A coming chronic shortage of leaders - and what your company should be thinking about
In a recent Business Week article entitled The Coming Fight for Executive Talent, Claudio Fernandez-Araoz of search firm Egon Zehnder argues that the number of managers in the right age bracket for leadership roles will drop by 30% in just six years.
Indeed, he suggests, the average corporation will be left with half the critical talent it needs by 2015.
For those who are paying attention to such early warning signs, now is the time to start thinking about your leadership pipeline. I like the concept of the pipeline which was made popular by writers such as Ram Charan and Peter Cairo. But the basic message is that you need to develop leaders in a bit of a sequence - it’s very hard for them to skip steps. And that means that your leaders in five to ten years are highly likely to be somewhere in your pipeline today, unless you’re just going to admit defeat and hire from outside, which is both expensive and competitively often not successful (remember Bob Nardelli and Home Depot, anyone?).
So what should be done?
First, analyze where your company is. Do you have a good approach to creating future talent and growing people who can step in?
If you think there are some problems, consider how you will start developing your cadre of future leaders. What experiences do they need? What courses should they go to? Who should they be? And remember, as our customers become more diverse, our leaders need to be diverse as well. We at Columbia strongly believe in the power of life-long leadership development experiences that combine learning with practical application and challenge people’s world views. For instance, my course on growth helps people think through real strategic growth challenges and apply the learning immediately. I’ve heard from many previous participants that it has really changed how they work and benefitted their organizations.
It’s also worth considering rejecting some old habits of mind. I’ve written before about how much great talent you might find if you just extended the window for considering women from age 50 to say age 59. It would dramatically increase the eligibility of large new numbers of successful leaders.
Training, promotion and development will be key to winning because not having the right leaders will be a crippling disadvantage when the economy turns up.
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- Posted: Monday, November 30, 2009
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Shortsightendess is so pervasive, especially in this economy, where many companies have gone into survival mode! I agree with the trend you expect here and already seeing it happen in some industries. The fact that many companies have thrown inexperienced leaders into the frey does not help, as many burn out, leave the company or look for more entrepreneurial options.
Also, talent can be developed for oneself. What are YOU doing to increase your ability to lead? How will YOU step up to the challenge? Seasoned leaders that had left the workforce (who has favored younger, less expensive candidates) may be up to it if they stay fresh and on top of things.
Rita you are right on target, but, unfortunately so is Monica. I just ran across a Business Week article from September 19, 1989 titled “Needed: Human Capital”. This article did an outstanding job of predicting the changes in the workforce we have had in the last two decades and it pointed out the necessity for paying more attention to developing skills in the workforce. I had the article because I was writing an article on the need for Human Resources departments to adapt to the changing work environment being brought about by rapid cultural and technological change. Organizations have not responded the way Business Week recommended or I was hoping for Human Resources. I think the rapid changes resulted in the focus on “flattening” and “leaning” that have just made the leadership shortage into a crisis. I concluded that aspiring leaders must train themselves and wrote a book (The Manager’s Guide for Effective Leadership” ) as a guide for such training. See more at my web site http://www.mymanagersguide.com
Great comments - I wonder if, when we see companies emerging from this Great Recession, we’ll see performance differences among those that did well with leadership development and those that did not. Perhaps then the longer term lessons will start to sink in…
What a great article. Keeping an eye to the future is so important for a business. I really appreciated this article as it shined some light on some things I need to do for my business in 2010.
This really shines a lot of good business light. I appreciate the article and tips on how I can improve somethings in 2010!
