Millennials want business to shift its purpose

Executive summary

Millennials continue to express positive views of business, and their opinions regarding businesses’ motivations and ethics showed stark improvement in this survey. However, much skepticism remains, driven by the majority-held belief that businesses have no ambition beyond profit. Almost nine in 10 (87 percent) believe that “the success of a business should be measured in terms of more than just its financial performance.” This is a widely held belief; only in Germany (22 percent) and South Korea (30 percent) do more than a fifth of Millennials say business success should be measured in purely financial terms.

Millennials continue to hold business in high regard; three-quarters (73 percent) maintain that it has a positive impact upon wider society. This figure is unchanged since 2013 (when we first asked the question) and shows that, despite a downturn in certain local and regional economies, Millennials remain upbeat about businesses’ potential to do good. This positive evaluation is, perhaps naturally, most evident among those in senior positions (83 percent), but also peaks among Millennial parents (81 percent), the “super-connected Millennials” (87 percent), and “active citizens” (76 percent).

These latter two groups represent those making significantly more use of social media or who volunteer, campaign, donate, or more actively engage with social, environmental, or political affairs. As such, it is encouraging that such Millennials are pro-business rather than anti-business.

Millennials believe business to be more ethical and society-focused than a year ago, but remain wary of its motivations

Percentage who said business...

Share the above image here.

Millennials in our survey also believe businesses are behaving in an increasingly responsible manner. On balance, Millennials still believe that businesses focus on their own agendas—but compared to 2015, they are significantly less likely to say this. Meanwhile, they are more likely than last year to agree that businesses “behave in an ethical manner” (58 percent versus 52 percent) and that “their leaders are committed to helping improve society” (57 percent versus 53 percent). There is still much to be done, though, as a majority (54 percent) believe businesses around the world have “no ambition beyond making money.”

Not impressed by the “buzz” around a business

Millennials judge the performance of a business on what it does and how it treats people. For example, among those saying business “means more than a healthy balance sheet,” more than six in 10 would reference the quality of its products and services (63 percent) or levels of employee satisfaction (62 percent). A majority (55 percent) focus on customer loyalty/satisfaction. Innovation and efficiency also rank highly.

Millennials are less impressed by the sheer scale of a business, its age, or the general buzz that surrounds it. Based on a stereotypical view of Millennials, the profile or “positive energy” around a business might be thought of as being highly important to them.

However, at 27 percent, the "buzz" around a business ranks 14th of the 15 attributes measured (and only 13th among those most engaged with social media). Millennials’ views of what businesses should strive to achieve have remained consistent over time. In last year’s study, we compared purpose—what businesses should do—versus impact—what they are doing—and found that Millennials consider businesses to be underperforming by 10 percentage points at improving livelihoods, and underperforming by 12 percentage points on social/environmental benefit. In contrast, there was a perceived overemphasis in areas of profit generation (+10) and wealth creation (+13). As noted later, Millennials very much believe that business success is built on a foundation of long-term sustainability rather than pursuing short-term profit maximization.

For long-term success, put employees first

In previous surveys, Millennials have told us that businesses’ greatest contribution was the financial benefit associated with job creation—but they see this as an outcome rather than a guiding principle of business conduct. So, to better understand their values, we asked Millennials, “What are the most important values a business should follow if it is to have long-term success?”

They responded that businesses should put employees first, and they should have a solid foundation of trust and integrity. Customer care and high-quality, reliable products also ranked relatively high in importance. Attention to the environment and social responsibility were also mentioned by a significant number of Millennials. It’s noteworthy that few (5 percent) of those answering thought profit-focused values would ensure long-term success.

The values that support long-term business success are people treatment, ethics, and customer focus

Share the above image here.

Aligned values, but mismatched purposes

This year’s survey results suggest Millennials don’t see their organizations as reflecting the core values they believe to lie behind long-term success—resulting in a significant gap between where Millennials believe emphasis should be placed and what they perceive to be the case.

