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Generation Y and ROI Profits aren’t the priority for emerging leaders. They will deliver better returns as a result, writes Adam Kingl

In August 2019, Business Roundtable, an association of chief executives of leading US companies, issued a statement on the purpose of a corporation. Signed by 181 chief executives, including those of Apple and JPMorgan Chase, it argued that companies should no longer advance only the interests of shareholders. They must do more: invest in employees, protect the environment, deal fairly with their suppliers, and deliver value to customers and communities. This view is increasingly common. It reflects growing distress in the corporate world amidst global discontent over income inequality, harmful products, climate change, and poor work-life balance. Business as usual is no longer acceptable. Today’s circumstances may look unique, but capitalism has faced challenging times before and has a terrific track record of successfully reinventing itself over the centuries. The next reinvention is now set to be facilitated by Generation Y, or Millennials: and at the heart of this change is Gen Y’s attitude to ROI and the pursuit of financial returns at all costs.

Gen Y’s priorities

Gen Y – those born between 1982 and 2004 – composes fully half of the European and American workforces today and will make up 75% of the global workforce by 2025. Organizations now have a critical mass of employees from this generation, who almost invariably demand that their organizations shift focus from shareholder to stakeholder capitalism, taking more account of customers, employees, community, and the planet. To test this hypothesis, over the course of five years, I surveyed Gen Ys nominated by their employers as “high potentials”. I asked what they would focus on if they were the chief executives of their organizations (see Figure 1). The results make clear how little import ‘financial worth’ bears for this Gen Y population. Dialogue Q1 2020

But does this mean that the Gen Y chief executive would not want to earn a profit? Absolutely not: these emerging leaders know that business needs profits to survive and thrive. It is, though, a reaction against the dominance of financial analysts’ opinions, which shape the approach of the investment community with neat ratios and metrics for assessing company health. Chasing ratio optimization is a shortterm game. Before one knows it, the purpose of the business is tacitly or implicitly about pleasing analysts. Long-term objectives take a back seat in decision-making. If the chief executive or chief financial officer starts adopting someone else’s KPIs (key performance indicators), using analysts’ ratios as their primary measures of performance, they risk creating drift from the organization’s mission. In the long-term, this can make sustained success far harder to achieve. Unfortunately, that is exactly what has happened on a massive scale. But we are now on the threshold of stakeholder capitalism. Gen Ys have their priorities right, focusing on renewing and strengthening their purpose in everyday activities. Gen Y is leading the way in reinventing capitalism in a way that serves society – and ultimately, their companies – better.

Purpose-driven performance

As one example, take a look at Facebook, founded and led by one of the first Gen Y Fortune 500 chief executives, Mark Zuckerberg. Evidently, Facebook is far from perfect: but its early history as a publicly traded company, and the way it catalysed investor confidence, is a thoughtprovoking case study. In his letter to prospective shareholders as part of the company’s initial public offer in 2012, Zuckerberg did not emphasize revenue and profit forecasts. Instead, he explained Facebook’s purpose and simply stated that if you believe in that goal, then you might

The rise of Gen Y marks a critical inflection point in the history of business

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