Generational Shifts bring new data and challenges to the leadership of traditional companies. They also bring questions such as:
- How do we remain relevant?
- How do we balance our relevance?
- How do we continuously grow market share while understanding these shifts/consistencies in characteristics?
As Generation Z enters the workforce with new spending power, traditional companies will further have to ask – Are they late stage millennials? Are they completely different? or What are some similarities across generations which we can use to serve this market? Thoroughly researched answers to these questions [re Gen Z] are widely available. If one was to guess a brand which has popularity across all generations from Silent to Generation Z, Coca Cola might be a good guess; however, according to a Morning Consult report published on Business Insider, when looking at Boomers, Gen X, Millennials [Gen Y] and Gen Z, Amazon is a favourite. Capturing these generations are key based on size, spending power and company survival.
Before sharing answers and key variables to the initial three questions above, the following should be understood:
- Generations are contextualized according to culture. This simply means that while traits may be consistent across a generation globally, always remember the premium of culture when seeking to define and target a consumer.
- The Millennial Generation [born between 1981-1996, PEW Research Center] is not a one cap fits all and can be segmented in the following buckets Gray Millennials, Mature Millennials, Middle Millennials, Young Millennials
- Generation Z [born between 1997-2012, Pew Research Center] is not Millennial 2.0. As they become consumers, define them for who they are.
Throughout my work within corporate strategy, when it comes to capturing these markets, traditional companies often face a struggle of history vs the future and most times a balanced perspective is required. Traditional companies which are trying to remain relevant also face the curse of success within an environment of change…..’We have always done it this way…..We’ve been here before and survived/thrived. A company successfully navigating a new market is one pinnacle of leadership which means these shifts provide red carpet opportunities for current leaders. There are documented stories on popular global brands such as Old Spice repositioning themselves across generations. The key question remains: How can a traditional company adapt to generational shifts?
Is age an important variable?: If one were to look at companies that unsuccessfully sought to attract Millennial and Generation Z, one may think that the leadership age gap was the reason; It’s NOT! On the flip side, if one were to identify Millennial and Generation Z most favourite companies such as Netflix, Amazon and Nike, you would also realize that the Leadership and Executive Management are the same age as companies which failed. Based on in-depth research conducted, high level information shows that the average age of Senior Management at these mentioned companies are: 51, 51 and 54 respectively with the Board of Directors average age slightly higher. Therefore, the next question should be: What are the differences between successful and unsuccessful companies/brands in terms of generational shifts? The main answer to that question is mindset which is considered one of the most powerful variables of leadership. The majority of other actions stem from mindset. One scholar Keita Demming – whose work I frequently read – states that an organization is a combination of people. This therefore means that the actions of an organization often reflect the mindset of the drivers; its leadership. Facilitating the generational shift within your organisation requires a growth/open mindset by the leadership which will help in the balancing of legacy, experience and the necessary variables needed for the future. A growth mindset will include unlearning, shift thinking, experimentation and the consistent ability to match human/consumer centred design. As organizational leaders, one must be open to the imagination that generations carry different traits which impacts the HOW and WHAT of your strategy even if the WHY remains the same. Given that the age variable has been ruled out, it also means that adapting to the generational shift in the context of Millennials and Gen Z is not simply replacing the not so young with the young. Think of it like this: Not all Millennials/Gen Z are technology/digital experts and neither all Traditionalists nor Baby Boomers can be considered dinosaurs.
Accept trends … understand the data drivers: According to research, Millennials are driving the shift in viewing habits as entertainment consumption becomes further personalized. Based on a survey conducted by McKinsey on the 18 – 34 demographic, 40% cited Netflix as their most used TV Viewing option followed by YouTube. One may wonder why is Netflix so popular? Read the following statement:
“Detractors like to label the Millennial generation as the most entitled age group in recent memory (I counter with this). If true, Netflix has leveraged that by personalizing its content on a 1-1 level, rather than the 1-to many of traditional television, making it feel far more tailored to individual users. Netflix has endless data on viewing habits for each user: what you watched, how long you watched it, what type of content you like to watch, when you press pause, what type of content you jump from, etc. Using that data to serve and promote to an audience enables the streamer to keep them engaged; subscriber growth is key, but retention is even more important. The increasingly personalized nature of TV-viewing can be used as a growth tool that hooks audiences for longer. You could just hear the old guard of TV yelling, “And I would have gotten away with it too, if it weren’t for you meddling kids.” [Brandon Katz – How Netflix Became the No 1 Destination for Television – The Observer]
Interesting, right?! In the context of local culture, often you would hear an older person saying to a kid: “Why you don’t go outside and play…” “When I was your age…” We know how that statement ends and it’s always in response to a child glued to a cell phone or tablet. While the statement may have its “good intention”, several variables are overlooked. One is that the community bond formed from playing outside long ago, is now online. Earlier when I referred to unlearning, this is a perfect example. As a company, a dangerous place to be is trying to bucket a generation based on your perspective. You have to accept the trends for what they are and use the data to your benefit. Another example of this was seen in an episode of The Simpsons [Season 30- Episode 17 titled: E MY Sports] whereby Bart was consistently playing online games. Homer held an anti gaming view without knowing that this is currently a sport with immense opportunity for a son who is a digital native. For an organization to successfully adapt to a generational shift, the mind of its leaders must be in tune with that of its target. If the trend is instant gratification, you cannot win by offering delayed gratification otherwise you’ll be left behind.
