MHI Solutions Improving Supply Chain Performance
Here are five strategies to help employees of different generations, races, ethnicities, genders and more work together successfully.
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No matter how you slice it, the supply chain workforce of the future will be vastly more diverse than ever before. Although supply chains have traditionally been white male‑dominated, the status quo is quickly changing due to multiple factors. Among them are the growing racial and ethnic diversity among successively younger generations, the increasing number of women entering the field and the larger number of older people remaining in the workforce longer.
Another reason? Supply chains have shown an increasing dedication to diversity, equity and inclusion (DEI) efforts, said Dana Stiffler, distinguished VP of research at Gartner.
She found that, in 2023, 47% of supply chain organizations had formal DEI goals—a 50% increase over 2022. Additionally, those organizations expanded their focus beyond gender and race to include strategies to cultivate other diversity factors, including age, nationality, physical ability, cognitive ability and LGBTQ+. The survey also found hiring increases of up to four times more employees of races and ethnicities historically underrepresented in the field.
Stiffler attributed supply chains’ striking expansion of DEI initiatives and improved diversity within supply chains to ongoing labor market challenges.
“Leaders need to cast as wide a net as possible in order to attract the talent they need to run a high‑performing, competitive supply chain,” she explained, noting companies that prioritize diversity and inclusion have been shown to outperform those that don’t.
According to McKinsey’s most recent Diversity Matters report, companies committed to diversity are 39% more likely to outperform those that are not. Organizations staffed 30% or more by women are much more likely to achieve higher financial performance than those with fewer than 30%. Companies with the highest levels of ethnic diversity have an average 27% financial advantage over others. Conversely, organizations with limited gender and ethnic diversity are 66% less likely to outperform financially on average.
Numbers like that are just one reason why workforce diversity issues are already top‑of‑mind for CEOs, said Stiffler, who pointed to the 2023 Gartner CEO and Senior Business Executive Survey.
“After technology‑related changes, CEOs were most concerned about workforce issues. Of those, generational workplace diversity was among the most significant changes facing their businesses in the next three years,” she observed.
That applies to supply chains in particular, added Stiffler, who noted that four distinct generations currently work in today’s supply chains. Gartner breaks it out as follows:
- 14% Baby Boomers (1945‑1964)
- 34% Generation X (1965‑1979)
- 39% Millennials (1980‑1994)
- 14% Generation Z (1995‑2010)
“As Baby Boomers continue to retire in greater numbers, companies will endure a loss of formal and informal knowledge,” she continued. “At the same time, the younger the generation, the fewer average number of years an employee stays with an employer. Baby Boomers’ average job tenure is 10.1 years; Gen Z’s average job tenure is two years.”
That fact is a source of great consternation among Boomers and Gen Xers, many of whom rose to their current positions of leadership the “old school” way—putting in the face time, working long hours and rarely questioning the status quo. As new generations have entered the workforce, however, preferred work styles have evolved. Gen X, particularly since COVID‑19, has gravitated toward more flexible hours that allow them to balance work and personal lives as they care for both children and aging parents. Millennials and Gen Z want choices about their working hours and locations. That’s just one generational difference among many.
“According to our research, 81% of supply chain employees surveyed said communication style is the biggest difference between generations,” Stiffler said. “Baby Boomers prefer face‑to‑face, email or voice calls. Gen X prefers a mix of those, along with some texting. Millennials and Gen Z prefer Internet‑based and mobile communications, including social media.”
Each generation also tends to stereotype the others. Older workers believe younger workers to be more entitled, less loyal and not as professional. Younger workers consider their older counterparts to be too set in their ways and significantly less skilled with technology (for more insights into how the different generations in supply chain view artificial intelligence, see the sidebar on page 50).
Research from AARP about the different generations’ perceptions of the others backs that up, finding:
- Intergenerational conflict was reported by 60% of employees.
- The abilities of younger colleagues are dismissed by 70% of older employees.
- Older employees’ abilities are dismissed by 50% of their younger colleagues.
Each generation also feels varying degrees of ease about working and socializing with people of dissimilar backgrounds. Stiffler noted that older generations, while open to other perspectives, remain true to their roots. With supply chains’ expanded focus on attracting and hiring an increasingly younger and more diverse workforce as part of DEI initiatives, such different generational priorities and perceptions could hinder the ability of diverse teams to successfully work together, make decisions and accomplish tasks.
That is unless companies find a way to help foster greater understanding and communication among their employees as part of their workforce and business strategies. Fortunately, there are several ways supply chain organizations can address these potential workplace diversity conflicts to improve internal collaboration and performance. Here are five such suggestions.
1. Leverage Tools that Foster Connections
Equipping employees with the tools to help them recognize, acknowledge and embrace differences is one of the most critical things a company can do, said Annette Danek‑Akey, chief supply chain officer at Barnes & Noble.
