The drivers of organisational change have evolved dramatically over the past two decades and companies no longer have the luxury of initiating change, according to their own timeline and objectives. Initially, more enlightened firms gradually began applying a more strategic lens, using organisational development tools such as SWOT (strengths, weaknesses, opportunities and threats), PEST (political, economic, social and technological)1 and Michael Porter’s ‘five forces’2 to plan and develop a change pipeline. Today, however, even these approaches appear reactive. The world is changing at such a speed and even the nimblest of organisations are finding it hard to shape-shift at the same speed.
All change, please
Since we published our book in 20223, war has broken out on Europe’s fringes and a cost-of-living crisis has bitten. Inflation, linked to what European Central Bank President Christine Lagarde refers to as the ‘changing geopolitics of energy’, is high across Europe.4 There is civil and political unrest in Peru and Brazil. The football World Cup in Qatar in November 2022 helped to shine a light on the work still needed for LGBTQI+ rights, and social unrest in Iran prompted by the treatment of women has grabbed headlines. The climate emergency is reaching the point of no return, though it is unlikely the COP27 meeting in November 2022 did much to reassure those facing severe drought in the Horn of Africa. Throughout all of this, COVID-19 continues to make its presence felt.
None of us have a crystal ball when it comes to geopolitical events or rates of inflation, but there are some broad themes to coalesce around. In our book, we write about ‘Society 5.0’, a term coined at the 2019 World Economic Forum (WEF) to describe the next ‘industrial revolution’.3 Society 5.0 is predicted to be an ‘imagination society’, where digital transformation and the creativity of a diverse set of people will combine to solve society’s problems and create value in a way that fosters sustainable development. Society 5.0 will demand real transformative change from organisations if they want to stay in business, and it will take a resilient, adaptable and highly creative type of employee – not only to withstand the sheer magnitude of change, but to lead firms through it.
Luckily, we have just such a group of employees staring us in the face – a powerful combination of two demographic cohorts known as the ‘millennial’ generation (the 1981 to 1996 birth cohort that reached adulthood in the early part of the 21st century) and Generation Z (those born between 1995 and 2015). Before diving into their pivotal role as change-centric employees, it is worth acknowledging the fact that these groups have a significant role as the consumers responsible for influencing and driving change.
Know your audience
The habits and behaviours of these two groups are forcing transformative change the world over – they are social media savvy and many are bloggers, influencers, YouTubers and podcasters. Their expectations have recast the way firms develop products and services, how they package and distribute them, who they partner with, and in many cases, even their mission and core values.
According to research carried out in 2021, Generation Z has certain consumer traits.5 These digital natives expect transactions and customer service to be fast, if not instantaneous, and if brands perform well in the eyes of these consumers, word spreads quickly. Similarly, they want convenience – whether it’s booking a taxi, ordering food or shopping, Generation Z have had the benefit of these capabilities from a young age and their expectations are higher. In a similar vein, 19% of US millennials are smartphone-only users, which means brands need to deliver a consistently flawless mobile experience.6
Additionally, simplicity and authenticity are key to building trust within this demographic. Research shows that their brand loyalty is highest when firms demonstrably care about their needs, rather than churning out carefully worded soundbites on social media. This has led firms to invest heavily in data gathering and analytics. This in turn is linked to ethics and how consumers expect brands to behave. In the 1980s, consumers looked for the ‘Not Tested on Animals’ verbiage on cosmetics. Today, expectations have mushroomed and wording such as ‘vegan’, ‘ethically sourced’ and ‘sustainable’ are now commonplace. A recent survey found that 85% of millennials consider it ‘extremely or very important’ for companies to implement programmes that have a positive impact on the environment. In fact, a surprising 38% are willing to pay a premium for environmentally friendly or sustainable materials.7 This is reflected in the number of B corporations (companies certified and verified to meet high standards of social and environmental performance, transparency and accountability) worldwide, which already number over 6,000 since the standard’s launch in 2006. Put simply, Generation Z want to buy from companies whose business models are underpinned by fairness, purpose and positive impact. The equality, diversity and inclusion (EDI) agendas that organisations have relied on for several years are no longer enough to withstand the scrutiny of this generation of consumer – the broader and more ambitious framework of environmental, social and governance (ESG) is finally getting its day in the sun due to brands realising they need to up their ethical game. This is not happening by chance – this is an evolution prompted and progressed by a generation of consumers who simply want companies to do better. Their needs are evolving rapidly, which means brands must now innovate at pace if they wish to retain them.
