The Dearth of Executive Talent - Boomer or Bust?

By John Jazylo, Partner - Epsen Fuller | IMD

While the world knows that the Baby Boomer generation is now starting to hit retirement age, what they may not be aware of is the effect it will have on business everywhere. Baby boomers make up more senior management of leading companies than any other segment of the population. What will happen in business when this extremely important generation shifts their time to the beach, cruise ships and grandkids?

According to recent industry survey findings, more than 15 percent of senior executives with the nation’s 1,000 largest companies indicated they were most concerned with baby boomer retirements as a trend that will most significantly alter the workforce in the next decade. Moreover, even as companies contemplate layoffs, many hiring executives also are hunting for new hires to fill those management gaps.

One of the main reasons for this shortfall in talent has been the lack of grooming and training of employees to fill the roles of the retiring - either voluntary or involuntary – baby boomers. So, top executives, it seems, are finally thinking about what knowledgeable people have been saying for some time: The retiring of baby boomers will change the workplace like no other trend in the past several decades.

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Building A Talent Brand

Attract and develop the best and the brightest to remain competitive

By Thomas J. Fuller - General Managing Partner - Epsen Fuller | IMD

In today’s increasingly complex business environment, companies are competing fiercely for talent as they struggle to maintain the pace of innovation. Talent is perhaps the only remaining sustainable competitive advantage in the globalized economy where access to capital seems limitless and the speed of change relentless.

The traditional corporate arena is in the process of being redefined. In the global struggle for market share, winning the battle for the most capable leaders can be decisive. While CEO turnover, and that of other c-level executives, continues on a frenetic pace, recent studies by renowned management and leadership experts Jim Collins, Peter Capelli and Nitin Nohria all suggest that the quality of leadership is the single most important driver of corporate performance and shareholder value.

While talent is critical to success, it is also becoming scarcer by the day. Numerous studies indicate a seismic demographic shift, pointing to a continual decline in the executive population. In addition, the “supply” problem is further compounded by the progressively more sophisticated competencies being demanded of the executives of today and tomorrow. In an increasingly complex and globally integrated environment, managers need to demonstrate cultural versatility, entrepreneurial ability and the influencing skills to manage geographically dispersed teams within matrixed organizations.

The specialization and complexity being defined in many of today’s emerging roles is staggering. CIO’s are expected to transform into Chief Efficiency Officers, Chief Security Officers are no longer just minding the activity at the front door, risk management is top of mind with most of today’s CEOs; at the same time, many companies struggle to maintain a true connection with their customer and anyone who can truly drive business strategy and transformation is being sought after with rock-star status.

 

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"Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity."

                                                                     ~ George Patton

            

 The First 100 Days

The most common mistake that senior executives make in their first 100 days is getting sidetracked by short term issues.  62% of the respondents of a recent online survey by Epsen Fuller/IMD believe "putting out fires" can be detrimental to an executive in a new position.  "Executives need to be focused from day one, develop a plan and stick to it," says Tom Fuller, general managing partner of the firm.  Other common mistakes that are made:

• Not recognizing the values of the organization's legacy

• Failing to manage unrealistic expectations

• Hesitating to implement change

• Failing to create and get buy-in on a strategic plan

• Attempting to do too much, too fast

• Failing to forge strong alliances

The latest turnover numbers continue to defy what has been happening in the American economy. The continuing impact of the sub-prime credit problems, increasing gas and food prices, conflicting news on corporate earnings and overall sluggish growth would typically translate into an increase in executive turnover as well as an increase in overall unemployment economy-wide. While the numbers have not gone exactly as expected, Liberum Research, predicts turnover numbers will remain high as we move through the summer months.

Compared to the last years numbers for the month of June, CEO turnover declined 7%, CFO turnover declined 22% and overall C-level turnover declined 6%. These declines took place while overall nation-wide unemployment figures have been increasing.