RISE Generational Theory by Miklós Palencsár

For those who are in the business sector, it is nothing new that it is imperative to understand the roles, behaviours, and thought processes of different generations. I myself started to explore this topic because I was curious, and for a trivial reason. Both in my private life and in my closest business network, the ‘army of children’ called the ‘Ruler Generation’ became more and more ubiquitous. Before that, I wasn’t really interested in generational theories, partly because professionally, I couldn’t identify what I had learned from this field. The most widely known approach is the so-called ‘X, Y, Z’ theory. When ‘Baby Boomers’, i.e. people born between 1943 and 1960, and the previous generation, the ‘Veterans’ or the ‘Silent Generation’ born between 1923 and 1943 are added to the X, Y, Z theory, we get a whole generational process. Members of ‘Generation X’ were born between 1960 and 1980—more accurately, the theory defines the generation as people born in the early 80s, but there are different definitions and let’s accept this as a rule of thumb. ‘Generation Y’ is defined as people born between 1980 and 2000, and ‘Generation Z’ is defined as people born after the year 2000. To be honest, I’ve never understood how a person born in 1961 and another born in 1978 can be assigned to the same group. Just consider the number of important events between these two dates that influenced society and the way people think.
Of course, the main point of generational theories is to make global statements. The only problem with this is that it completely neglects location-specific solutions. Yet in business development, we can’t say that things are like this or that ‘out there’, so you should just follow suit. Clients pursue success in specific locations, like Germany, Spain, England, etc., even if it is an international network we are working with. Their businesses need to be built there, a person we analyse lives in a specific location and wants to be successful in specific locations during a specific period. And it doesn’t matter if they are present on the international or local market or both, people need to be recruited to their base, an image has to be built in that market, and if a company goes abroad or if it is a company with an international network in the first place, it is specific locations that are important. It is not a global trend that they need, but the generational process in the, let’s say 49 relevant countries. It is not a coincidence that on the international stage, a process started over a decade ago—and my team and I have been at the forefront of this—to develop new generational approaches that make generational theories easier to understand and apply in practice. As a result, RISE now has its own generational theory, and we are strategic advisors on this subject to an ever-increasing number of international companies.

Generational Periods

My first request to my team that examined social processes and sociological milestones was to shorten the 20-year periods used by traditional theories. The world is changing so fast, and so many events happen over a short period of time that significantly influence the thinking of generations, that a statement cannot be considered professionally sound if it considers people born over the course of 20 years as having similar decision-making processes. All this is based on the fact that there is an essential difference between traditional generational theory and the generational trends in business psychology. Business psychology defines successive generations based on decision-making, as the goal is obviously to use this in business development and related personality and behavioural tests. As opposed to this, traditional theories have a sociologist’s approach and are based on facts and points of reference that have become obsolete for use in business. Globally, there are very few events or conferences that are based on Generation X, Y, & Z theory since modern businesspeople have moved on from this. When it comes to terms, it is important for us to consider generational movements from more universal cultures, e.g. Chinese, Celtic, or Ancient Greek, since these cultures explored the different thinking of different generations or have been exploring this for thousands of years. Pursuant to our research, we aimed to have generational periods of equal length. Currently, our theory uses 12-year periods, and in the assessment of specific persons, we switch to 4-year terms. This allows us to define generations where the decision making of the members is largely homogeneous because of the social and sociological impacts they experience. Of course, I need to add that generational factors can never override an individual’s personality; they can only add to it. Thus, identical influences and a shared way of thinking do not mean that decision-making among members of a generation will be the same, as it is always the individual personality of the person that ultimately determines decisions. However, it is quite obvious that a 4-year term can provide more accurate information on people born during this time than 20-year or 15-year terms.