End the “Us vs Them”… enable coexistence: I’ve always shared that successfully adapting to generational shifts will require coexistence. Think of a traditional financial institution which serves a family over 5 generations. In 2019, the institution’s leadership will be clear that there needs to be a shift in product delivery in terms of capturing Millennials and Gen Z; however, at the same time it will be quite unfortunate if one were to say serving these generations require the elimination of the Baby Boomers and Silent Generation. In the context of a bank, while the older generations may not be borrowing as much, their representation still needs to be an element of the conversation. Let’s take this example into the context of the workplace where many times there is a gap in viewpoints, attitudes and perspective across generations. Before I dissect, let’s accept: the world is forward moving. That means that the roles generations play shift. Expecting a 15year old to appreciate a Super Nintendo is equal to a 60 year old appreciating a PS4. As companies try to adapt, look for new ideas etc., its leadership must be willing to understand the value of mentorship and legacy thinking required to get the needed ideas from those within. At the same time, the Millennials and Gen Z must not underestimate the value of previous generations. Again, have a look at extremely successful millennial driven companies with millennial founders and look at their advisory team. There is a huge and valuable premium on coexistence which further highlights the role of mindset.
Think of this – As a leader, your organization may have declining sales and required to enter a new market demographic. You may have team members within your organization that represents the needed market. You need their ideas, you also need them to lead the charge. Your duty is not to be convinced, your duty is also not to compare how you would have done it but to facilitate apples with apples. Create inclusion! Many times companies underutilize the ability of their staff due to leadership bias. This is where your understanding of your legacy and mentorship comes in. You have to think of yourself as LeBron James – How do I enable other generations of basketballers to succeed? Trust is also key. It’s the last second of the game, you definitely can’t make the needed three pointer for the win….pass the ball….use your teammates. One researcher rightly puts it – Leadership is a constant reinvention process. If we were to use the context of modern digital transformation, the skills required are completely different to that which would have enabled success in previous eras.
Using the same example, on the flip side of millennials and Generation Z within the organization will have to give some level of reason for their usage/value. Though having the movements of the world in their favor, both younger generations cannot expect an older human mind to immediately relinquish that which they have known over years of existence, especially when successful. This would therefore require a level of perspective. Many millennials unfortunately subscribe to their generational bias while expecting others to understand. Yes, you may have the world on your side; however, everyone’s role is important. I refer to this as the ‘binary perspective’[also evident with other generations] which means MY WAY or THE HIGHWAY. For a company’s leadership to accept the millennial/Gen Z methodologies, yes facilitation is required; however, millennials and Gen Z must also understand the context of their environment. Leaders of today may not understand your behavior; but you have to give them valuable reason. According to Generational Expert and Leadership Consultant, Brad Szollose –
“- For millennials and Gen Z to coexist with boomers and previous generations, they need to understand the differences in how they were educated which means that convincing may require the showing of benefits, respect for hierarchy and the understanding that their position of authority took time. In addition, millennials must understand that when a previous generation acts slowly, it could be based on their trait of diligence. Again, for millennials to truly impact their workplace, it would require a degree of unlearning.”
The US vs THEM argument solves nothing. End it now! The binary opinion is further trumped when considering the impact of technology. To one generation it was native while the other adaptive. A good example of this is ownership of a smartphone in the United States of America. Research from PEW Research Center shows that across Millennials, Gen X, Boomers and Silent, the penetration numbers are 93%, 92%, 68% and 40% respectively. They coexist to allow proper communication. Remember the world moves forward!
In summary, I will reiterate the importance of mindset which drives the two supporting points of accepting the trends and allowing coexistence. As stated earlier, there is a household Caribbean brand whose successful generational shift should be discussed within the corridors of every discussion of this nature. In the next article, their successful transition will be shared in addition to other examples.