to win their share of new talent. The boards and shareholders of others that have yet to move should be asking serious questions of their executives.