Opinion/Analysis
If asked, “What’s today’s biggest threat to industry, even to society?” it would seem perfectly natural, eighteen months into the pandemic, to respond, “COVID, of course, and particularly the Delta variant.”
But I believe the biggest peril we face is losing the positive engagement of the next generation of leaders. I’m talking about the biggest generational cohort, U.S. millennials, and now also their younger peers, Gen Z, who are navigating unprecedented global challenges—from a pandemic to a global recession to climate change—during their formative years.
The very future of leadership itself is at stake, as the previously considered guarantee of a successful and happy future becomes increasingly tenuous. Survey data tells us that younger Americans are less optimistic about the future and more skeptical about how the system might deliver on their dreams, and that the pandemic and other events have eroded some potential young leaders’ trust in governments and electoral systems.
If nothing is done to address this, a generation or more could be lost. Their skepticism, creeping toward cynicism—regardless of how understandable it may be—could have a corrosive and long-lasting effect on how future leaders think and behave.
This diminishing sense of unquestioned national optimism has been present for some time. Of course, all generations have their defining struggles—from the Great Depression to WWII, from the Vietnam War to the financial collapse in the 1970s to 9/11. But while other historical challenges were confronted with a fierce sense of American can-do optimism, today’s arguably greater challenges are apathetically accepted with a sense of resignation, and even—dare I say it—pessimism.
This trend was observable in 2015, when I hosted a series of focus groups around the country and our findings made it strikingly evident how bleak young people were feeling about their prospects for success and a life at least as good as that of their parents. This research, part of a larger Kearney study on what America might look like when it turns 250 years old, asked different generations (boomers, Xers, and millennials) what they thought the “American Dream” meant.
Boomers (52 to 70 years old at the time) had lived the Dream: their lives had been filled with opportunity, and they were getting ready to retire (or had already retired) in a better financial position than their parents. Gen Xers were not nearly as optimistic. This cohort, then aged between 36 and 51, grew up thinking the American Dream was attainable. Many even thought they’d reached it. But then in 2008 the Great Recession struck, leaving many Xers in doubt that the Dream would return to their grasp within their lifetime: in other words, they had it, then lost it.
Millennials, who were between 19 and 35 when I was conducting this research, were by far the least optimistic group. Quite a few doubted that they’d be able even to match their parents’ level of financial success, let alone surpass it. One Millennial respondent had actually never heard the term “American Dream,” and guessed it was a famous racehorse. This erosion of hope as we traveled down each generational cohort was a startling indicator that Americans are getting more pessimistic with each generation.
This pessimism is not unfounded, as young Americans grew up during a time of 9/11, the Great Recession, accelerating climate change, widespread racial injustices, and heightening economic inequality.
Since our study back in 2015, generational divides have become more visible and pronounced.
Part but not all of this is financial. There is a sense plaguing many young Americans of an economic vulnerability that their parents did not experience. And this is rooted in reality. For instance, pre-pandemic (2019) data from the Federal Reserve showed that Millennials held about 3% of the nation’s wealth at the time. Boomers, on the other hand, held 21% of the country’s wealth when they were about the same age. Things only got worse once Covid-19 struck, thanks to high rates of job loss and lack of access to stable equity.
The pandemic has left millennials with the slowest economic growth of any generational cohort, and with less in savings and assets than previous generations had at their age.
Student debt is a major driver of this generation’s sense of financial precarity. Going to college is considered a necessity to pave the way to professional success and economic security.
What can we do to improve the situation, and bring back a vision that will empower and enable younger people’s success? There are a few options. In Germany and Switzerland, prestigious and well-regarded apprenticeship-based vocational training systems can be said to form the core of these countries’ economies. Unfortunately, it’s a hard model to replicate elsewhere, but that doesn’t mean that we can’t take some lessons from it.
Indeed, the U.S. has already seen some success with vocational “micro-credential” programs, like coding boot camps. Their advantage is that they offer fast, fairly inexpensive training (especially as compared to tuition at a four-year university), that’s often conducted online. As a result, they can give both young adults and those later in their careers marketable and in-demand skills. The system isn’t perfect—some of the skills offered don’t have a long shelf life as technology advances, and a lack of regulation has meant that some shady purveyors have been able to take advantage of people’s job insecurity and scam them. However, many companies are wising up to the fact that these training programs have benefits, most importantly that they train potential employees in high-demand skills. In one example, Google Career Certificates is a new program designed and taught by Google employees in such high-paying, high-growth career fields as data analytics and UX (user experience) design.
In addition to providing further training, leaders of today’s companies need to focus on inclusively and consciously bringing the new generation into leadership positions. This new imperative has already taken some interesting twists, as widespread business disruption in some ways changed the fundamental nature of what is required of business leaders.
For some time, it has been written that Millennials want and expect mentors rather than managers in the workplace. How this translates to the younger generations as they enter the workforce is that the nature of mentorship itself is changing, from top-down to peer-to-peer and reverse mentoring. Some companies are running successful programs, such as New York Life’s Employee Resource Groups (ERGs) that let mentees choose a mentor with a background of their choice, and Heineken’s reverse mentoring program “where mentees are leaders.”
But the vision of tomorrow’s leaders as successful, can-do Americans is still a long way off. Much more must be done to impart leadership to this generation and set them up for a more optimistic vision of possible outcomes. But that vision must be pegged to today’s realities, not a bygone myth. This means transformation from within, not mere cheerleading.
There is no easy, one-size-fits-all fix to bridge today’s generational divide, but we can begin by addressing the leadership divide. Solid career and job opportunities, access to effective and affordable higher education and vocational training, affordable housing, relief for crushing student debt and other such initiatives are needed. These measures can not only lift economic performance, as enabled consumers help stimulate long-term growth, but more significantly, can go toward restoring that American sense of optimism that has been so central to the success of our country and its leaders.
Now that we know what the problem is, and how serious it can be, it’s time to act. Only by rolling up our sleeves and getting to it can we hope to bring some of that quintessential American optimism back in line with today’s realities—for the benefit of future generations.
Paul Laudicina is chairman emeritus of global strategy and management consulting firm Kearney, founder of Kearney’s Global Business Policy Council and author of the just-published book Roadmap to a Brighter Future: Reimagining and Realizing America’s Possibilities, which further explores the themes laid out in this article.
