By Sue De Pasquale
The graying of the baby boom generation may be good news for retirement communities. But in the corporate world, where business people are retiring at an unprecedented rate (about 10,000 per day, through 2030, according to the Insured Retirement Institute), the demographic shift is seismic—and it points to an impending crisis in leadership in C-suites across the country and around the world.
“Many companies do not have strong succession plans in place for replacing their top executives,” says Tom Crain, a senior lecturer at the Carey Business School with expertise in leadership theory, ethics, and cross-cultural communication. “I have seen this problem at the highest levels.”
The numbers bear out Crain’s concern. According to the 2016 Global Human Capital Trends report by Deloitte, based on more than 7,000 responses from more than 130 countries, 56 percent of surveyed executives report their companies are not ready to meet leadership needs. More than a quarter of those surveyed (28 percent) report a “weak leadership pipeline” as an issue deserving attention. And 21 percent have no leadership development programs in place at all.
“People who are in top leadership positions are often reluctant to relinquish their positions,” observes Crain. “And due to the demands of their jobs, they often feel like they don’t have the time that’s needed to prepare new leaders to succeed them.”
Who will be tapped to fill this gaping void? From a demographic perspective, the savviest corporations should be looking to their youngest employees: the “millennials,” those born (roughly) between 1982 to 2004, who are now in their 20s and 30s. “Millennials now make up more than half the workforce,” notes the Deloitte report.
The report goes on to note that millennials “bring high expectations for a rewarding, purposeful work experience, constant learning and development opportunities, and dynamic career progression.”
As a result, says Crain, it will require some out-of-the-box thinking—and soon—when it comes to grooming millennials, who are “not really at an age level that traditionally has been ready for taking over leadership positions,” to assume top spots.
Traditionally, notes Crain, information in most corporations has flowed in one direction: from the top down, with younger workers expected to “take orders and conform to what the organization wants them to be.” This model has to change, he says. “It dampens innovation, initiative, and risk-taking”—all attributes particularly prized by millennials. In fact, nearly two-thirds (63 percent) of millennials surveyed by Deloitte in a 2016 survey believe their leadership skills “are not being fully developed.”
So what’s the best blueprint for cultivating today’s up-and-comers to be tomorrow’s organizational leaders? The most forward-thinking organizations are using a variety of creative approaches.
“Reverse mentorship,” in which older leaders are paired with younger ones to educate each other on how business works and on innovative new ways of thinking, is one strategy being adopted by companies ranging from Target to United Health, according to Fortune magazine. Millennials are able to share their expertise in social media and crowd sourcing, tools so vital to reaching prized younger audiences today, as they gain access to the higher levels of the organization. “The added benefit to the younger workers is a potentially accelerated career track, as the mentoring arrangement raises their profile among senior executives of the firm,” reports the Harvard Business Review.
“PEOPLE IN TOP LEADERSHIP POSITIONS ARE OFTEN RELUCTANT TO RELINQUISH THEIR POSITIONS. DUE TO THE DEMANDS OF THEIR JOBS, THEY FEEL LIKE THEY DON’T HAVE THE TIME TO PREPARE NEW LEADERS TO SUCCEED THEM.”
— Tom Crain, Carey Business School Senior Lecturer
Crain saw this approach work successfully at the Maryland Humanities Council, which was heavily skewed in its membership to the over-50 crowd and was struggling to reach a younger audience. Crain encouraged the council to bring on a former Carey student, a millennial, for a reverse mentoring partnership. The millennial “helped create a whole raft of social media options in his efforts to mentor the entire leadership of the council on ways to reach younger citizens of Maryland,” says Crain. As a result, participation in council events by those in their 20s jumped by nearly 200 percent.
