The dawn of a new era - How insights from Gen Z define a new normal for today's leaders

You can no longer have just one foot in — it’s time to act and create the fair, diverse organizations that Gen Z not only expects but demands

The tumultuous events of the past several months have moved the conversation about diversity and equity front and center, and it won’t be allowed to quietly slip from the agenda this time.

 Many businesses want to do the right thing and take a stand to enact lasting change and end systemic racism, unconscious or otherwise, which has plagued their organizations through the years.

 A good place to begin is by examining the evolution of expectations from one generation to the next. While no generation can be solely responsible for righting all of society’s injustices, Gen X is in a unique position given that many of today’s business leaders fall under this identifier.

 But there are two pitfalls. First, Gen X business leaders — indeed all leaders — need to understand what Gen Z expects when it comes to equity and exactly where that bar is set. It’s a lot higher than even many forward-thinking executives realize. Secondly, these good intentions will amount to nothing if they are watered down during implementation or senior executives pull back when confronted with making tough decisions that depend upon honest self-appraisal.

 What’s required, instead, is the courage to be bold and do the right thing, right now.

Defining real progress

The key question then is, what does that change look like? For Gen Z (those born between 1997 and 2008), incremental changes and modest improvements are not enough. Gen Z is characterized by an awareness of the world around them and the strong need to make a difference.

 Their expectations for what is possible are ambitious. Young people have always had aspirations to change the world for the better (think the Vietman protests in the 1960s), but Gen Z’s predecessors didn’t possess the tools to enact change that today’s youth has held in the palm of their hands since birth. They have learned to take matters into their own hands rather than waiting for the change. We've seen what they are capable of on issues such as climate change and gun control. And we should expect no less when it comes to equality — be it racial, gender or economic.

 While far from perfect, the world in which Gen Z has been raised is increasingly progressive in its views toward gender and sexuality and more candid about the racial disparities still plaguing our systems. According to a report from Pew Social Trends published in January 2019, long before the killing of George Floyd, two-thirds of Gen Z (66%) said Black people are treated less fairly than whites in the US, compared to 53% of Gen Xers. The same study found that half of Gen Z believe that society is not accepting enough of people who don’t identify as a man or a woman, and 85% believe same-sex marriage is either good for society or a non-issue.

Consequently, Gen Z’s expectations of inclusivity and what needs to be done to achieve it are very different to those of Generation X. Gen Z has no time for mere words — there’s no tolerance for just being “better than before” — it demands a full reset. In their view, if a business isn’t demonstrating equality and a commitment to real change, you’re not just coming up short, you’re clinging to the past.

 Companies that are failing to make a positive difference risk being called out for not living up to their pledges and, ultimately, pave their own path to irrelevancy. Simply put, Gen Z won’t buy from you, and these exceptionally driven and innovative individuals won’t want to work for you either.

Actions, not words

Gen X is in a unique position to step up and effect positive, lasting change. But how? And what are the tangible steps these business leaders should take to address these issues?

 First, we require an understanding of the “markers” that matter to the next generation:

 ·      Gender – Just a few years ago, we would have celebrated women being “firsts” and “only,” considering that a mark of accomplishment. There has for too long been an acceptance of “doing enough” or delivering a partial fix. However, Gen Z views anything other than total equality, including those who identify outside the gender binary, as unacceptable and will think twice about attending a university or accepting a job where that is not the standard.

 ·      Race – The events of the past months have highlighted Gen Z’s expectations for us to face social injustice head on. They see and hear too many conversations justifying what is plainly wrong or self-congratulatory talk that rewards what Gen Z view as half-hearted measures. They have had enough and are determined to fix the injustices of those who have run society and the business world before them.

 ·      Consumerism – Their expectations of organizations who covet their business is far outpacing our norms. Gen Z lives out loud, openly sharing their opinions and lives online and demands similar transparency from the companies they buy from or will work for.

 But understanding and agreeing with the above is not enough. Neither is putting out nice-sounding, but essentially meaningless, statements. What is needed from business leaders is real, tangible change. Now is the time to do it — not next year, next month or even next week, but today!

Seize the moment!

Companies can no longer pay lip service to the concept of greater diversity solely to generate higher revenues and good press. From Gen Z’s perspective, a genuine commitment to equality is essential for survival. Businesses must proactively embrace these values before plunging profits force them to do so.

 And so, this transformation cannot be half-hearted. The COVID-19 pandemic has accelerated change across the board and there’s no turning back now. Business leaders need to prioritize reimagining their organizations with their future customers and employees in mind. That future is embodied by the values of Gen Z.

 You should see this not as a threat but rather an opportunity to move beyond the mediocrity that has been seen as acceptable for far too long. The potential now exists for real, meaningful and lasting change.

 What you may only dare to dream of as possible, Gen Z expects.

  The views expressed by the author are not necessarily those of Ernst & Young LLP or other members of the global EY organization.