Be aware of millennials needs and capture the opportunity
Does your company understand what millenials, the generation born after 1984, really expects from you? Do you understand and capture the opportunities that arise from providing the right products and services to this important customer group?
- Millennials have very different requirements regarding sustainability: They represent part of current consumers and can be potential future employees for companies. Understanding and responding to millennials’ expectations will contribute to competitiveness of companies going forward.
- The main expectation towards a company’s sustainability effort, is to be transparent and to show integrity in all interactions with society.
- Millennials understand that companies will only provide sustainable products, if these products have an appropriate cost position and are backed up by real customer demand
As part of the fall conference of the international student network ‘sneep’ at the University of Kassel in Germany, I had the pleasure of presenting the concept of sustainable value creation and its building blocks. The theme of the conference was centered around the question ‘How to embed sustainability in the value chain?‘. sneep is a pan-European student network focused on business ethics, which has more than 200 members and operates in 30 local chapter groups across Europe.The conference team brought together experts from companies, media, consultants and approx. 100 students from the sneep network.
The keynote speech was delivered by Professor Dr. Stefan Seuring, one of Germanys most renowned academics in the field of sustainable value chain management. He confirmed that the importance of considering sustainability in the value chain is increasing. Despite the complexity of all the aspects involved, there is a clear trend that sustainable value chain management has moved from a context topic in companies to being a core business issue.
In subsequent speeches Wolfram Bernhardt from the philosophical business magazine Agora42 asked the question ‘How much good can there be in the evil practices of businesses?’. Siemens Sustainable Procurement Expert Thomas Kentsch confirmed that sustainability aspects are already part of the supplier qualification process and a prerequisite of doing business with Siemens.
In my speech I described why sustainability needs to be driven from ‘inside-out’ of an organization and why the core business is the biggest lever for change when it comes to sustainability.
A number of points raised the audiences’ interest. The themes centered on a number of topics, which were then discussed in more detail during the networking breaks:
- While chasing growth ‘as we know it’ still drives the daily way of business in many companies, there is growing recognition that maximizing profit at any cost is fundamentally unsustainable.
- Sustainable value chain management with clear focus on creating shared value is seen as the opportunity to combine business objectives and value creation for society at the same time.
- To enable sustainable value chain management, companies should seek to combine established improvement tools in product development, supply chain management and sustainability. The art of blending existing approaches with new thinking will provide the basis for new business models.
- Recent sustainability efforts of companies are appreciated, but it is important to go beyond the label to really understand how it is implemented in products, supply chains and communications.
- Sustainable value chain management as the backbone to create shared value is not a cost play. It is rather an opportunity to differentiate. Demonstrating the willingness to move from quantitative growth to qualitative growth will be a requirement to retain and attract customers.
Student Workshop Results: Expectations of millennials are clear and companies need to be ready to respond
In the afternoon of the event, I had the chance to work with 18 students in a workshop session. The objective was to discuss what the students perceive to be the biggest expectations and opportunities of sustainability. Based on the shared.value.chain reference framework, students were asked to think about expectations and opportunities that arise from sustainability in the value chain. They were told to consider two perspectives: First, from their own point of view as customers and second, from the perspective if they would manager or own a company owner.
The students developed the answers themselves and then discussed the most important ones in the group. The opportunities and expectations were identified as follow:
“From my perspective as customer, I see opportunities…”
- …to be more happy with less products
- …to have financial advantages, due to longer durability of products
- …to know that the purchased product does no harm
“From my perspective as customer, I have the following expectations on sustainability in the core business”
- Transparency is most important. Companies need to build sustainable products and operate sustainable value chains
- Products shall be made 100% of sustainable components and products need to appeal to emotional values
- The sustainability claims of companies shall be audited by an independent party
“Taking a perspective as manager of a company, I see the opportunities…”
- …to increase a company’s credibility and customer trust
- …to increase a company’s reputation/branding
- …to increase internal satisfaction and motivation based on honest, ethical and authentic management practices
“Taking a perspective as manager of a company, sustainability in the core business needs to meet the following expectations”
- Ability to create sustainable products with an appropriate cost position
- There needs to be real demand for sustainable products and customers need to be able to buy the products
- The contribution of sustainable products and supply chains need to be measurable
Summary: Companies need to understand how millennials think. They will drive the sustainability agenda both from a customer perspective as well as future employees and decision makers. Getting ready to fulfill their expectations is an important element for competitiveness in the future.
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