Personality Charges

The main point of our generational research is to be able to define the personality type ‘charge’ for people in a given generation. Like a current pushing a boat in a particular direction, generations push its members toward a specific personality type. Events in a society and the influences a generation is exposed to can be used (via complex calculations and deductions) to clearly determine the direction of the personality type charge in a given generation. Of course, it is important to consider every significant event that happened in the given period and location. And here is where experts say traditional theory fails, and as a result, the greatest challenge in business today is to understand, motivate, and employ young people we call the ‘Ruler Generation’. If you just take ‘Generation X’, it puts people born in 1960 and 1980 in the same category. Let’s take a look at this with a post-Soviet country in mind. Businesspeople born in the early 1960s went into business at the beginning of the market economy, after the dissolution of the Soviet Union. Most of them started their own companies and tried to achieve success with the, let’s say, unique interpretation of still-evolving tax laws. These people didn’t have the Internet at school; they didn’t even have computers. I don’t have to add that social media was non-existent at the time.
Conversely, those who were born in the late 1970s entered the market in an era when they were mostly pursuing success at one of the multinational companies that were flooding the country at the time, by using degrees they just obtained, all taking place in an existing market economy. They weren’t required to learn Russian in school but instead could choose English or German. Computers were everyday devices, and many could spend years abroad during their college or university years, even if they needed to know the right people for this. How could we treat these similarly, people who grew up and started their career in business in the socialist era, and young managers who only heard about socialism or only have childhood memories of it? These two periods do not have much in common socially, and definitely not when it comes to business. From the aspect of decision-making, they are galaxies apart. And this is only about two generations, we can find such contrasts between any two generations, with differences at least as significant as these. If we accept this, we ‘only’ have to identify the personality types that are critical in decision-making for these specific periods. This is obviously about the proprietary know-how in which our research is rooted, so I can’t talk a 100% openly about it. What I can do, though, is describe the current version of the generational theory.

Generations Active in Business

The Authoritarians: the Supporter Generation

Members of the oldest generation still active in the business world today were born between 1949 and 1960, and their personality charge is Supporter. This is a strong-willed generation, for whom stability, predictability, empathy, and human relations – especially personal relationships – are crucial. They think traditionally. Professionally, they have customary steps, predefined and well-established career paths that must be respected. They are patient, they don’t rush, and this is what they expect from other generations as well. In addition to the term ‘Supporter’, we also call them ‘Authoritarians’. We do so because they ardently follow and respect traditions they are used to, and they expect everyone else to do so. For them, it was a long and difficult road to the top, and they can’t accept it if anyone skips a step. Also, they think their age and experience alone command respect, and it is tough for them to face the fact that some of their hard-earned experience is not relevant anymore. They worked hard for the authority they have, and whether this authority is respected is a highly sensitive issue for them.

The Precisionists: the Expert Generation

People born between 1961 and 1972 learned from the mistakes of the previous generation as they tried to learn a profession and build a career. While the previous generation (the Authoritarian/Supporter Generation) did not consider relevant encyclopaedic knowledge that important, as they relied on the experience they gained instead, it is rather vital for the Precisionists. The number of professional degrees increased, and Precisionists started to appear in the appropriate positions. While the Authoritarians’ business relationships turned almost into friendships, it was not a priority for this new generation. Though Authoritarians thought it was important to exploit the potential in personal discussions, the Precisionists thought that results spoke for themselves. A strive for perfection is typical for this generation, as they try to do everything very accurately in their lives. Make no mistake: this is not exactly true for a person with a highly Individual personality type who was born in this generation. However, a Precisionist is much more systematic and predictable than someone with the same Individual factor from any other generation.

The Diplomats: the Individual Generation.

