Energy Is Not the Only Critical Resource Shortage Facing Businesses
With the bulk of Baby Boomers reaching 65 by 2010, who in today’s leaner workforce is being groomed to lead tomorrow’s companies?
In today’s business environment the focus is on efficiency and higher profits, which in turn deliver greater shareholder value. Focus is placed on the upper levels of management who set the goals and are responsible for the results. Everyone knows that it takes a team, sometimes a large one, to make a company successful, but without good leadership a company’s plans for success are doomed. With a majority of today’s leaders nearing retirement age, companies must start molding their leadership resources today in order to provide the leadership they will need in the future.
A 2000 General Accounting Office report entitled Senior Executive Service: Retirement Trends Underscore the Importance of Succession Planning stated that, “retirement eligibility in the executive ranks would climb at a rate of 18 percent between 1998 and 2005.” The report concluded that succession planning was a critical issue that should be included as a part of strategic goals.
With the year 2010 on the horizon when a majority of baby boomers will have reached 65, many senior executives will have their eyes on retirement. Some companies offer full retirement benefits at age 62, and early retirements are being offered as a part of downsizing efforts for many, making 55 the magic age. In Forbes 2004 Special Report on 2004 CEO Compensation, 500 of the highest paid executives were listed. The youngest was 38 years of age. The greatest concentration of executives, 53 percent, was between the ages of 53 and 61. The largest decline followed age 61. The oldest CEO was 85.
How will this report look in 2010? Where are the leaders of tomorrow going to come from? Are there going to be more or fewer companies competing for the top leadership talent? An obvious answer is that the leadership pool will be leaner. Regardless, the companies that prepare today by identifying and developing their leaders will be better prepared to meet the business environment of 2010.
What are the basic leadership attributes that companies should look for? “General intelligence, interpersonal effectiveness, impulse control, and the ability to rapidly analyze and make decisions on complex issues.” Ken Pederson, PhD. is President of Michigan based Executive Talent Management, LLC. “You can identify real leaders very early. They consistently over the first few assignments learn the role faster and make a quicker impact than their peers.” Another issue is the leadership requirements of a modern organization. Dr, Pederson says, ”Technology and the evolution of what work is will force companies to replace Boomers with a different kind of leader – potentially a more technically savvy and efficient leadership cadre.”
Many companies invest thousands of dollars in assessment and coaching services for senior managers so that they will be prepared to enter the executive ranks.
First line employees who show leadership potential are often candidates for early supervisory positions. It is assumed that these individuals will advance through the ranks during their careers to serve in senior positions. But many employees who become first line supervisors don’t excel as leaders, because they lack the required strengths. These employees might make a greater contribution by remaining in their profession or trade and serving as role models for less experienced employees. Of course to support this culture, a company has to value and acknowledge its senior non-supervisory employees with adequate recognition and compensation.
The key to effective corporate succession planning is to identify the leaders of tomorrow early in their careers and target them for leadership development. Dr. Pederson says, “The early identification of people who exhibit the potential to cope with the demands of rapid career expansion and then exposing them to ever increasing and diversified experiences, will assure that they are both ready and credible for executive leadership when you need them.”
Susan Silvano, president of Career Management International, Inc., believes that, “employees who are taught basic interaction and communications skills will demonstrate leadership abilities much earlier in their careers. Using our Kingdomality I program, we help individuals to identify their own personal styles along with those of their other team members. When people leave our workshops they know how to recognize differences in their communication styles that can either be obstacles to working with others or can be leveraged for success.”
Ms. Silvano also discussed the assessment of individual strengths to benefit an organization’s mission, “Individuals also learn their marketable strengths and how these strengths match the corporate needs during the Kingdomality II workshop using CMI’s Career Alignment Profile program. CAP is a computer-based assessment, which identifies and compares a person’s strengths to present or future career goals. Other Kingdomality programs address individual stress and resiliency issues as they relate to the workplace. Kingdomality also helps groups understand their dynamics and provides effective ways to work as a team, and how to market their strengths as an organization.”
Leadership development is a process, which should last throughout an employee’s career. The leadership skills that an employee gains from the practical experience must be combined with a regular program of training, evaluation, mentoring.
Memorial Herman Healthcare System, based in Houston evaluates leadership potential starting with the interview process. As leaders are identified they are selected to participate in several programs during their careers. One such program is a Leadership Certification strategy involving 952 leaders who are required to complete seven core leadership modules over a two-year period. The two to three hour modules are taught by senior management and are required for merit increase eligibility.
Another Memorial Herman program targets higher level leaders. “Each year we select 15 high performing Directors to participate in a two year program designed to help them better understand how the entire organization works.” Doug Beckstett, Chief HR Officer for Memorial Herman, “over the course of time we will produce a diverse group of 80 to 100 high performing director who will be better prepared to assume larger, more complex roles.”
Business challenges will always require more of corporate leaders. One of today’s great challenges is to provide companies with the leadership required to drive them to success in 2010. Early leadership identification and development is the key to providing the leadership of tomorrow.
