The United States as we know it is changing: Roughly 10,000 Americans are turning age 65 daily; the southern states represent over half of the nation's population growth; fertility rates are dropping, especially among white women; and people of color make up the fastest growing demographic group, states James H. Johnson Jr., a demographic expert and professor of strategy and entrepreneurship at the University of North Carolina at Chapel Hill. Johnson gleaned that information mostly from the U.S. Census Bureau's American Community Survey and Current Population Survey.
"The disruption is very predictable," he said. "But you're going to lose your shirt in the marketplace if you don't understand how disruptive demographic changes are transforming your business."
Johnson will address the topic "Leading & Managing in an Era of Disruptive Demographics and 'Certain-Uncertainty,'" on June 7, at the AICPA's Not-For-Profit Industry Conference. This subject is vital, he says, because organizations need to address these population shifts and adapt accordingly by becoming more equitable and inclusive, both internally and externally. "The winners will be the ones who are able to understand the nature of these changes," he said. He added that it will be helpful to develop models of engagement with a more diverse population.
Johnson outlines three major demographic swings: the overwhelming population growth in the southern states — namely, Texas, Florida, Georgia, North Carolina, and Virginia; the "browning and graying of America," due to the transformation of race/ethnic composition and complexion, and the increased life expectancy for Baby Boomers and pre-Boomers while fertility rates decrease; and more school-age children living with their grandparents, many of whom are full-time caregivers, often due to family difficulties.
These demographic makeovers need to be recognized by higher-education institutions —since the university population is also shifting — and by company leaders who must ensure that their employee base reflects the demographic changes, Johnson said.
"First of all, leaders and managers don't always look like the demographic shift, so they may need to make their upper levels more diverse; otherwise, people might not buy their products and services because of questions on equity and inclusion," he said.
Many large accounting firms, for instance, have developed road maps for diversity and inclusion in their talent pool. "If you need CPA talent, you can't say 'business as usual' when the world around you is changing," he added.
Public- and private-sector leaders also need to be competent in several areas, Johnson advised:
- First, he said, they must be able to leverage "big data analytics" to monitor the demographic changes occurring, particularly as it relates to recruiting talent.
- Leaders must also adopt an "entrepreneurial mindset," with the ability to think creatively about how to respond to any crisis that may occur, whether it be COVID-19, the nationwide unrest, or even adverse weather, he said.
- Leaders must also possess "contextual intelligence," an "acute sensitivity to the social, political, technological, economic, and demographic drivers of change that will likely define the future," Johnson co-wrote in a white paper last year.
- In addition, he stated, leaders must "be able to move from the streets to the suites without missing a beat," adjusting how they communicate based on the location and audience. "Your mode of communication will vary depending on where you are, so that 'cultural elasticity' means you understand the codes of doing business in those different settings," Johnson said.
- Leaders must also intentionally expand their "knowledge networks" outside their comfort zones and not just collaborate or mingle with people who mirror themselves. "If you are only hanging around with people who are like you, no new learning goes on," he noted. Johnson suggests joining social, economic, and ethnically diverse networks.
- Finally, he pushes leaders "to be agile and flexible," to reinvent themselves and learn new ways of doing things, and to be "courageous" listeners and communicators by appreciating and being empathetic to alternative views.
"The new normal is certain uncertainty," Johnson summarized. "What we talk about today may be totally different tomorrow."
Johnson's presentation on this timely topic is an overview of his own life and learning. He grew up on a tobacco farm outside of Greenville, N.C., at a time when segregation was very real, and where the Black and white parts of town were divided by railroad tracks, reported UNC's Kenan-Flagler Business School on its website.
But Johnson's parents and grandmother were instrumental in encouraging him to succeed. He co-founded the Global Scholars Academy, a K-12 school in Durham, N.C., for disadvantaged youth. Johnson is also the director of the Kenan-Flagler Business School's Urban Investment Strategies Center, which focuses on disruptive demographics and economic trends and how to address these changes. He's now a noted speaker on this subject, and his activities and focus are his way of paying it forward.
—Cheryl Meyer is a freelance writer based in California. To comment on this article or to suggest an idea for another article, contact Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com), the JofA's editorial director.