Paper & Blocks

“When you’re young, every rule is illegitimate until proven otherwise. It is precisely because [youth] have so little to lose from the way things are that young people will continue to be the inexhaustibly neophilic motor of culture.”

I love this quote from Derek Thompson’s book Hit Makers because it rings so true.

Young people have nothing to lose, because they have no stake in the way things are today. They can be bold and take risks in everything from the clothes they wear to the technology they adopt. They can break the rules because they had no hand in establishing them in the first place. That’s why the group is first to adopt new technology (from TikTok to crypto), first to pick up on social trends (from sustainability to diversity & inclusion) and first to dictate what new media (from music to movies) becomes popular.

On the other hand, those a little older, who have grown up with and built the system as it exists today, have created their successes in the way things are. The current set of societal norms serves them well because they contributed to shaping them. Yesterday’s music becomes today’s classics, long-ago start-ups become today’s stable corporations, and in-person services like getting a mortgage or filling a prescription still suffice despite some emerging digital alternatives. As a consequence, there is less incentive to want to embrace change (and a real urge to ‘shake a fist’ at anything that threatens the current state).

It almost seems paradoxical then, that society places a lot of value on youth. From the success of brands like Forever 21 to the fact that waaaay more people than you might expect have used Botox in the last six months, examples are everywhere you look.

Why? Well, because of their willingness and ability to quickly embrace change, young people are often trailblazers in adopting and popularizing new cultural trends.

Youth leads culture in a cycle that is never ending:

• Young people tend toward neophilia
• They become the trailblazers popularizing new cultural trends
• Advertisers and consumer-driven industries recognize this and cater their messaging toward the younger demographic
• Tech and media cater to the advertisers
• Which creates an idealized image of youthfulness in our culture
• Leading older generations to follow the trendsetters
• Solidifying the trend as part of ‘established’ culture
• And since it is no longer novel, the youth move on to the next ‘new thing’ and start the cycle all over again

If you want to understand where the world is going, look to younger generations for clues. They provide signal through the rest of the noise in the market. This should be the primary reason why generational analysis is a staple on the shelves of business strategists everywhere.

This differs a bit from the typical theory behind gen

But instead, it diverges from the common application of Generational Analysis, which is typically done on the basis of assigning broad-based characteristics to individual generational cohorts and using that blanket to describe the entire group: Gen Zer’s are socially conscious and entrepreneurial, Millennials are tech-savvy and value work-life balance, Gen Xer’s are skeptics who value independence, etc. These blanket ‘traits’ are then used to aim everything from product development to marketing messaging at each cohort. Many strategy consulting clients I’ve worked with in the past have had a ‘Millennial strategy’ at some point or another and the results have largely been underwhelming.

That’s not to say that this format of generational analysis is without merit. The theory behind it makes a lot of sense, which goes something like this:

People are significantly influenced by the socio-historical environment around them, and on the basis of their shared experience, form social cohorts with commonly held traits. If you can identify those traits, then you can correctly cater to that generational audience.

But does this hold true? I know plenty of Gen Xer’s who aren’t skeptics, many Millennials who are not tech-savvy, and many Gen Zer’s who think the corporate 9:00 to 5:00 lifestyle is perfectly suitable to their preferences. Individual variability is one of the primary shortcomings in generational analysis.

Blanket traits are blunt instruments. They can tell you how a generational cohort might ‘skew’ relative to others, but they can’t be fully descriptive of the entire group.

That’s because the trait is not attached to the people themselves, but rather to the two component factors that influence them: their stage in life and the environment around them.

Stage of life has a major influence over the set of ‘common experiences’ a cohort goes through, so to does the environment in which each stage takes place. Is Gen Z more entrepreneurial than other generations… or are they simply at a stage in life where they can take more career risk than others in an internet-driven environment where the costs of starting a business or freelancing have been lowered to almost zero. Is the trait attributable to the generation itself, the environment, or their stage in the household lifecycle? The first factor is likely the sum of the parts of the next two, and for that reason, individual variability can shine through in each cohort. For example:

• Because stage of life is an important factor, newly single people in Generation X can mirror many of the preferences of Generation Z.
• Because the environment around us is an important factor, a Baby Boomer in the advertising industry may be more aware of global issues and more socially conscious than a Gen Zer who is not.

Traditional generational analysis lacks the first principles thinking about what is driving the formation of traits and behaviors associated with each cohort. The component parts are what are far more impactful when using the generational lens to spot business opportunities.

Stage of life plays a particularly important role. Given general human tendencies toward safety and stability, most people go through two stages in life:

• a risk-taking stage (usually when they are young), and;
• a stability stage (usually when they are more mature)

The preferences a person holds in the stability stage are often formed and crystallized in the risk-taking stage. A Baby Boomer who reveled in rock-and-roll in their teenage years or developed a left-leaning political affiliation during that time likely still listens to that music today and votes for the same party.

If you look at the population as a set of concentric circles, older generations are the crystallized core (where most are in the stability stage with set preferences) and youth represent the expanding edge (where most are in the risk-taking stage and still forming their preferences).

This is precisely the reason why there is so much attention placed on younger generations: they are at the risk-taking stage of life in the current environment. They are best able to surface the next set of trends that will eventually get caught in the youth-led-culture-cycle.

That cycle is important because it is one of the few things that is inertia-breaking enough to crash through the crystallized core to help today’s trend slowly become mainstream over time.

Young people set the trends and the youth-led culture cycle brings it to older generations.

So, what signals can we take from today’s youth?

Well, endless reports about Generation Z seem to point at several common traits:

• Digitally-native: Adept at using technology for communication, information gathering, and entertainment.
• Globally-aware: They are more likely to engage with international issues like sustainability, advocate for social justice, and seek solutions to global challenges.
• Diverse and inclusive: Willing and able to embrace and celebrate differences in ethnicity, gender, and sexual orientation which also tends to be reflected in their social attitudes.
• Value authenticity and transparency: They are very proficient at spotting marketing gimmicks and have an appreciation for genuine, transparent content.

To reiterate, these are signals, not religion. They shine a light on where the world is likely going.

It is also easy to see how the youth-led-culture-cycle can break through the crystalized core by examining these traits in the context of other generations. For example, perhaps Baby Boomers are not best described as digitally-native, but are they more digitally-savvy than they were ten years ago? Absolutely! Perhaps Baby Boomers as a group are not as inclusive as their Gen Z counterparts, but is that generation as a whole more willing to embrace other ethnicities and backgrounds than before? Of course!

Generational analysis has a lot of shortcomings that make it an awkward tool to use in making strategic decisions:

• Individual variability: Not everyone within a specific age group shares the same attitudes, values, or preferences.
• Static nature: Generational behaviors are not fixed and can evolve over time.
• Lack of nuance: Applying generational stereotypes without considering cultural nuances can lead to misunderstandings and ineffective decision-making.

Despite these shortcomings, younger generations will remain our best signal for figuring out what the world will look like in the years ahead. They are a beacon of the future, which is why it is imperative to understand Generation Z… even if your business does not cater to the segment.