Future-Proofing Your Organization: The Intersection of Agility, Inclusion, and Gen Z

17 Min. Read

Public opinion has significantly shifted over the past few years regarding the philosophy of diversity, equity, and inclusion (DEI). Spurred by the 2020 racial justice movement, we have seen the pallidum swing towards mature iterations of DEI, such as integration and sustainability. And today, messages of pullbacks by major corporations, elimination of affirmative action in higher education, or dismantling this work at the federal and state levels of government would lead one to believe we are swinging in the opposite direction. However, as Dr. Martin Luther King stated over 60 years ago, "progress is never inevitable. Every step toward the goal of justice requires sacrifice, suffering, and struggle; the tireless exertions and passionate concern of dedicated individuals."

Symbolically, this work, the palladium, is in a transitional state of uncertainty, caught between the progress of the Integration and Sustainability stage, yielding a broader societal backlash that undermines advocacy and transformational efforts. Practically, this work is at risk of stalling or regressing, which is not new in the equity journey. DEI has never been a passing trend or a static destination. In fact, resistance and opposition are historically documented as natural responses to efforts toward justice and equity. This moment emphasizes the need for persistence and commitment in the face of such challenges.

While I remain optimistic, I recognize that organizations, leaders, and individuals are grappling with their stance, publicly and privately. This month's newsletter is not meant to persuade one on where to align in this work but to ground us in research and inform us of the potential unattended consequences if we opt out of the philosophies of DEI, particularly as they relate to the future of business and the workforce. Data consistently shows that embracing diverse identities and inclusive practices is a strategic advantage, especially as an organization and society strive to future-proof itself in an era of agility, innovation, and the values of the rapidly emerging Generation Z (Gen-Z) workforce.

The Impact of Inclusion: Research, Results, and Reality

Business today significantly differs from the past, shaped by technological advancements, globalization, shifting workforce dynamics, and the evolving role of the consumer. Digital tools drive nearly every aspect of business. Globalization yields interconnected supply chains and international marketplaces, where organizations navigate complex cultural differences and geopolitical issues while fighting to leverage and attract the best global talent.

Employees' perceptions of work-life balance, demands for workplace mobility, and purpose-driven fulfillment have shifted the workplace culture. Consumers are highly informed, price-sensitive, and socially conscious. As companies are faced with navigating today's ever-changing and dynamic marketplace, one critical factor distinguishes itself as a crucial component for long-term viability and prosperity: embracing diversity, equity, and inclusion (DEI) as a strategic imperative.

McKinsey's Latest Report, "Diversity Matters Even More: The Case for Holistic Impact," emphasizes the undeniable correlation between leadership diversity and company performance. This comprehensive analysis spans 23 counties, six regions, nearly a decade, and 1,265 companies to provide compelling insights into the business case for diversity. The report reveals that the business case for gender diversity on executive teams has more than doubled over the past decade. In its first report in 2015, McKinsey found that companies in the top quartile (representation of women exceeding 30 percent) of gender representation versus their bottom quartile peers had a 15 percent greater likelihood of financial outperformance. In their most recent December 2023 report, that number has grown to 39 percent.

Comparable results can be illustrated when evaluating the impact of ethnic representation in leadership. McKinsey notes, consistent with time, there is a "39 percent increased likelihood of outperformance for those in the top quartile of ethnic representation versus the bottom quartile; this has persisted even with eight new economies added in our analysis of 2022 financial data." When considering both forms of diversity in executive team ranks, companies in the bottom quartile were found to be "66 percent less likely to outperform financially on average, up from 27 percent in 2020, indicating that lack of diversity may be getting more expensive."