People born between 1973 and 1984 had it easy because when they were leaving school, they had a lot of skills that businesses really needed and the previous generation (the Precisionist/Expert Generation) didn’t have: an international approach, language skills, IT skills, etc. As a result, they could join the business sector early and build a career very quickly. No matter whether they liked it or not, they had to get used to diplomatic processes as well, since without diplomacy no-one could get ahead at a multinational company. As business became global, flawless business communication became a priority, and they benefited from this, and this is why the Individual trait flourished. Let’s not forget that they saw the emergence of social media as a new channel of communication, which also had its advantages for them. This generation is often labelled as the ‘single generation’, which points out another important feature, their social approach. People of this generation, for reasons mentioned above, focused on their career over family. Many of them realised too late that to build a real family, it’s not enough to start when you have reached a certain point in your career, because if it happens when you are 40, it is not that easy to start and manage your private life. This is why there were so many successful but burnt-out managers in this generation: while they were bound to be professionally successful, more often than not their private lives were failures, and after the age of 40, they faced serious psychological challenges. This is one of the reasons why the Diplomats face unique problems in the middle stages of their careers. That is when failures in private life start destroying the dream world of the great career that was often fuelled only by good communication and diplomatic skills. The global financial crisis clearly had a negative impact on this, and the emergence of the next generation (the Ambitionist/Ruler Generation) did not help, either. The level of dominance of the Diplomats is lower than that of the Ambitionists, so they see young people as a threat to the positions they worked for, and this was a massive challenge for businesses for a long time. Jealousy and fear for their positions were the reasons they didn’t want to let the otherwise much-needed younger generation into their companies.

The Ambitionists: the Ruler Generation

The Ambitionist Generation is comprised of people born between 1985 and 1996. This generation has been the most puzzling one for businesses all over the world. This is a very dominant, determined, strong-willed, and often aggressive generation, whose thinking is extremely different from all previous generations. They are talented and learn fast, which they need because they are impatient. We have given a lot of lectures and have had workshops with managers to help them understand this generation, so we have seen countless misconceptions about them. One such misconception is the greed for money. Prior generations were quick to label the Ambitionists as ‘brazen’ when it comes to salaries and as greedy for money. However, experience strongly contradicts this. They can make demands all right, but money is only an issue if they don’t get other things with higher priority. The most important for them is to have a role model. This is not surprising, since they grew up in a world full of games, with talent shows and comic book heroes on the silver screen, and of course, the film industry and pop culture also pushed them in this direction. This is the point where there is the greatest clash with other generations, and this is not a coincidence. They don’t acknowledge the Authoritarian/Supporter Generation at all, since older people have no clue what Instagram is. That is an exaggeration, of course, but it is easy to understand that because of the difference in their level of technological competence, these young people are incapable of the respect that Authoritarians expect from them. We don’t have to judge this, but we have to accept this fact. They don’t think much of the Precisionist/Expert Generation’s capacity to promote their interests, as they see that most businesspeople from that generation suffered during the crisis. This is not an example they feel they should follow, and their dominance, which is something not to be followed, tells them to write off this generation. They have the greatest clash or the greatest friendship with the Diplomat/Individual Generation. This is a story with two sides: they want to accept them as idols, as role models, but they often look down on the previous generation because they obtained high positions undeservedly. We must add that there is a certain envy behind this, as the Diplomats keep the Ambitionists from climbing the career ladder faster. So, we can say that Ambitionists are quite selective about this issue. If the expertise of a Diplomat businessperson is relevant and if this person built a career while having a balanced family life, they respect and follow him/her and learn. If these conditions are not met, they disregard them.

The Followers: the new Supporter Generation

This generation is comprised of people born between 1997 and 2008 and is currently entering the business world. Their capacity to promote their interests is limited, and they will likely follow the paths taken by the Ambitionist/Ruler Generation in every respect. We needed a lot of workshops and focus groups to understand this generation as well. What’s sure is that they have values that were not critical for the previous three generations. Such values include caring for the community, community formation, and the wish to belong to a community, often at all costs. Emotions, a comfortable living environment, and supporting others are important for them. Of course, everyone says this about their own generation, if only because of partiality, but this generation genuinely believes in this cause and actually does something to further it. They will be part of changes to the business world, but they will not be the ones driving it. It is important to realise now, however, that this is a group that is relatively easily influenced and is crucial as a target group for business stakeholders, so there is an excellent profit potential here. They will mostly follow the lead of the Ambitionists, which means that for those who plan to do business in the long term, it is crucial to address the Ambitionists. Not surprisingly, it is their parents’ generation, the Diplomat/Individual Generation, and the decision-making of that generation that Followers oppose. The Diplomats built a career and then focused on family, but as the ‘single generation’, the majority of them were alone at the end of the day. This means that for the Followers, it is imperative to build interpersonal relationships and social relationships in time, even if it means putting their careers on the backburner.