The science behind culture: Why CEOs must prioritise understanding Gen Z social science for success

Cultivating an inclusive culture where multigenerational employees can work together effectively will be a top priority, writes Dr Fiona McIntosh.

On the face of it, a chasm yawns between today’s corporate leadership and the 2 billion-odd members of Generation Z – those born between 1997 and 2012. Generational differences have always been inevitable, but the social divide between Gen X (which accounts for many current CEOs) and Gen Z is driven by many factors, including experiential, social, psychological, and economic factors, as well as profoundly different experiences of technology. This makes it unusually challenging for organisations to accommodate the different needs of these groups in the workplace.

However, with Gen Z set to become a major part of the workforce, CEOs who understand the group’s needs and ways of working will be better positioned to attract, retain, and empower this unique and critically important source of talent.

Corporate leaders should view this as a strategic priority rather than an academic exercise. Gen Z’s sociocultural traits are likely to reshape the workplace soon to be more tech-enabled, purpose-driven, flexible, and collaborative, with flatter hierarchy and more open communication.

Spectrum of understanding

Ahead of this coming shift, corporate leaders’ understanding of Gen Z can vary and is often driven by their own experience. Gen X leaders may have Gen Z team members, Gen Z customers and, increasingly, Gen Z children.

Gen X leaders may recognise Gen Z’s digital fluency and social consciousness but may lack deeper insight into their values, work ethic, communication styles or preferred ways of working.

Gen X employees, on the other hand, tend to value autonomy, adaptability, and a result-oriented approach, shaped by an era of corporate restructuring and self-reliance. They often prioritise practical problem solving and individual responsibility, maintaining a more traditional view of professionalism.

These generational differences can hinder collaboration between the groups. Media narratives tend to focus on concerns around Gen Z’s social media habits, mental health challenges, and their vocal demands for workplace concessions. Consequently, CEOs might misinterpret their tech reliance as laziness or their heightened social conscience as a lack of commercial ambition, overlooking Gen Z’s multitasking abilities and digital fluency. Such misunderstandings may risk disengaging Gen Z team members and miss their fresh perspectives when solving problems.

However, the reality is much more nuanced. Gen Z’s constant digital stimulation has led to differences in areas such as the way they process information, their level of distractibility, collaboration styles, social consciousness, adaptability, and motivations.

These differences can bring new capabilities to an organisation. For instance, Gen Z tends to prioritise issues through a global lens. Many within this generation prioritise collective action over personal gain, which is promising in an era marked by social and political division.

Empathy is equally important for Gen Z. They want to belong, feel valued for their contributions, and know that their leader cares for them as individuals, as well as for their wellbeing.

With work health and safety (WHS) laws implemented across Australia since 2011 and an increase in awareness campaigns such as World Mental Health Day, mental health work initiatives are more crucial than ever. Organisations must proactively create a psychologically safe environment for all employees, promoting overall wellbeing in the workplace. By doing so, leaders can cultivate a supportive culture that enhances employee resilience and engagement.

Shared foundation

While Gen X and Gen Z might differ in their technological fluency and social priorities, they share a core foundation of resourcefulness, a strong work ethic and healthy scepticism towards authority. CEOs can leverage this common ground to foster valuable intergenerational dialogue.

This begins with a better understanding of and getting to know Gen Z team members by engaging them in ways they are familiar with. Leaders must take the time to understand what inspires and connects Gen Z team members to each other and to a collective purpose. A connecting leader who is self-aware, purpose-driven, inspirational, and resilient can build trust by being more open, transparent, and vulnerable.

At the same time, Gen Z can benefit from the experience of Gen X leaders, such as long-term strategic thinking and adaptability, honed from navigating earlier economic and technological challenges and shifts, while Gen X can gain valuable insights into the latest technologies and social perspectives from their younger colleagues. This cross-pollination of knowledge and skills benefits everyone and the organisation itself.

Cultivating an inclusive culture where multigenerational employees can work together effectively will be a top priority. Leaders must seek different opinions, backgrounds, experiences, and capabilities to inform decision making, create a psychologically safe space, and embrace differences and diversity of thought as second nature. Our research shows that 98 per cent of Australian CEOs say culture has improved retention rates significantly, and 92 per cent see culture as a key driver of financial performance. If leaders can better understand Gen Z, prioritise it as a business necessity, and tap into their unique advantages, they will be able to build a workplace that thrives on the strengths of both generations.

Dr Fiona McIntosh is a partner in Heidrick & Struggles’ Melbourne office and a member of Heidrick Consulting. She is also a Gen X leader and mother of a Gen Z daughter.