There are five key areas where Millennials believe businesses’ sense of purpose should be far greater than is currently the case. These areas include: improving the skills, income, and “satisfaction levels” of employees; creating jobs; and impacting positively on users of their goods and services. Diametrically opposed is the emphasis on profit and business expansion.

Millennials would prioritize the sense of purpose around people rather than growth or profit maximization

Share the above image here.

These sentiments are consistent with the results from last year’s survey. Then, we identified a “leadership gap”—differences between the priorities Millennials would have if they led their organizations and where they believed their senior leadership teams to be focused. As is the case this year, the earlier research told us that Millennials would place far greater emphasis than current leaders on “employee wellbeing” and “employee growth and development.” They would be less focused on “personal income/reward” or “short-term financial goals.”

Millennials who enter the boardroom and those in senior positions have a desire to rebalance business priorities by putting people before profit. Similar to those in more junior roles, members of senior management teams would personally like to see a greater sense of purpose around “being the best possible place to work” and “providing a good income to employees.”

They are more aligned than junior employees regarding “maximizing profit,” “being the best in their organization’s area of activity,” and “expansion”—but this doesn’t detract from the sense that Millennials’ “people-first” values will remain with them as they take on greater levels of responsibility.

Taken together, the preceding findings paint a clear picture of what Millennials believe the foundations of business success to be. This generation evaluates such success in ways that go beyond a focus on financial performance, increasing the focus on activities and behaviors that support long-term sustainability.

The potential for a “profits-first” approach to alienate Millennials is highlighted by its relationship to a range of variables in our dataset. We see, for example, that where Millennials feel their organizations put “financial performance before everything else,” only 20 percent intend to stay for more than five years (compared to the average of 27 percent). Significant differences are also seen with overall levels of employee satisfaction (42 percent in the “profits-first” business versus an average of 53 percent) and value alignment (61 percent versus 70 percent).

As we observed in 2015, Millennials recognize, absolutely, that financial success is one of the elements that characterize a “leading organization,” but on its own is insufficient. Profit is combined with three other of the “Four Ps”: people (employees and in wider society); products; and purpose, which, in combination, provide a platform for long-term success.

Millennials are not naive, though. While they certainly wish to see a greater focus on the needs of the individual—whether employees or those who use their products and services—they simultaneously demonstrate an appreciation of business fundamentals. This generation is acutely aware of the impact of the “Great Recession” and closely attuned to changing economic conditions. They, therefore, recognize the importance of ensuring the long-term success of a business and its ability to support and create jobs.

We see this demonstrated by Millennials’ alignment with their senior leadership teams with respect to the priority given to increasing efficiency, ensuring organizations’ long-term futures, continuous improvement, and a desire to be the best businesses in their specific areas of activity. Again, this reflects last year’s study, where we found Millennials sharing their leaders’ sense of priority over:

• Investing in growth/driving business initiatives;
• Dealing fairly with suppliers;
• Developing new/innovative products and services;
• Making a positive impact on customers; and
• Ensuring the long-term future of the organization

Millennials are, thus, in broad alignment with senior executives on initiatives that support long-term success, suggesting that they value approaches that directly impact individuals via jobs, income, skills, or quality products. As reported earlier, Millennials are not anti-profit and recognize money making as a vital component of business success. They would simply advise against placing too much emphasis on short-term profit maximization.

We further observe Millennials’ appreciation of business fundamentals in data taken from questions on business culture and their recognition of the need for accountability and attention to detail. While Millennials wouldn’t wish to work in a highly regimented and controlled environment, they understand the need for people to be held accountable for their actions and performance. Levels of job satisfaction are as equally high as elsewhere, where this is a feature of an organization’s culture, while loyalty is similarly unaffected by holding people to account.

Where holding people to account is a characteristic of an organization, respondents are just as likely (54 percent) as the survey average (53 percent) to say there are high levels of job satisfaction. It is also the case that holding people to account for their actions does not appear to diminish loyalty. Where such accountability is evident (28 percent), Millennials are just as likely as average (27 percent) to stay with an organization for five years or more.

Being held accountable doesn't reduce loyalty or satisfaction

Share the above image here.