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Preparing U.S. Leadership For The Cultural Demographic Shift

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Hispanics along with African Americans and Asian Pacific Islanders surpassed one third of the U.S. population in 2010.  As their numbers continue to rise, they are on track to reach 54% of the population by 2050 – making them the minority-majority.

I have addressed the issue of the cultural demographic shift in many of my articles (e.g., America's Demographic Shift And 7 Ways Leaders Can Leverage It) and the importance of being culturally intelligent (e.g., The Lack of Cultural Intelligence is Damaging Our Enterprises and Our Economy).

When I do, leaders often ask me:

Where do we start? What is the new conversation that I must start having with leadership to make this a strategic priority for our business and competitive requirements?  How do we prepare for it and “operationalize” it by moving to tangible solutions? 

The days of simply implementing a traditional diversity strategy and calling it a day are over. So is the current employee resource group model with its business case that has historically been mismanaged, misunderstood and not properly defined.  As a result, good intentions have only created more internal employee fragmentation (silos), rather than integration and a deep understanding of the benefits that diverse thought can bring to strengthen business intelligence and know-how.

Efforts to date have proven to be inconsistent and insufficient to say the least. Leveraging the cultural demographic shift calls for a business model and full-scale strategy that fully prepares an organization to leverage today’s reality of a rapidly growing diverse workforce and diverse consumer groups – and the previously unseen opportunities associated with them.

As such, it’s no longer just about “diversity” per se and it’s no longer just a numbers/representation game.  It’s about a tidal demographic shift – with Hispanics at the forefront as the fastest growing minority group – that will impact business strategies and enable growth, innovation and opportunities as companies across all industries strengthen their talent and consumer engagement.

As Marian Salzman, CEO of Havas PR North America – and a fellow Forbes contributor – recently noted, “Some 52 million Americans today identify as Hispanic, and 50,000 of them will turn 18 each month for the next two decades. These millennials have real clout, both for their spending power now and for their ability to influence what comes next. Marketers especially should start paying attention.”

The fact that most businesses have been slow to act on this demographic shift has made a huge opportunity even greater. Those that take the lead now will find themselves with an unprecedented competitive advantage and a highly loyal consumer base – particularly with Hispanics – that others will find difficult if not impossible to dislodge.

But first, change management efforts demand intelligence of the demographic shift at its core. Those that keep it at a distance and do not prepare themselves rightly will remain vulnerable to the continuously changing marketplace and their unique and growing needs. Preparing leadership rightly for the demographic shift means embracing all of its strategic implications, whether you are talking about cultural intelligence, marketing strategies, global competition, or the new requirements for talent acquisition, innovative team building and consumer engagement.

There’s no denying that the demographic shift puts today’s business leaders at a crossroads. They can continue on their current path of least resistance, one full of traps being set as they unknowingly create more tension points with the talent and the consumers on which their businesses depend. Or they can forge a new path by adopting a forward-thinking mindset that allows them to connect with and earn relationships with their diverse workforce and consumer groups.

This is what happened in Houston, where 20% of the citizenry was born outside the United States. Yet this city was the first and most successful in many ways to rebound from the 2008 recession, according to a report on CNN’s Fareed Zakaria GPS: “Where America Works." As Houston Mayor Annise Parker explains, jobs were created and filled by attracting “some of the best and the brightest from around the world.”

So what role does the cultural demographic shift play in your own successful change management strategy? It’s not a wholesale change but a required enhancement layered on top of existing strategies to ensure that the demographic shift plays a key role in all change management requirements.

Where once it was thought that hiring diverse talent was enough, companies now must ask: how do we engage and mobilize our diversity of talent to build strong relationships with these new and diverse consumer groups?  The situation demands that all companies rethink how they communicate both internally and externally, how they operate across departments and functional areas, where they fit in their industry and how they can be leaders in growth, innovation and opportunity.

This is a paradigm shift where it’s becoming less about the business defining the individual and more about the individual defining the business.