Beyond financial gains, diverse representation correlates with higher social and environmental impact—including a more satisfied workforce. McKinsey defines these unique outcomes as "holistic impacts" that empathize with the interests of a broader set of stakeholders, including employees, customers, and investors. They found that "a 10% increase in diverse representation on leadership teams is positively correlated to additional score (points)" on the following:

1. Higher levels of ethnic representation in leadership teams are correlated with higher metrics across the board. For instance, at the executive team level, ethnic diversity is particularly strongly correlated with environmental and workforce scores and metrics: a 10 percent increase in ethnic representation is associated with a rise of nearly 4 points in climate-strategy scores and a close to 2-point increase in labor practice indicator scores.
2. Gender diversity, too, is strongly correlated with impact across all components, especially at the board level. Considering the "talent attraction and retention" and "labor practice" indicators, a 10 percent increase in women on an executive team is correlated with an around 2.1-point increase in each score. These figures more than double when the same increase is applied to boards.

Additionally, data from 2019 indicates that a 10 percent increase in women's executive representation corresponds, on average, with a 2.1% rise in the proportion of women employees and managers by 2021. A similar effect holds true with ethnic representation. While these outcomes are specific to women and ethnic leaders, they suggest that the means to said outcome reflect the presence of inclusive practices that make it possible for all to succeed.

Overall, McKinsey illustrates an undeniable correlation between diversity in top leadership positions and positive outcomes across various dimensions, including workforce dynamics, community engagement, and environmental impact. Similarly, other top consulting practices have found supporting data underscoring the impact of DEI. Please see the quick highlight below:

Boston Consulting Group (BCG): Research by BCG shows that companies with diverse workforces attract top talent and reduce attrition, with inclusive cultures cutting turnover risk by 50%. Employees in such environments report higher job satisfaction and motivation, with happiness increasing by 31% and motivation by 25%. Additionally, companies with above-average diversity in leadership experience 19% higher innovation revenue, demonstrating the clear link between diversity and business success.

Deloitte illustrates that diversity is a critical business driver, with 77 percent of job seekers preferring companies with diverse workforces. Diverse teams boost creativity and innovation by 20 percent, possess strong decision-making and faster resolution speeds, and have a 19 percent increase in revenue linked to diverse management teams. Additionally, they note that as Gen Z enters the workforce, they bring the highest levels of ethnic and racial diversity. According to a 2022 Deloitte survey, over half of Gen Z and Millennial employees would leave their jobs within two years if their organizations don't make meaningful progress in creating inclusive and diverse work environments. 

Generations	Born (Years)	Current Ages (2025)
Boomers	1946 – 1964	79 – 61
Gen X	1965 – 1980	60 – 45
Millennials	1981 – 1996	44 – 29
Gen Z	1997 – 2012	28 – 13

Deloitte's emphasis on Generation Z points to a new reality of workers and their perceptions that will inevitably impact workplace culture. Unfortunately, similar to millennials, Gen Z is experiencing infantilization, where they are often perceived and treated as children, even though they are adults. To better understand this phenomenon, we delve into generational mapping, guided by the Gen Z analysis of the Pew Research Center and the U.S. Census Bureau (Baby Boomers). Ultimately, this allows one to understand the birth years and the ages of generations as we further consider the distinct perspectives of Gen Z and the new majority perspective in the workplace.

This analysis indicates that, while assuming individuals typically enter the job market upon graduating in four years and starting college at 18, millennials would have commenced their careers at 22. As a result, the youngest members of this generation possess approximately 7 years of professional experience, while the oldest could potentially have over 20 years of experience. Generation Z is represented in the workplace with individuals who could have as many as 6 years of experience, marking them as the new leaders in mid-level positions to individuals having just entered the labor market in an entry-level capacity. Please note that the decision to utilize a college-bound timeframe was reflected by the degree requirement of many of our roles within the sports and entertainment industry.

Understanding Generation Z's age and years of experience is critical for two key reasons: understanding the composition of today's and tomorrow's workforce. Better equip our business with the agility to meet future employee demands and business outcomes. According to the Department of Labor, "as of the second quarter of 2024, Gen Z workers were almost a fifth (18%) of the labor force, with Baby Boomers comprising 15% of the labor force. Millennials made up the largest share of the labor force (36%), while the Silent Generation has almost entirely retired (1%)." Gen Z has surpassed Baby Boomers in the workplace while still having over 20 million individuals who have yet to enter the job marketplace.