Let us now return to the inescapable fact that Generation Z as an employee cohort is central to leading and driving organisational change. As Siemens’ Global Head of Talent and Leadership, Robert Neuhauser, put it: ‘It’s cool to have the new generation coming in, they are allies to the 'change culture.’8 So how can organisations satisfy the same high expectations that this group manifests as consumers, now as employees? The recruitment of Generation Z (the oldest of whom are now joining the workforce) and the ongoing retention of millennials, will have many human resources leaders scratching their heads. Many firms simply do not understand the gulf in mindset between the generations, and even those that do are finding it difficult to get right. According to KPMG’s Chief People Officer, Kevin Hogarth, interviewees are ‘asking… challenging questions on environment, sustainability and governance (ESG) issues… Organisations seeking to recruit Generation Z and millennials need to be increasingly creative in showing how the work has purpose itself or can support other purposeful activities.’8
And there’s more bad news – namely, the mass exodus of over 50s from the workforce since the start of the COVID-19 pandemic. According to the Office of National Statistics (ONS), half of over 50s surveyed cited early retirement, illness or disability, mental health concerns and a desire for a healthier work/life balance as their top reasons for not returning to work.9 This has not only increased the urgency to hire, but it has skewed the demographic of the working population as the younger generation will make up an even larger percentage of the workforce than at pre-pandemic levels. In fact, according to the Institute of Leadership and Management, millennials alone made up 50% of the UK workforce by 2020.10
It will be challenging to recruit people without radically rethinking the salary and benefits package. The elephant in the room here is, of course, hybrid working. Younger employees now expect flexible working as standard. According to research by Oxford University and the Financial Times, this factor is so important that it often outranks other job attributes, such as ‘intellectually challenging’.11 This cohort simply expects to have more flexibility to fit in their own side projects, whether that be coding their own websites, filming fresh content for their YouTube channel or volunteering for a good cause. When in the office, open-plan layouts and collaboration spaces are expected, and while this is often the case in Europe, there are still office cultures that rely on allocated desks, corner offices and that ultimate collaboration killer – the cubicle.
Mentor to retain
Employee retention within this demographic is already proving challenging and will only become more so, with Generation Z employees expected to change jobs more frequently than any other employee cohort. The type of workplace support they need, which might help reverse this estimate, is very different to the traditional model of weekly catch-ups, objective setting, bi-annual reviews and the occasional training course. In the many lists of surveyed characteristics they most value, the same things consistently emerge – flexibility, work/life balance, diversity of workforce, development opportunities, collaboration, growth potential and social responsibility.11 However, the retention activity that cuts across all of this is mentoring. According to a report by KPMG, despite holding firm views on their direction in life, this group of employees still need help to harness their ambition, refine their ideas and focus on developing their capabilities. Sadly, the same report noted that most of the survey participants did not feel their employer provides sufficient (or appropriate) support for their advancement.12
Next in this issue
Leaders need to consider very carefully (and quickly!) when and how they can provide mentoring to half of their workforce. According to the Institute of Leadership and Management, 75% of managers already feel they fulfil the role of mentor, but only 26% of millennials agree.10 There is clearly work to be done here, not least to address that disconnect. Introducing mentoring programmes for new joiners, even informally, sends a clear message from the outset that the employer cares about their development. Models such as reciprocal mentoring, whereby younger employees are paired with more senior colleagues, could be hugely beneficial – not only do they get access to experience and advice from a more seasoned colleague, but their senior counterparts get a window into the mindset of the largest section of their workforce. Other firms have reported successful ‘multi-generational’ mentoring groups, where up to four different generations of employees meet to discuss and compare experiences and career goals.
Coaching for change
If Generation Z is central to leading and driving organisational change, how can coaching support them with this? Mentoring can be far easier for employees to comprehend. The expectation is that the mentor will share their wisdom, knowledge, experience and generally role model good leadership. If matched with the right mentor, both parties – mentor and mentee – can benefit from this collaborative working relationship, sometimes for many years.
As many readers will already know, coaching has a complementary but different focus and outcome. This short term, goal and future-focused approach is there to support employees, usually senior leaders, in how to work through, for example, a change challenge or dilemma. Very rarely is one-to-one coaching offered to those below middle manager level. This is why embedding coaching as a capability within the organisation is so essential.