An EY article titled, Demographic shifts transform the global workforce, described what this paradigm shift means to business: “as the market turns, skilled employees will want a better understanding of their employment options and a greater say in how work is assigned, assessed and rewarded. The employer will no longer define the workplace; rather, employees’ priorities and preferences will dictate what the future workplace will look like.”

It went on to say that: “Companies will have to craft methods to engage or re-engage the experienced base of talent. Companies that fail to respond to this change and do not succeed in redefining their employee value proposition will fail to attract, retain or develop talent effectively.”

This means that the way a business operates – its processes and systems and best practices – must integrate the growing diverse population and understand how these operations impact them. The demographic shift requires it as it affects business on all fronts – the people that work for companies and are responsible for their brands; the owners of other businesses (vendors/suppliers) that companies work with externally; and the different consumer groups they must serve if they want to grow and compete.

If you know where to look for it, most companies will find that significant intellectual capital already exists in-house – but it’s disconnected when most departments and functional areas operate in silos. Harnessing it means stitching all of that intellectual capital into one strategy that interconnects each functional area together, which in turn will enable the combined intellectual capital of the business to support a business model that can best serve the shift, strengthen each functional area and  produce better outcomes all around.

Similarly, the same intelligence and data that exists out in the marketplace with respect to the cultural demographic shift is adrift because no one is operationalizing it. Few are taking advantage of this intelligence to improve how they lead and manage their functional areas of responsibility.

Instead, it’s business as usual – unknowingly creating tension points, not culturally connecting with the demographic shift, not authentically communicating with these groups or capturing the intelligence embedded within them. Yet it’s this intelligence that businesses need for successful change management – to change everything from the way they operate, manage supply chain activities, design their strategies, brand their products, develop their leadership and their talent pool of future leaders, and enter into external vendor relationships and strategic alliances. In other words, it impacts every aspect of how a business is run.

But if you don’t have the intelligence about the demographic shift and can’t articulate how the unique qualities of say, the Hispanic culture, impacts business, it will be very difficult to get buy-in to the opportunity. This is why so many companies continue to try – and inevitably fail to authentically engage and sustain a two-way dialogue with their employees and consumers/clients to feed the right kind of cultural intelligence into the business model –   instead lumping the demographic shift into their total market strategy.

And this is why companies are so at risk of losing top diverse talent and consumers/clients, especially to emerging small businesses and mid-market companies owned by Hispanics, Asians, African-Americans and other groups that have the innate cultural know-how to more easily foster relationships with their counterparts among the demographic shift. With a value proposition based on intelligence derived from the demographic shift, companies could instead be serving these diverse business owners with a platform to help them build their businesses – partnering with them instead of losing business to them.

Partnership implies coming together as equals; it means the end of assimilation that perceives culture as a barrier to advancement, instead of a natural source of strength when one is free to express their authentic identity. Through the acceptance of our differences and knowing how these differences can solve problems and create new types of opportunities, we will also solve the economic chaos and identity crisis that exists across America.

A new enlightened form of leadership must emerge that rewards individuality and has the wisdom and cultural acumen and insight to most effectively leverage our differences so that together we can support common goals and values.  The 21st century leader knows that assimilation is being replaced with accountability to understand the impact culture plays in strengthening human capital and business strategy.  The right kind of thought-leadership will position brands to leverage diversity of thought as a tangible enabler of opportunities previously unseen.   The cultural demographic shift must be translated into intelligence and resources to create new revenue streams, strengthen an organization’s overall value proposition, and elevate engagement to secure top talent and earn trust and loyalty from emerging consumer groups that will commit to a brand   once the brand commits to them.

Like many opportunities sitting right in front of us previously unseen, this is one that can no longer be ignored. Start preparing your leadership for the demographic shift with a full-scale cultural intelligence strategy with the mindset of the operational and marketplace value and competitive advantage it can bring – and with a change management approach that no longer settles for losing top talent and ignoring new market opportunities.

Follow-me on Twitter @GlennLlopis.