Understanding Generation Z: Who They Are and What They Want

Generation Z is emerging as a powerful driver socially, culturally, and politically within their communities and workplaces. Defined by those born between 1997 and 2012, this cohort of society is more racially and ethnically diverse than any previous generation, and they are on track to be the most well-educated generation yet. Generation Z is also characterized as being the most LGBTQ-identifying generation. Gallup reports that "adult members of Generation Z, those born between 1997 and 2004 who were aged 18 to 25 in 2022, are the most likely subgroup to identify as LGBT, with 19.7% doing so. The rate is 11.2% among millennials and 3.3% or less among older generations." Generation Z can be characterized as a socially conscious generation. Most closely aligning with their predecessor generation, Millennials, they tend to prioritize diversity, equality, and inclusion; yet, they have notable distinctions amongst other generations and within the cohort itself. These differences will, ultimately, impact the workplace.

Across several measures, Gen Zers (and Millennials) align with the philosophies of an equitable and just society. Pew research found that "roughly half of Gen Zers (48%) and Millennials (47%) say gay and lesbian couples being allowed to marry is a good thing for our society.

By comparison, only one-third of Gen Xers and about one-quarter of Boomers (27%) say this is good." Likewise, Gen Z is by far the most likely to say that when a form or online profile asks about a person's gender, it should include options other than "man" and "woman. Over 50 percent of Gen Z and millennials view human activity as a driver for climate change. Seven in ten Gen Zers say the government should do more to solve problems, compared to older generations (53% of Gen Xers and 49% of Boomers). Similarly, Gen Z (14%) and Millennials (13%) are less likely to believe that the U.S. is superior to all other countries, compared to Gen X (20%), Boomers (30%), and the Silent Generation (45%).

Additionally, other research has found similar but notable differences around the characteristics of Generation Z. McKinsey found that the American Gen Z distinguishes itself from Millennials with a more pragmatic outlook, balancing aspirations for career fulfillment with an awareness of potential economic hurdles.

They report lower emotional and social well-being but place a higher premium on inclusive and supportive communities. With a strong emphasis on individuality and personal expression, Gen Z is also notably more engaged in political and social causes, often using social media platforms for advocacy and change. The Public Religion Research Institute (PRRI), A Political and Cultural Glimpse into America's Future: Generation Z's Views on Generational Change and the Challenges and Opportunities Ahead, found similar but notable differences around key characteristics of Generation Z, particularly among themselves. The most prominent are below:

1. Gen Z adults are more likely than older generations to say that social media (52%), organized sports (42%), or video games (48%) are essential for making meaningful connections.
2. About 1 in 5 Gen Z adults have faced hostility or discrimination because of their race, age, gender, gender expression, religion, or sexual orientation. This is less common in older generations, except for millennials, who report similar experiences of race-based discrimination.
   • Gen Z teens report fewer experiences with discrimination than Gen Z adults.
3. Gen Z adults are consistently more likely than Gen Z teens to experience negative emotions often or almost all the time. They are more likely to feel anxious (38% vs. 18%), lonely (25% vs. 10%), depressed (24% vs. 8%), or angry (20% vs. 12%), and are less likely to feel hopeful (49% vs. 57%).
4. Half of Gen Z adults (49%) say college is a smart investment, compared with 56% of Gen Z teens. Millennials (42%) are the least likely to say college is a smart investment.

As Generation Z continues to shape the future of our society, their unique perspectives and values will undoubtedly influence the workplace. Their commitment to diversity, equity, and inclusion, combined with a pragmatic outlook on life, positions them as catalysts for furthering workplace cultures where all employees thrive, regardless of today's landscape. By understanding their experiences and viewpoints, organizations can future-proof their business while fostering an environment that embraces their individuality and supports their aspirations.

Business Agility Meets Generational Expectations

Future and current Generation Z employees are entering the workforce with a sense of liberation, confidence, direction, and a sense of self that extends beyond their years. Ultimately, it poses a potential challenge for employers looking to recruit and train them using outdated strategies once successful for earlier generations. We have learned that Gen Z emphasizes organizational accountability in mental health, sustainability, and social impact. Technology has positioned them as a generation that values knowledge, human connection, personalization, and authenticity, all of which are, ironically, key characteristics of a successful social media presence. To future-proof your organization and bridge the gap between Generation Z's expectations and traditional workplace strategies, businesses must view this shift as an opportunity rather than a challenge.

Generation Z brings digital literacy that will force human resources practitioners to think critically about learning and development and workplace flexibility. Gen Z in the Workplace: Welcoming the Next Generation explores critical themes and generational myths associated with Gen Z. Udemy found that nearly all Gen Z survey respondents (94%) dedicate at least an hour weekly to learning, with the primary preferred learning method being complete online courses (44%) followed by real-world projects (12%).

This key preference contradicts the stereotype that Gen Z prefers to absorb information in short video snippets via social media rather than in a sustained and situational knowledge-gathering medium. Most Gen Z respondents (70%) are open to adopting AI-driven learning but express concerns regarding the accuracy of AI (48%) and potential bias (38%) in AI-driven personalized learning experiences. Learning and development leaders must design programs with their preferences in mind or consider offering varied formats, including ones that bridge the learning and communication preferences of the multigenerational workforces of today.

Technological advances, coupled with the onset of COVID-19, allowed Gen Z to grow up in a period that saw the blurring of the 9-to-5 work schedule and the rise of flexible work models—a model not historically afforded to other generations. This resulted in an early understanding of work-life integration and life beyond a 9-5. While we see them as a generation working to live and not live to work, they have been researched to have a paradoxical relationship with hybrid and remote work. A Psychology Today article summarized new research from the book Working with Gen Z: A Handbook to Recruit, Retain, and Reimagine the Future Workforce after COVID-19.

It was found that a significant portion of Gen Z is still in favor of remote work after the pandemic, with respondents saying they would like to work remotely at least 50 percent of the time and over 70 percent of respondents indicating they would consider moving out of state for a 100 percent remote job. At the same time, remote work has led to increased anxiety and feelings of loneliness for nearly 50% of Gen Z. This research leans toward organizations favoring hybrid model environments, in comparison to full in-the-office or fully remote, as Gen Z favors remote work flexibility, while still preferring in-person meetings (61%) over virtual ones (27%).

For Generation Z, human connection in the workplace is deeply tied to their sense of inclusion and belonging. This generation values inclusivity and community; they seek to create and experience environments where they can authentically engage with one another. As a result, UKG found "42 percent of Gen Z workers prefer face-to-face communication over any other digital communication method, including email (18%), instant messaging (15%), text (12%), telephone (9%), and video conferencing (4%)."

While this might come as a surprise, the cultural nuances of communication have made Gen Z constantly misunderstood and represented in non-in-person interactions. In fact, 61% of Gen Z report that they experience miscommunication at work due to email or digital tools, which can undermine the sense of unity and understanding they crave. Additionally, 48% of them find it difficult to speak up during video conference meetings, which can create feelings of isolation.

Organizations should look to provide training to help employees navigate the challenges of digital communication, which can mitigate misunderstandings and ensure smoother, more effective interactions across different communication channels. Additionally, a formalized policy or standard for communication in email should be created, particularly as the viewpoint on professionalism and workplace digital etiquette can vary by generation. Consider this: is using emojis in the workplace appropriate in chat? Does it vary team by team? What communication should be an email vs a meeting? Additionally, we must know that we cannot anticipate seeing a behavior we have not taught. Aligned with PRRI, "Americans overall largely reject the notion that young people are too lazy to get good jobs and instead believe that they lack necessary training." As technology usage continues to grow and enable the workplace to be more efficient and effective, we must bridge misunderstanding and skill gaps to ensure a workforce aligned with the rules to succeed. Additionally, let's meet the population where they are. Transitioning to video call culture, choosing frequent gatherings to provide moments of personal connection, mandating supervisors check in frequently, and offering insightful input, feedback, and consistent performance evaluation touchpoints.