With “group mentoring,” a single executive leader can work with several millennial mentees, or two or three seasoned leaders can team up to mentor a dozen younger employees. This strategy is less time intensive for the senior mentors. It takes advantage of advances in computer networking to connect participants and enable them to define their experience in their own terms, through online forums, document sharing, group polling, and more. The online coaching is usually supplemented with face-to-face meetings and conference calls. “Because millennials are used to working in a networked environment, this approach can be very effective in building leadership skills,” says Crain.
When leadership programs fail to meet their aims (some 55 percent of 7,500 executive respondents to a 2015 Korn Ferry “Real World Leadership” survey judged their leadership development spending return on investment to be only fair, poor, or very poor), it’s often because they don’t incorporate “authentic learning” strategies, says Crain.
“Too much of learning is ersatz—it’s simulated,” says Crain. “The best leadership training programs put people into situations where their decisions and thinking are tied to actual results.” This forces participants “to stay in the game.”
If you want to put [millennials] into leadership positions,” says Crain, “you need to first give them the opportunity to lead—to come up with creative solutions and actually implement initiatives.”
The Need for Leadership Training
The traditional pyramid-shaped leadership development model is not producing leaders fast enough to keep up with the demands of business and the pace of change. According to Deloitte’s 2016 Global Human Capital Trends survey based on more than 7,000 responses from over 130 countries around the world:
Some 92 percent of survey participants cite the need to redesign their organizations as a critical priority. The “new organization,” Deloitte predicts, will be “built around highly empowered teams, driven by a new model of management, and led by a breed of younger, more globally diverse leaders.”
Targeting Millennials: A Missed Opportunity
Organizations need to start filling their leadership pipeline by identifying which millennials have the potential to fill in those management positions to avoid any shaky transitions as baby boomers hand off the baton. But according to a 2016 Deloitte survey:
The result leads to a lack of loyalty, which leads to job churn.
The most loyal employees are more likely to agree that:
- There is a lot of support/training available to those wishing to take on leadership roles; and
- Younger employees are actively encouraged to aim for leadership roles.
Meanwhile, the least loyal employees are significantly more likely to say that:
- I’m being overlooked for potential leadership positions; and
- My leadership skills are not being fully developed.
Millennials want to take on more responsibility but are aware they lack the leadership skills needed to be successful in a supervisory or managerial role.
of millennial leaders in a Bersin by Deloitte study still do not feel ready to be in their leadership roles. They cite “managing difficult people or situations, lack of experience, and dealing with conflicts” as their top concerns and reasons for their lack of preparedness.
SOURCE: 2016 Deloitte Millenial Survey
Leadership Training Needs to Change to be More Effective
Study respondents say that if they could, they would discard nearly half (48 percent) of their leadership development approach.
SOURCE: Korn Ferry’s “Real World Leadership” study of more than 7,500 executives from 107 countries
“IF YOU WANT TO PUT MILLENNIALS INTO LEADERSHIP POSITIONS, YOU NEED TO FIRST GIVE THEM THE OPPORTUNITY TO LEAD—TO COME UP WITH CREATIVE SOLUTIONS AND ACTUALLY IMPLEMENT INITIATIVES.”
— Tom Crain
TRADITIONALLY, INFORMATION IN MOST CORPORATIONS HAS FLOWED IN ONE DIRECTION: FROM THE TOP DOWN, WITH YOUNGER WORKERS EXPECTED TO “TAKE ORDERS AND CONFORM TO WHAT THE ORGANIZATION WANTS THEM TO BE.”
Not Enough Attention Is Being Paid to First-level Managers
“Connection to the organization’s mission is getting lost at various levels of the workforce. Without organization wide engagement, strategic change initiatives will not fully succeed, nor will any critical business initiatives. That’s where leadership development comes in. It has to be real, relevant, and consistent through time and across the organization.”
Noah Rabinowitz, senior partner and global head of Korn Ferry’s Leadership Development practice
The Leadership Pump Needs Better Priming
According to a Bersin by Deloitte research study, successors have been identified for just:
Below the senior executive level, there is a significant lack of engagement in driving strategic change. According to Korn Ferry’s “Real World Leadership” study: