Generation Z may seem like a world apart from the rest of us but they are tomorrow’s employees, customers and influencers. How will you engage them, asks Kate Parry
This article was first published in the February 2016 international edition of Accounting and Business magazine.
As businesses start to consider a time of revived consumer activity following the recent economic downturn and to plan for the longer term, they are thinking about what the world will look like and what people’s needs will be. In 10 years’ time, the cynical Generation X will be well into middle age and the optimistic Generation Y will be roughly in their 30s (see box). Generation Z will be in their 20s and fully active as social influencers, employees, entrepreneurs and consumers.
Born after 9/11, numbering over two billion globally and with an average life expectancy of 98, the ‘always-on’ Gen Z has a freedom of expression, enjoys unparalleled access to information and is completely unconstrained by the rules and order that have shaped the Baby Boomer, X and Y Generations that have gone before them.
Every generation will try to fix the flaws of the previous incumbents. They share mindsets caused by a common set of parenting behaviours – a set of filters that live with us as we go through the journey of life. These ingrain a common but contrary mindset in the generation that follows. In the seminal 1997 book The Fourth Turning, Harvard professors William Strauss and Neil Howe laid out their theory of a cycle of four generational archetypes – ‘prophet’, ‘nomad’, ‘hero’ and ‘artist’ – which form a long-established pattern of societal behaviour. They discovered that each generation goes through four shifts in mindset during their life and that these patterns have repeated themselves so consistently as to be predictable going back 400 years.
By taking this model forward, we are able to better predict the core characteristics of Gen Z and begin to consider how to adapt to the needs of this emerging customer and employee of the future. The key challenge is to see this generation beyond your own filters and ask yourself ‘What does each expect of my business, product or service experience depending on where they are in their life?’ Those who take the wider-angle view of the next generation are more likely to future-proof ideas and strategies and anticipate challenges before they become problematic.
Gen Z are being raised during an era of rapid and decisive change. The post-9/11 period has seen traditional Western superpowers challenged by the new Eastern giants, the meltdown on Wall Street and the crisis on the high street that followed, the fragmentation of power across the Middle East, inter-religious tension and social inequality rising at unprecedented levels. The disruption of this social turbulence has been amplified by the exponential growth of the digital realm. For Gen Z, the world is becoming ever more fragmented, yet ever more connected.
There are key macro trends emerging at a global and societal level which are, and will be, critical in forming the mindsets, behaviours and expectations of Gen Z. Here are three of them:
One - data, data, everywhere
The internet is a world of big numbers, but consider this: 90% of all the information ever produced has been created in the past two years. We are in the age of big data where, more than ever, all human activity is documented and stored. Being able to analyse this data holds big rewards. The McKinsey Global Institute recently estimated that the US healthcare system could save US$300bn a year through optimised crunching of the data produced by everything from clinical trials to health insurance transactions to ‘smart’ running shoes. However, how we navigate this mass of information is a problem for people and organisations alike. Facing this data deluge, Gen Z will be crying out for tools for filtering the data, so only the truly valuable reaches them.
Two - digital natives
Gen Z is the first generation to have the ability to be truly connected 24/7. Access to technology via smartphones, tablets and unlimited Wi-Fi has seen the rapid rise of the social media age and the dominance that it plays in these young people’s lives.
By 2020 Gen Z will be receiving direct performance information from a whole host of devices (watches, toothbrushes, cars); almost everything they use will be automated, controllable and trackable at the touch of a button. This complete openness in terms of privacy may feel unnerving to some, but Gen Z are digital natives and have few concerns over the impact of this.
Three - us versus them
Gen Z is growing up in a world that is increasingly factionalised, globally and locally, with different tribes turning inwards and setting themselves in opposition to the ‘other’. This can be seen in the global rise in nationalism and regionalism. It can also be felt in the increased distance between the top and bottom of society as inequality has grown to beat even the disparities of the Victorian age. From 1993 to 2012, the incomes of the top 1% of US earners grew 86%, while those of the bottom 99% » grew 7.3%. Counter-intuitively this may mean that, while they are more connected than ever globally, Gen Z will want approaches specifically aimed at ‘people like me’.
