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.