As we share our summary about Generational Time Periods below, the chart above depicts when each form of value was established and the story below shares how it was formed. The Economic Value established by each generation adds to the foundation in which the next generation builds upon, we do not believe this is a “replacement” of value, but more of an evolution of value as our needs and wants change, our desire for more “value” does as well. We are in the midst of one of the Greatest Economic Evolutions in history because we were not meeting all the needs of our employees, customers and clients. The US Economic system is the greatest in the world because it evolves to meet the needs of the people. The best companies will “harness the collective genius their people” and lead the way!
To fully understand the Evolution of Economic Value, we will demonstrate the “evolution" over the past 100 years by defining and depicting "Generational Transition Periods."
Starting in the 1930’s, just a year after the Stock Market Crash of 1929 which led to the Great Depression, the US economy was stagnate at best. It wasn’t until the early 1940’s that America started to pull itself out of the Great Depression, as the mass production of war needed materials started to build our economy back up.
As World War II came to an end, America was on top, we had won the World War and we had all the courage we needed to start some of the finest companies we have all come to know, many of those companies still exist today.
The US Economy was starting to create real Financial Value – value that was being created by the methodologies that helped us win the war, such as mass production and scaled distribution.
From about the mid-1940s to the early 1950s commerce at a mass corporate level was being established for the first time in America’s history. As business’s started to grow, employment grew as well and “the purchasing power” of the US consumer was being recognized for the first time in history. From the 1950’s to the early 1970s the generation that won the War, started America’s growth in enterprise, began to see what economic prosperity felt like and what having Financial Value meant to their families.
The importance of Financial Value was established and the influence of it was now foundational to the U.S. Economy. The Silent Generation as they are referred to, established the foundation of our economy, they also started something else, the next generation known as the Baby Boomers. This generation grew up seeing their parents start to establish their economic prosperity, but as with any generation, the next generation is urged to be better. The Silent Generation had courage, pride, an incredible work ethic but as a whole, they did not have formal education.
As the Silent Generation began to see the benefits of Financial Value, they believed their children should become educated, formally educated through our colleges and Universities. The emphasis on college and university education was not just for the elite anymore, it was becoming available to many, many more and their focus on education lead to the next form of “value” - Intellectual Value.
As this generation transitioned and was preparing itself to become the future industry leaders, the markets stalled from the late 1960’s to the early 1980’s as the Silent Generation passed the baton of leadership to the Baby Boomer generation.
By the early 1980’s, the “Intellectual Value” that had been taught to the Baby Boomers in the universities around the use of metrics, the importance of understanding balance sheets and income statements, financial ratios, how to use leverage, along with the advancement in technology, more and more numbers could be crunched through software programs. The data points the numbers created became the indicators that companies used to make the strategic decisions for their companies.
The Baby Boomers had fully embraced their parents will for education and brought a level of Intellectual Value through their leadership tenure to companies at a level that had never existed before. The markets took off from the 1980’s through the 2000’s, using and leveraging this advancement in Intellectual Value ultimately producing more Financial Value.
As our economy and markets flourished during the 1980’s and 1990’s, the next Generation of Leaders were developing, that would be the Gen X and Gen Y aka Millennials. They grew up in the 1980’s and 1990’s and saw the benefits of the Financial Value their grandparents created in our economy and the power behind the Intellectual Value their parents brought to the US economic growth engine. As this new generation of leaders entered the marketplace, they have helped push the Economic Value Formula to evolve into the newest form of value, “Relational Value.”