Although Gen Z are growing up in an arguably tougher world than ever before, in the face of previous generation’s mistakes they look to work together for the greater good. They’re the first generation for whom digital is a fundamental way of life as opposed to simply a medium for communication and entertainment. The development of technology allows Gen Z to have access to the means of production and creativity in a way that was never before possible. A business can be one person and their laptop; content can be curated; personalisation is moving away from something designed with a consumer in mind to content created by the consumer, for the consumer.
So what are the emerging characteristics of Gen Z and what might this mean for them as adults, given what we know about generational behaviour patterns?
In Denmark, Gen Z has been aptly dubbed ‘the curling generation’ because their parents have been diligently sweeping away the ice that lies in their path, with the intent of helping their offspring glide effortlessly towards their future. Throughout the research carried out by innovation agency Happen, we saw many instances of parents assuring kids that they’re ‘special’, and thanks to anxiety of these over-protective parents, Gen Z live largely in a bubble, discouraged from dipping a toe into the perilous ocean that is ‘the real world’. Having never been exposed to risk or been allowed to fail, they are less likely to want to try things where success is not guaranteed. This may make them fragile and vulnerable in real-world situations, ill-equipped with coping mechanisms and lacking independence of thought.
Commonly known as the Young Fogies, Gen Z possess a healthy dose of pragmatism. While Gen Y are defined by a full-transparency (even reckless) approach to social media, Gen Z share more judiciously, and are used to filtering through and evaluating large amounts of data each time they search for an answer. As adults, they may be unwilling to invest their time in finding out information, given they are so used to the instantaneous transmission of data.
However, as they strongly develop their skills for navigating and using information, their base level of factual knowledge can remain naïve.
When asked ‘Which characteristics do Gen Z display more than children of your generation?’, 59% of our global survey cited ‘worldliness’. The average Gen-Z child will have travelled to 11 countries by age 16 but, more than this, from a very young age they will have a truly global perspective. They’re very culturally accepting, already have large, mixed-culture friendship groups and have grown up listening to and communicating with people from all over the world via digital technology. Their habitual access to the wider world means they will look across the globe when seeking out products and services, and their multilingual abilities will further break down geographical boundaries.
Gen Z is empowered to connect with people and will be the first generation to have an active online profile throughout their lifetime (from baby pictures posted by their parents through to their own personal profiles as they grow up). Over a third of children admit to using digital platforms to communicate with family members in the same house as them. Social media is seen by Gen Z children not only as a fundamental means of communication but also as a primary source of information (90% of online purchases are said to be influenced by social media, and almost 50% of high-school students said social networking sites were highly influential in decisions about colleges and courses).
The ubiquity of social media and its influence on so many elements of Gen Z’s lives means that a robust strategy is going to be vital for any business looking to engage these digital natives. Gen Z are a ‘we’ generation, in whom team working skills have been strongly embedded. Their communitarian inclinations are partly due to rebelling against a sheltered upbringing; when they are let off the leash from parental control, it tends to be in the direction of their peers. This generation of community minded individuals will enjoy a collaborative working environment, and in the future it is expected that work undertaken for altruistic reasons will be increasingly the norm.
Remove your filters
It’s highly likely that if you have read this article and are over the age of 33 (Gen X or older), you will find it hard to fathom Gen Z’s attitude to a variety of life factors – from ‘Why bother with university?’ and ‘I share everything with everyone’ to ‘Why do I need a career?’ But removing your own filters and understanding these attitudes is fundamental to planning successful strategies to engage and influence this new generation now entering the public consciousness.
As an employer, manufacturer or service provider, you can future-proof your business using generational cycle theory to anticipate people’s needs and spot winning opportunities.
Kate Parry is a consultant at innovation agency Happen