Separate, Segment Or Integrate: How Businesses Are Handling Gen-Y

by Jon Mertz

A wave of change is coming fast and it is stirring businesses into a frenzy of concern and new plans.

With the thundering headlines and assumptions, you would expect something astonishing, yet the change is just a new generation entering our workplace and marketplace.

Millennials are making their presence known as the first wave is just settling in.

By 2020, Millennials will dominate 50 percent of the workplace and things are just getting started for the largest generation yet.

This generational change has many businesses feeling uneasy. When this happens, some questionable decisions are made or blame is attached to a group or trend.

Two examples surfaced recently.

First, Grey Global Group is segregating Millennials into their own office space.

Second, Whole Foods Market is launching a separate chain of stores to appeal to this new segment.

Both examples raise some concerns, especially the first:

Segregating Millennials

Grey Global Group may be well-intentioned in segregating Millennials, but this just seems wrong.

The objective is to make Millennials feel comfortable. However, the segregated area is called “base camp” and the area is “mentored” by one 44-year old senior vice president.

Does anyone else see a problem with this approach?

Let’s see: An organization takes a group of people who share common characteristics and is sectioning them off into their “Millennial only” base camp. What could possibly go wrong?

Well, a few things:

- By segregating, people are tagged as being different from others and barriers are solidified for many years to come.

- By segregating, sharing experiences between diverse groups of people is all but stopped. Ideas become stale and growth becomes stunted.

- By segregating, a policy of acceptance is thrown away along with the leadership skill of empathy and working with diverse talents, skills and perspectives.

Walls between generations need to be torn down, not built up. Little good can come from this management practice in the short or long run.

Segmenting Millennials

The other example is Whole Foods Market; although many appreciate the Whole Foods experience and the values the company stands for, Millennials have been hit with very tough economic challenges early on.

The economic malaise this generation entered into was one of the worst since the Great Depression.

Given this is true, time to recover financially is vital, and the experience has Millennials being very budget conscious.

Whole Foods has a reputation for higher prices, and is rightfully concerned that the Millennial generation will want to shop elsewhere.

Whole Foods is working to understand this new market segment and is designing a new store to address their requirements.

This is business 101: trying to adapt to new market characteristics. Launching a new chain of stores carries a big risk though.

Segmenting the market is not an inappropriate activity; it is an important business strategy to pursue.

It involves understanding customer interests, requirements and buying characteristics, while aligning business operations for profitable growth.

What can go wrong with segmenting:

- Blaming poor business performance on an emerging generation and their new buying habits.

- Making an excuse for poorly-made products at the expense of a new generation.

- Being inflexible in the primary product lines or storefronts and taking inordinate risks in launching a “special” approach to a new generation.

The faultiness in some of the thinking on Millennials is that they will remain a confined segment. Generations do not stay forever and eventually, Millennials will be the dominant generation.

Within the Millennial generation, there are likely many segments, just as there are with Generation-X, Boomers and the next one up: Generation-Z.

While market segmentation is an appropriate activity, just be sure to not use Millennials as a delay tactic from what needs to change with your core business or use a new generation as an excuse for bad products or services.

Segment the market to deliver exceptional products and services in the right way, at the right times, at the right price and profit points.

Integrating Millennials

The best business strategy is to integrate Millennials into your workplace and marketplace strategies. Segregation is never a good idea.

Segmentation can accelerate growth if done right and for the right reasons. Integration will provide the longest term value and growth opportunity.

Millennials are only special in that they are the next generation of leaders, buyers and citizens. Just as generations before them, unique characteristics will define them.

Societal, political, economic and technological shifts will always drive certain changes with each generation.

The smart actions businesses take will determine how they navigate generational changes.

What an integration strategy means is:

- For the workplace, a diverse culture builds strength in what can be learned from different perspectives and creates an environment of respect, trust and empathy. In diversity of generations, there is great empowerment and engagement.

- For the marketplace, understanding generational trends is essential to grow by adapting appropriately and profitably. In segmenting, review common characteristics that cut across generations and ensure a broader perspective is taken in getting the approach right.

Millennials are here to stay, as are the other generations. Fencing off differences will not produce bountiful results.

Slicing markets by generation alone may not be best growth path forward.

Taking the step to embrace the change, engage the change and leverage the change will create a better work culture and a more profitable business.