When the pandemic turned the world upside down, it forced us to reckon immediately with three disruptors. I describe them in my new book The Gamechanger’s Playbook: How Oil and Gas Leaders Thrive in an Era of Continuous Disruption.
The COVID-19 pandemic did not create them. The election results will not change them. They took at least several years and in some cases several decades to grow into the existential threat to the oil and gas industry they are today.
Today we look at the first disruptor, familiar to Both True readers: the rise of the millennials.
Both of these things are true:
- The millennial generation leans left more than any previous generation, and – even when conservative — are more concerned about climate change and fossil fuels than older generations.
- Our millennial workforce represents our best hope — our secret weapon — to engage with a skeptical generation of emerging investors and leaders.
You may not yet have noticed, but millennials increasingly dominate the ranks of our employees, investors, regulators, elected officials, and community leaders. While you were busy raising your family and building your career, the millennial generation has become a force to be reckoned with.
The millennial generation — now between 24 and 39 years old — has become the most relevant generation to oil and gas leaders because:
- They dominate the population in raw numbers through at least 2050;
- They are hitting their prime in civic, political, and business leadership;
- They are notably left-leaning politically;
- They are more concerned about both climate and oil and gas than prior generations;
- They are skeptical of businesses; and
- They are the future of our work force.
In the United States, political affiliation is tied to both concern about climate and opposition to oil and gas development. In the U.S. population at large, there are an increasing number of voters who are Democrats or lean Democratic. Millennials now match baby boomers in the number of eligible voters, so it is particularly relevant that millennials are significantly more likely to lean Democratic than previous generations (see figure below).
There are, of course, conservative millennials. But even when conservative, millennials are more likely to express concern over climate change and opposition to oil and gas development.
Further, millennials engage with politics and business differently than previous generations. As a cohort, only 25 percent trust big businesses. Millennials are skeptical of the motives of businesses and do not think highly of their impact on society or their trustworthiness. This lack of trust is widespread:
- Seventy-three percent say political leaders are not having a positive impact on the world;
- Forty-five percent have no trust in political leaders for accurate information; and
- Twenty-seven percent do not trust the media.
Millennials base their relationship with businesses on their societal impact, including ethical actions. According to the Deloitte Global Millennial Survey conducted in 2019, millennials deepen their relationships with a business most often based on “its ethical behavior.” This criterion outweighs other factors such as a company’s political positions, advertising campaigns, or the behavior of its leadership. Interestingly, this relationship moves in both directions. Millennials also break off their relationships based on societal impact.
It matters because:
Under a business-as-usual scenario, most millennials can be expected to oppose oil and gas and be concerned about climate. Millennials increasingly dominate relevant leadership roles; therefore, you can expect your interactions with investors, permitting authorities, elected officials, and community leaders to be increasingly informed by millennial opposition to your project and overall climate concern.
Then layer on millennials’ distrust of big business. (Regardless of your company’s actual size, a millennial stakeholder will certainly consider any oil and gas firm a “big business.”)
Without a novel strategy to engage millennials, your relationships with stakeholders across the board can be expected to deteriorate. According to Gallup, once millennial stakeholders become “disengaged,” they actively become your opponents. Gallup refers to these stakeholders as “brand destroyers.” It does not require a crystal ball to see that our industry’s current trajectory and theirs are headed for increasing conflict. Under business as usual, we will lose unless we change our approach. The brand destroyers increasingly have the numbers on their side.
Don’t make these mistakes:
Recognizing the growing relevance of the millennial generation threatens several areas of conventional oil and gas industry thinking. These are our psychological blocks to seeing the threat for what it is. They form our defensive response to information that is inherently threatening.
This does not mean that conventional thinking doesn’t have its strengths; after all, it is the way we have always thought about things! However, these common objections can inhibit our ability to see the disruption underway clearly. Common objections to recognizing the rise of the millennials include:
- We were all liberal when we were young. They are naïve, and they will grow out of it.
- Millennials do not have the experience to wield paradigm-shifting influence on society writ large.
- They are upending the social order and need to wait their turn.
- We set the rules for engagement, not them.
- They are advancing ahead of their time, which is unfair to the generations that came before them.
- They clearly do not understand how hard it is to meet the expectations of our business and our industry.
These are all excellent conventional critiques of the millennial wave disruption. In fact, I must fight these objections within my own psyche.
I can tell you from personal experience that it is liberating to embrace the overwhelming data that tell us that millennials are coming into relevance and taking on increasingly impactful leadership roles. They are here. They think what they think. They are changing the world around us right now. It does not actually matter at this moment if they are wrong (or right).
We can expect that, as with previous generations, millennials will become more conservative as they age. They will also be burdened by governance, which requires more skill, compromise, and engagement than critiques lobbed from the sidelines. Whether as political or company leaders, they will have to navigate the tradeoffs inherent in executing their responsibilities. And Generation Z will make their lives miserable critiquing how far they have gone off course.
Seize the day: I invite you to embrace the rise of millennials because — to the extent that we think they are right, or wrong, or could look at things differently — our role is to engage, support, and guide the next generation. While that will inevitably eventually reduce my relevance and access to power and influence, I can in the meantime participate in shaping a future that is going to happen with or without me.
Everyone facing the three disruptors is already burdened with all their normal leadership responsibilities plus a pandemic. Finding the path forward today adds to those responsibilities — and requires significant effort. That said, I cannot tell you how much time and energy it frees up to stop fighting the millennial wave and trying to “fix” the oil and gas opposition that comes with it. Embracing this change is empowering.
Millennials are increasingly an important part of our workforces. We can get a two-for-one return on investment by taking the time to understand and engage with this generation: both motivate our work force and transform our relationship with external millennial stakeholders.
Today’s edition of Both True was excerpted and adapted from The Gamechanger’s Playbook. At Adamantine, we would like to work with your team to update your strategy. Reach out to learn more. If this post was forwarded to you, you can subscribe here.