When
the Boomers Leave, Will Your
Company Have the Leaders it Needs?
At
least 50% of the executives in the United States
will be eligible to retire in the next 5 years.
Will your organization be prepared?
A
major demographic change is on the horizon, and it portends
a leadership crisis for many organizations. As highly
trained and highly placed baby boomers start retiring
in droves, they will leave behind a yawning leadership
gap. According to Wood Dale, Illinois based RHR International,
a human resources consulting firm, at least 50% of executives
in the United States will be eligible to retire in just
the next five years. Japan, Australia, and parts of Europe
will be even harder hit, says Tamara Erickson, coauthor
of Workforce Crisis: How to Beat the Coming Shortage
of Skills and Talent (Harvard Business School Press,
2006.)
This
massive departure would not pose a problem if
there were adequate numbers of younger managers prepared
to step into the departing executives' shoes when the
time comes. But in most companies, there won't be.
"The
baby boom generation is so large that boomers hold not
only most of the senior leadership roles in companies
today but also many of the positions two, three, four
levels down," says Erickson, president of Watertown,
Massachusetts based research and education group, The
Concours Institute. What's more, declining birthrates
in industrialized countries mean that succeeding generations
will be much smaller. All this adds up to a serious deficit
of seasoned managerial talent in the years ahead.
"The
attention this issue is getting today in the senior ranks
is huge," says Lars Dalgaard, founder and CEO of
the talent-management software firm SuccessFactors (San
Mateo, California.). "Companies have realized they
have to take action now to avoid a future where half the
desks in the executive suite go empty."
So
what should companies do? "Accelerate their leadership
development efforts, and fast," says Erickson. "Companies
need to condense and speed up what traditionally has been
a fairly lengthy trial-by-fire process." In this
article, experts share their advice for providing training
that is both highly effective and efficient.
Whether you're a senior leader on the lookout for ways
to bring your most promising subordinates forward or an
HR professional charged with developing a deep talent
pipeline, taking the following steps will help you ensure
that your company has the leadership talent it needs in
the years ahead.
Tell
Them They're High Potentials
Should
high potentials know they're being eyed as executive material?
Absolutely.
For
one thing, it will help them see the value in a lateral
move designed to develop a particular competency. "In
many cases," says Cara Capretta Raymond,vice president
of strategy and intellectual property at executive recruiting
company Korn/Ferry International (Los Angeles), "good
developmental assignments will be horizontal and 'zigzag'
moves, rather than traditional vertical promotions."
For
another, if you don't say anything, you stand a greater
chance of losing them to a competitor willing to be more
forthright.
At
the same time, caution them against taking their status
for granted. "Just because they're high potential
today doesn't mean they'll be so tomorrow," says
Scott Cohen, principal in the Boston office of Capital
H Group (Chicago), a human capital consulting firm. "They
should know this isn't a guarantee." The goal is
to make them feel confident as they tackle new challenges,
not cocky.
Stretch
Them in Multiple Directions
While
sending talented young managers through executive MBA
programs or giving them three- to five-year assignments
in other countries can provide a wealth of learning, it's
learning that comes at a significant time cost. A quicker,
more targeted approach is to give them a series of shorter
stretch assignments that round out their skills.
Raymond
cites a manager in a financial services company who did
well with direct reports but was less effective working
with peers. She was given a one-year staff position where,
says Raymond, "she had to learn to influence and
negotiate with her peers across boundaries in the company."
The
stretch assignment need not be a completely new role;
instead, it could be a new assignment that complements
the high potential's regular duties. For instance, a talented
manager who has mostly operations experience might be
given duties that require more client contact, thus strengthening
his external perspective on the organization.
Multiple-year
assignments abroad have long been a requisite part of
many companies' executive development programs. But much
shorter foreign assignments can provide substantial benefits.
A large insurance company Erickson works with sends its
high potentials on three-month assignments to help set
up new offices outside the United States and train the
local team in the company's operating processes and business
culture.
Please
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Reprinted
from Harvard Management Update |
Note
from Kevin
 Greetings!
Many
thanks to Wayne Kehl, our guest author, who prepared the
introduction for this month's article.
Since
September 2, 1945, the last  day
of World War II, North American industrial
and business growth has been advancing by leaps and bounds.
At this time in history, our standard of living and general
levels of wealth are virtually unequalled in most other
countries.
That
growth has been led by the children of the survivors of
the Great War. Those "Baby Boomers" were born
in record numbers throughout the forties, fifties and
early sixties after our soldiers returned from the battlefields
and began to rebuild their countries. Boomers, usually
of multiple sibling families, have shown ingenuity, invention,
determination and business expertise greater than any
other civilization in the history of the world. Unfortunately,
we are now facing the potentially grim reality of saying
good bye to those industry leaders as they move gracefully
into a well deserved life of retirement. They created
the wealth and lifestyle that we now enjoy, and it is
their turn to relax and savor their legacy.
As
much as we should honor the great work of the Boomers,
we must also accept that their departure will leave us
with a serious shortfall of talent. If we intend to keep
our business engines firing on all cylinders, we need
to bring in fresh new talent NOW! Companies that want
to remain on the leading edge in their field must identify,
recruit, and hire "High Potential Future Leaders"
immediately so they are ready to take over when the exodus
of Boomers is at its peak. Do not be left behind! Make
no mistake…those companies that do not begin the
process right away will end up at the back of the pack
while progressive and proactive companies will take control
of their respective industries.
"How
do I find those High Potential Future Leaders?" you
ask. They might be working for you right now, and you
don’t even know it. Widely accepted business wisdom
says that promotion from within is the best path to follow.
However, that is not always possible.
"So
if I have to hire from the outside because I simply do
not have any potential candidates on my staff currently,
how do I know that my candidates are High Potential Future
Leaders?" you wonder.
In
both cases, we can help. You need to set up an aggressive
program to identify and nurture future leaders within
your company, and you need to actively recruit leaders
from the outside at all times. The strongest companies
in the world are always on the lookout for great people
to lead their companies. At LeadersWay, we help you put
together a plan to benchmark the leadership positions
in your company and then develop a program to help you
find candidates to fill them. Once we have the candidates
identified, we help you assess them with our TriMetrix
Personal Plus Report. This report provides all
the information you need to make an informed, accurate
decision about the ability of your candidate to fill the
requirements of the job and also gives you the keys to
know if candidates have the "horsepower" to
become a High Performance Future Leader.
Don’t
wait for the Boomers to leave. Act now. Your future success
depends on it!
Life
is good...
Wayne
Kehl and KW |