“As a leader, in order to have understanding, you need to intentionally set aside time to focus on team building,” she explained. “Bring in an expert on generational differences, for example. Assign one of the personality assessment surveys—DISC, Enneagram, Myers‑Briggs—and make it a priority for people to discuss their differences and figure out how to have measured, respectful conversations as they work with each other.”
These efforts help foster connections among diverse teams. It also gives employees the guideposts they need to navigate interpersonal misunderstandings themselves, rather than relying on the boss to mediate, added Danek‑Akey.
Regardless of personal or generational differences, everyone craves human connection, agreed Mercedes Barragan, global inclusion and diversity manager at MHI member Dematic, a member of KION Group. She believes it’s important to give employees permission to build relationships and get to know each other on a personal level outside of their working roles.
“During COVID‑19, there were colleagues I worked with virtually for three years before I ever met them in person,” she recalled. “Yet, I felt like I already knew them because we took the time outside of meetings to get to know each other and discover similar interests outside of the office. When we home in on the things that make us human beings, then the other differences start to become less important.”
Employee Resource Groups (ERGs) are another way organizations are helping staffers come together, said Stephanie Thomas, Ph.D., associate professor of practice in the J.B. Hunt Transport Department of Supply Chain Management at the University of Arkansas. Thomas is also executive director of Women Impacting Supply Chain Excellence (WISE), an organization that promotes inclusion in supply chain management.
“ERGs give allies and advocates with certain shared interests an opportunity to come together and create connections and bonds within the organization,” she stated. “Of course, these groups can cover serious topics, but they also host celebrations and activities that allow employees to share experiences and understanding.”
ERGs are a perfect vehicle for building community within organizations, added Barragan, because they focus on creating human touchpoints. “Even more important, ERGs can help be the catalyst to drive culture change in your organization. They’re your employees who are the most engaged and care the most about the success of people in your organization,” she noted.
2. Empower Teams to Define Collaboration Practices
Another important step to helping diverse teams work together more effectively is to have members come to a consensus about preferred interactions, advised Stiffler.
“Encourage teams to talk about creating a charter for their service level among themselves. Things like, what are the hours of the day that we all want to be available online or in person for collaboration, and what are the hours we set aside for focus time,” she explained. “This is also a way to address the different communication styles favored by the different generations in the workplace, such as when a text message is acceptable versus an email or a phone call.”
Getting a team to make these decisions together—instead of a manager or supervisor dictating these standards—automatically gets better buy‑in. It also gives employees experience in meeting each other halfway.
For frontline employees, Stiffler recommended ensuring that employees are involved in decision‑making that affects them.
“If an operation is implementing a technology, or shaping a best practice, or outlining another measure to improve the employee experience, make sure those associates have a voice,” she said. “Whether that’s in standing meetings or through employee groups, work councils, unions or other representation to improve understanding and buy‑in.”
3. Get Comfortable with More Transparency
There will, of course, always be decisions made solely by leaders. But younger generations want transparency, involvement and purpose. That means they’re going to want to know “Why?” advised Danek‑Akey.
“Millennials and Gen Z have been taught to stick up for themselves and to ask a lot of questions. I believe they’ve learned how to be much better systems thinkers in general than previous generations,” she said. “They’re asking ‘why?’ because they want to learn and understand what the tradeoffs are. They also want to be involved in the decision‑making process.”
Another reason the younger generations—particularly Gen Z—ask so many questions compared to older generations, added Thomas, is that many of them are intentionally choosing to study supply chain management.
“As recently as a few years before COVID‑19, hardly anyone enrolled in college declared a supply chain management major,” she recalled. “For decades people just kind of fell into the field and learned supply chain management on the job. Now, thanks to COVID‑19 putting so much focus on supply chains, students know what it is and they’re seeking it out.”
Not only are there more supply chain scholars learning the field in the classroom, but they’re also picking up a lot of professional experience through co‑ops and internships.
“Some of these students are graduating having completed as many as five internships and they’re working on projects that are highly relevant to the field,” Thomas continued. “That means they bring a tremendous amount of knowledge about how the industry works, the available technologies, data analytics and more to their first jobs out of college. Plus, they’re driven to make an impact and want to do work with a purpose. So, they’re going to ask ‘why?’ a lot.”
For older generations, this might be unsettling, noted Danek‑Akey. She pointed out that in the old school “command and control” leadership approach, such questioning might be seen as insubordination. She suggested leaders instead reframe the queries as genuine interest.
“It’s a mindset change,” explained Danek‑Akey. “That means whenever a leader works on something, they need to be sure they know the why so they can explain the background, the data and how they arrived at a decision. I’ve personally experienced this myself, leading teams of younger individuals, and it’s made me smarter. I’ve come to think of every decision as an opportunity for overarching process improvement because I now ask myself ‘Why?’”