Personalization is central to Gen Z's general engagement with the workplace and companies. Personalization is not just a trend but a fundamental expectation. Consider how Apple Music, Live Nation, Amazon, Netflix, and even your favorite sports team know enough about you as a consumer to understand what you want to watch, buy, and listen to. So, why wouldn't they expect the same interaction in the workplace and for their career growth?

Regarding career growth, Gen Z expects a workplace that will acknowledge their unique skills, goals, and aspirations. They are not a generation loyal to a company based on years of service, but rather by the intentionally the company offers back to them professionally and financially. Organizations should consider offering a streamlined, personalized career growth approach to retain this talent. Deliberate on how individuals can personalize their career paths by charting skill-building opportunities and chances for internal mobility.

Gen Z is highly interested in exploring different organizational roles rather than feeling locked into a single trajectory. Organizations should do the following: allow for individual tailoring of development programs, establish job rotations, personalize learning experiences, and create mentorship programs and leadership development initiatives that align with personal goals and organizational needs. Organizations that offer flexibility, personalized learning experiences, and clear growth opportunities are more likely to attract and retain top talent from this generation, fostering long-term loyalty and engagement.

Authenticity is a fundamental expectation. Having grown up in an era of hyperconnectivity and digital transparency, Generation Z has been consistently exposed to brands, leaders, and people who often lack a clear understanding of their values and self. As a result, this generation has developed a radar of inauthenticity and a low tolerance for such behavior. They value transparent, consistent, and genuine actions while recognizing that people and companies can and will fall short. This viewpoint translates into the workplace when companies fail to talk and walk the walk, especially in their commitment to people and societal good.

For companies to rise to the occasion and meet the needs of Gen Z, they must do the following:

1. Transparency First Culture: They expect transparency in all facets of the business. They want honesty and openness about company goals, challenges, and successes, as well as sincerity and candidness about company culture, employee well-being, and diversity efforts.
2. Open Dialogue: Authenticity requires a culture where employees can speak up, share ideas, and raise concerns without fear of retribution. They seek a workplace where things can be challenged, tough conversations can be had, and feedback will be implemented. World Economic Forum asserts that over 40% of Gen Zers, compared to 24% of earlier generations, would engage in discussions of sexism in the workplace, and they want their employers to join the dialogue while providing inclusive centric perks.
3. Integrity: The performative nature of "social good" for marketing or sponsorship rather than meaningful, impactful change will no longer be tolerated. Whether it's sustainability initiatives, DEI programs, or support for mental health, organizations must have actual, measurable actions that align with their values, not just performative gestures. According to Deloitte, "diversity matters to them through many dimensions, not just isolated to race and gender but also related to identity and orientation. Companies that can better represent the spectrum of differences in their external branding/marketing are much more likely to diversify their talent pipelines."
4. Consistency: Consistency is the foundation of authenticity. Gen Z expects organizations to uphold their values consistently and be reliable in their actions. Whether providing growth opportunities, maintaining work-life balance, or living up to commitments, consistency in following through on promises is non-negotiable.

In conclusion, despite the evolving landscape of diversity, equity, and inclusion (DEI) presenting both challenges and opportunities for contemporary organizations, organizations are going to have to lean into inclusion in order to future-proof their business. Research has shown Generation Z is on the pathway to being the next dominating force in the workplace bringing with them values centered on authenticity, social impact, and equity. Gen Z demands more than just performative gestures—they expect meaningful change and alignment between an organization's values and their own. DEI must remain a strategic priority, fostering a culture of performance, resilience, innovation, and authenticity that will allow Gen Z to thrive.

Companies that fail to adapt risk falling behind in an increasingly competitive, values-driven workplace. We have shared financial and workforce expectations of diversity, equity, and inclusion– Ignore the principles of DEI at your own peril, and you’ll soon be scrambling to survive.