Embedding a coaching culture in organisations
Imagine yourself walking through an organisation that has already invested in embedding a coaching culture. You would notice a combination of coaching being offered from internally trained and qualified coaches, who offer up their coaching time to others (in addition to their day job), and managers and leaders who have been trained in how to use the principles of coaching with their direct reports. Although not qualified as professional coaches, these leaders provide an essential role in helping to empower their teams by asking and not telling; by encouraging independent thinking and not immediately offering the answers; by fostering an environment that is psychologically safe and free from shame or judgment. As part of this coaching capability, you would see employees reflecting on important questions as a way of self-coaching before asking others, and colleagues coaching each other to find the answers, instead of immediately looking to their manager for solutions.
You would see a continuous loop of curiosity from everyone in the team and an engaged and motivated team who communicate well and have each other’s backs. Utopia, maybe? But does it have to be?
Of course, embedding coaching within organisations is not without its challenges. There is the challenge of resistance to being coached in the workplace when the ‘just trained’ manager tries out these new techniques back at work with their teams. If it’s already not hard enough for them to remember what to do and how to do it, when the manager is faced with crossed arms and silence, the temptation can be to revert to telling, advising or suggesting, all of which go against what good coaching is. So, how can we influence a team to be fully invested and ready to accept coaching?
One possible way this could be achieved is if the whole team is engaged in the process from the start. Imagine what it would be like to have the whole team attend a training course at the same time, learning the same skills and knowledge as the manager. The team would be encouraged to learn what coaching is, how the principles of coaching can be used and how they can all learn how to self-coach, peer coach and coach their manager. The training would include exercises and activities where the team would coach each other and support each other using coaching skills. The whole team would be encouraged to be curious, challenge perceptions, assumptions, beliefs and values. Perhaps then they will leave with a greater understanding of the importance of being listened to and why their manager is using coaching skills instead of simply giving them the answers.
Why does this type of training not happen more often? We can make several assumptions here. Squeezed budgets, not enough cover when the team are all at training, general attitude and mindset for the training, to name but three. Whatever the reason, if training managers alone is a struggle, then what needs to happen to make the difference? When we consider organisational change, we can see how coaching has a pivotal part to play in engaging with people to help them navigate the challenges that change often brings. How can we truly listen to others’ concerns and feedback about change, when managers come up against resistance when asking them questions? The idea of having a team that are fully invested and ready to be coached through these challenges no longer seems a dream but a necessity.
What can coaches do?
Coaches have a responsibility to walk the talk and champion the benefits of coaching. Internal coaches have influence within their organisations, to let others know what coaching is, to demystify the difference between coaching and mentoring, and will ideally be offering up their coaching services to as many people as possible. The more people who experience coaching, the more will realise the benefits and are likely to spread the good word. Social media is a good starting point. For example, LinkedIn offers an excellent platform to share your ideas, thoughts and success stories as a coach expert, network with other likeminded coach professionals and generally start up a conversation about this very important subject to rouse interest and attention. Writing something provocative often invites others to join in with their opinions.
External coaches have influence in different ways. They can influence their own executive coaching clients to share insight into the wider importance of embedding a coaching culture within their organisation. This is not about telling them what they should be doing, but to ask them how they are using coaching with their own teams and how coaching is valued within their organisation. These conversations are important to raise awareness, particularly with those in influential positions.
Shockingly, as an unregulated business not all experienced coaches (external or internal) feel the need to attend regular, or for some, any, coaching supervision. There are many reasons for this but for coaching to be taken seriously and to encourage a laser focused reflection on coaching practice, coaching supervision must be taken more seriously for continual professional and personal development. Coaches have a responsibility of championing coaching supervision and to encourage other coaches to do the same.
Both external and internal coaches are encouraged to join coaching bodies and network with other likeminded coaching ‘experts’. Alongside BACP Coaching, the European Mentoring and Coaching Council (EMCC), Association for Coaching (AC), and International Coach Federation (ICF) are the three most recognised coaching bodies. These offer coaches and supervisors the opportunity to become accredited in their coaching and supervision practice, and will add credibility and competence in their profession. Less known but equally important is the Association of Coaching Supervisors (AOCS). For those who are not receiving coach supervision, this is a good place to start your search.
Everyone who is part of the wider coaching and supervision community, whether that be as a coach – supervisor practitioner or a line manager using coaching skills with their team, can influence how coaching is championed by spreading the word, regular development and generally encouraging as many people as possible to realise the benefits.
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