10/12/2014 03:02 EDT | Updated 12/12/2014 05:59 EST

Corporations Need to Embrace the iGeneration

What society is facing is a fundamental schism between individual action and organizational inertia. As Silicon Valley has demonstrated time and again, small and nimble is increasingly where society is headed. As such, large institutions need to adapt to recognize the rise of individualism and respond appropriately to it.

Stuart Paton via Getty Images

The Scottish Independence vote. The rise of the Tea Party in the United States and right wing parties in Europe. Political commentators have stated that these geopolitical trends are symptomatic of society's increasing distrust for the elites and where society is headed. The general populace is increasingly disillusioned with today's leaders for a number of reasons, including:

(1) Self Interest Perception: The general populace is increasing viewing its leaders less as magnanimous individuals interested in serving society but more interested in serving themselves.

(2) The Regulatory Imbalance Perception: Increasingly, the general populace believes that today's elites are unfairly taking advantage of the current socio-economic system to their own personal advantage. Whether it is the increasing perception that an effective defense system is only available for the rich, or the perception that tax havens are being utilized by the rich to dodge taxes, the general populace is increasingly fed up with the lack of fairness and equality.

(3) The Lack of Economic Mobility: There is an increasing perception that upward economic mobility (or the "American Dream") is becoming a distant dream for a larger swath of the population than was possible in the past. Indeed, the Gini coefficient, a measure of the disparity between rich and poor, has been getting steadily worse over the past few years.

Many wonder what has brought about change in perception. While many would argue that today's generation of leaders is lacking the charisma of those in past generations, there has been a fundamental shift in how society functions. Some of the core societal changes that have occurred include:

(1) Increasing Automation: Increasingly, the general populace has seen the rise of "self service" and faster response times due to the rise of the Internet and automation. From self printing airline boarding passes to same day delivery services, we are increasingly being trained for self service.

(2) Growing Individual Empowerment: Increasingly, individuals are gaining more power to chart their own course. From the rising number of individuals pursuing startups and saying "no thank you" to the corporate career track, to people bringing attention to worthwhile social causes via social media, individuals are being given more tools to pursue paths and interests they want to pursue instead of following a specific, well worn path as dictated by corporations or governments.

(3) Instantaneous Reaction: Dues to the Internet and growing individual empowerment, an increasing number of individuals are demanding faster reaction from existing institutions such as governments and corporations. The view of the typical "4 to 6 week" response as incompetence, intransigence or both, people are increasingly unwilling to tolerate such reaction times and are willing to use more instantaneous channels to vent their frustration.

Existing age old institutions such as governments and corporations are facing a massive backlash from the general populace who increasingly see the lack of leadership and intransigence in today's institutions as not only a failure to adapt to the new realities but also of protectionist self interest. Indeed, society is living in an age of increasing transition and one that has not been properly managed.

In the past century, society has relied on the growing power and influence of large institutions such as governments and corporations to provide prosperity to a growing global populace. Whether it was providing jobs in endless assembly lines to produce limitless quantities of goods, or providing social security benefits to the sick and infirm, large institutions were sometimes seen as a benevolent benefactor.

That image, of course, has recently been battered due to the perception that large institutions are increasingly the problem rather than the solution. Whether it is burying individuals and small businesses under mountains of red tape or confusing value creation with financial engineering, large institutions are increasingly seen as a significant portion of what ails society rather than what improves it. This is why globally society is witnessing the rise of individuals and organizations which advocate the dismantling of large institutions. Examples are Scottish independence from the United Kingdom and the rise of the Tea Party in the United States.

The dismantlement of large institutions is not really what these individuals and organizations are striving for. It is actually a rebalancing of the playing field that they are advocating. An increasing number of individuals are asking for the ability to pursue life, liberty and happiness on their own terms and not one predefined by large institutions. Indeed, the growth of startups and independent freelancers in numerous fields is a testament to this desire of individuals to live life on their own terms and not become a "corporate widget".

While there have been many critics of this "individualistic" approach spawned as a result of the Internet, its influence and permanence is undeniable. From the growth of YouTube video stars that have the same star power as regular celebrities, to the social media promotion and success of worthwhile causes such as the ALS Ice Bucket Challenge, the power of the individual continues to grow exponentially.

Unfortunately the foundations of society have yet to adapt to this new reality. Institutions are still treating individuals as widgets that feed the ceaseless machine, whether it is treating them as another number in an overly bureaucratic process or demeaning individual contributions as meaningless in comparison to corporate behemoths.

What society is facing is a fundamental schism between individual action and organizational inertia. As Silicon Valley has demonstrated time and again, small and nimble is increasingly where society is headed. As such, large institutions need to adapt to recognize the rise of individualism and respond appropriately to it. This doesn't mean merely implementing technology, but rather to fundamentally change processes and systems to truly empower individuals and find new ways to organize individuals for the collective good.