Gen Z: Leading With A Digital-First, Reform-Centric Mentality

Coming of Age

Gen Z (roughly ages 5–25) was already the most digitally engaged generation in history. Then the COVID-19 pandemic pushed them further online — precisely at the moment when many were prepared to leave their homes or universities and explore.

“There [was] a lot of pent up, early-to-late-teens desire to affect the world that just [wasn’t] possible,” Sienna Axe, a Hispanic Studies major at Whitman College, told Silicon Foundry.

This is just one of many paradoxes facing Sienna’s peer group: a generation that cares deeply about social issues and activism has faced unprecedented restrictions on economic and physical mobility due to the pandemic. Over the last year and half, Gen Z has weathered remote graduations, rescinded job offers and entire industries collapsing and reforming beneath their feet. If we look ahead, we’re forced to wonder: how will this shape our future corporate leaders in the years to come?

Decision-makers often face a tradeoff between sticking with what works and exploring the unknown for a potentially greater upside. Due to numerous factors discussed below, we argue that Gen Z is likely to be a generation of explorers, keen to pursue the latter path of increased risk and, subsequently, increased reward. This will have profound implications for how corporations are structured, how they engage with society, and how they pursue innovation.

Digital-First

As a group born during the height of personal consumer electronics adoption in the late 1990s, Gen Z is truly digital-first. More critical than exposure to technology, though, is Gen Z’s exposure to startup culture. As Gen Z’ers took their first steps, Google was founded. As they started elementary school, Mark Zuckerberg built out his idea for a social networking app. In high school, Uber, Lyft and Airbnb emerged as providers in a new type of economy. Throughout this period, Gen Z was imbued with the values of entrepreneurship through exposure to a dizzying array of startup bootcamps, accelerator programs, and experimental university classes.

Gen Z has been formed by a world where moving fast and breaking barriers is not only accepted, but lauded; where anyone can be a founder; and where failing fast is rewarded because it demonstrates the courage to try in the first place.The process of identifying a problem, building a team of like minded, passionate people, and building a technological solution is second nature to this digital-first generation, in which accepting the status quo simply isn’t an interesting proposition.

Reform-Focused

There’s a sentiment that Gen Z has been left with the bill of previous generations’ bad behavior, which has compounded their rejection of the status quo. A common assumption is that the status quo is a safer bet because it is known, while deviating invites risk. Yet with climate change, persistent racial inequity, student loan debt, rising costs of living, and inaccessible healthcare (to name a few), Gen Z’ers may not feel like there is a status quo worth defending at all. Per Vice, 20 percent of Gen Z expects their government to embrace economic socialism by 2030, compared with 8 percent of Millennials and 4 percent of Gen X. The hunger for change, whether at a social or government level, may spur greater interest in exploration.

Pandemic-Led

COVID-19 accelerated the cultural and economic trends listed above–and Gen Z was particularly hard-hit. Pew Research Center found that 50 percent of Gen Z “reported that they or someone in their household had lost a job or taken a cut in pay because of the outbreak. This was significantly higher than the shares of Millennials (40 percent), Gen Xers (36 percent) and Baby Boomers (25 percent) who said the same.”

A higher appetite for risk due to engrained startup culture, a desire to break from the status quo and an agility demanded by pandemic may all characterize Gen Z, both now and in the future — but how?

Near Term (1–3 Years)

The economic effects of COVID-19 hit Gen Z in multiple ways. In spring 2020, companies rescinded internships and entry-level positions to mitigate risk. Unemployment rose sharply and gave rise to a global worker shortage.  But Gen Z has opportunities to earn money online. Since the Great Recession, the digital economy has blossomed, offering new financial opportunities — from TikTok influencing and gig economy jobs to small SaaS businesses with low overhead and support from external cloud providers and APIs. Gen Z may also be more willing to simply roll with the punches.

“We still might be feeling the effects when we graduate,” says Rohan Shah, an undergrad student at Harvard University. “It will make my generation, as a whole, more adaptable to challenges and reflexive to random things we can’t control in the future.”

Gen Z has the tools to embrace digital-first work decentralization, and likely will do so at increasingly high rates simply because they have no choice. They will be forced, in many cases, to be explorers.

Medium Term (4–7 Years)

When the economy does recover, employers may be faced with a tight labor market because young people will have already carved out alternative paths. As a result, Gen Z may wield significant leverage because many will have already been forced to establish their careers independently; they won’t necessarily need the corporate track, so corporations must prove they should want it. Pre-COVID-19, a Deloitte survey found that 77 percent of Gen Z thinks it’s important to work at organizations whose values align with their own.

“I’m a big believer in social justice,” says Sienna. “Businesses aren’t people…they should have a responsibility, but there’s no physical way for them to, so it’s easy for anyone involved in any company to distance themselves emotionally and morally.”

Companies will have to work harder to prove to Gen Z candidates that they will hold themselves accountable, both on internal issues like workplace harassment and external issues like sustainability and racial inequality. It won’t be enough to simply pay lip service to these issues in the veil of marketing speak, either; companies will have to stand for something, be consistent in that stance and substantively engage it on a continual basis.

Long Term (8–10 Years)

As Gen Z’ers rise the corporate ranks and move into leadership positions, we may see a series of new behavioral outcomes.

First, there may be a paradigm shift at the executive level toward exploratory corporate strategy and innovation, given Gen Z’s predisposition toward breaking through the status quo and “forced explorer” experience post-COVID-19.

“If you don’t know if something’s going to work, it’s worth trying over things that either worked for a specific type of person or we’ve been told works [even when] that’s not necessarily true,” says Sienna.

The willingness to embrace a new unknown rather than making incremental changes to a flawed status quo may reflect itself accordingly in Gen Z’s investment decisions, particularly as Gen Z grapples with systems that were designed to only benefit certain groups of people at the expense of others.

Second, exploratory innovations may be guided by values-based principles regarding the future of humanity and global citizenship; perhaps executives will centralize these principles in the decision-making process, rather than nodding to them in siloed CSR initiatives. In fact, pursuing social impact and innovation together is a natural pairing, as both are aspirational mechanisms to shape a better future.

Third, there may be widespread adoption of principles that challenge the way corporations today build, scale and grow new innovations. This could include an increased focus on models like venture studios, but it extends beyond to more experimental, corporation-wide applications as well.

Chinese home appliance manufacturing giant Haier provides a notable example of the type of thinking that may become more prevalent when Gen Z holds the reins. The executive team broke the company into 4,000+ micro-enterprises, each responsible for its own independent business. This model incentivizes entrepreneurship in what would otherwise be middle management roles, while encouraging a sense of ownership over final products. Given Gen Z’s increased appetite for risk and explorer mentality, such internal corporate innovation models may become standard.

Future-Forward

Prior to COVID-19, Gen Z was already positioned to be a disruptive generation due to its digital-first, reform-led mentality. The pandemic has only forced these characteristics to be more immediate and acute, requiring that Gen Z’ers think creatively about their career prospects before they even start their first jobs. While the near- and medium-term impacts on Gen Z may look similar to those on Gen Y during the Great Recession, the digital-first nature of Gen Z opens up new possibilities for innovation and entrepreneurship during a time of significant tumult. In the long term, more importantly, we may see a wholly new type of corporate leader emerge — one that embraces notions of decentralization, increased accountability and ownership, and above all else, exploration.

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