Buttressing Capitalism

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Directors are spending more time discussing and evaluating talent, not just at the top but throughout the company. Once focused exclusively on the top one or two tiers reporting directly to the CEO, boards are now looking further down into the organization, even at entry-level recruiting. Directors in general and human resources committees in specific are taking an in-depth look at policies regarding hiring, training, compensating and career-pathing to ensure they align with both corporate strategy and corporate values. This alignment underpins a company’s diversity, equity and inclusion objectives and initiatives, which over the past few years have risen to the top of the board’s agenda.

Robert H. Rock

As boards examine the talent throughout the organization, they are coming up against the attitudes, values and goals of Millennials (born between 1981 and 1997) and Gen Zers, or Zoomers (born after 1997). These often differ significantly and sometimes fundamentally from those of the Baby Boomer and Gen X generations, which currently occupy most of the top executive positions and the bulk of corporate board seats. Surveys show that many Millennials and a majority of Zoomers distrust and even disdain free-market capitalism. Do American youth pose a threat to American capitalism?

In a recent interview in The Wall Street Journal, social psychologist Jonathan Haidt blames young people, “warped by social media and a victimhood culture … for imposing an organizational culture of fear … which could severely damage American capitalism. When managers are afraid to speak up honestly because they’ll be shamed on Twitter or Slack, then the organization becomes stupid.” Haidt warns that Millennials and Zoomers are limiting and inhibiting debate, which ultimately could “imperil American culture and undermine American capitalism.”
Coupled with their negative view of capitalism, some Millennials and many Zoomers have a different attitude toward work than older generations. Looking for a more favorable work-life balance and having developed a working-from-home complacency, they are not willing to exert themselves in jobs that require long hours and inflexible work schedules. They prioritize well-being over achievement.  
Studies indicate that most Baby Boomers and many Gen Xers believe initiative and hard work lead to fulfillment and happiness, but younger generations are not so sure. “Quiet quitting” and “work your wage” are phrases popularized by young workers that mean working no harder than the job, or its pay, deserves. Some of them don’t see an advantage to working hard or even a stigma for not working at all. There are a half-million fewer individuals in their early 20s working or seeking a job today versus before the pandemic. In the past, such a decline coincided with workers in their early 20s deciding to go back to school; however, 1.5 million fewer students enrolled in college in the fall of 2022 compared with 2019. Despite intense demand for workers, many Zoomers and some Millennials are staying on the sidelines.
The attitudes of upcoming generations present a challenge to America’s competitiveness. Haidt bemoans young people’s lack of ambition. “They’re not going to take chances. They’re not going to swing for the fences. They’re not going to start their own companies.”
What can top management and their boards do to counter upcoming generations’ willingness to limit debate and silence opposing views, their disregard for America’s ethos of hard work and self-reliance and their distrust of America’s system of free-market capitalism? First, executives and directors cannot allow themselves to be cowed into silence but rather should encourage debate throughout the organization, particularly within the boardroom. Second, they can ensure that upcoming generations understand and experience the rigors and requirements as well as the collegiality and vitality of the work environment. Third, they can champion America’s capitalist system, which rewards risk-taking, initiative and innovation, and highlight how it has created opportunity and generated prosperity for a wide range of Americans. 

The recently released Edelman Trust Barometer reveals that business is the sole institution seen as competent and ethical, and, as such, employees expect top management to take the lead on a wide range of societal issues that government is no longer trusted to manage. Edelman concludes that societal leadership is now a core function of business, and “CEOs are expected to take a public stand and take business action on key issues.” There are no issues more key to our free and open society than encouraging robust debate, promoting America’s work ethos and buttressing America’s capitalist system among our younger generations. 

Robert H. Rock is chairman of MLR Media.

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