“Companies are losing leaders at a faster pace than they are producing them. More than 30 million managers and leaders will be retiring within the next five years.”
This statement in a September 2007 Dow Jones article, “How to Fill the Talent Gap” by Douglas A Ready and Jay A Conger, reminded me of the Welsh comedian Max Boyce and his classic joke about how long it would take to fill a bath with water flowing in at x litres a minute and the plug letting it out at y litres a minute. The answer, “I don’t know - but a lot longer than if they put the plug in” certainly holds equally true here! Unfortunately, while the analogy may be relevant, the challenge is a lot more complex.
Just think: 30 million managers, with say 40 years experience each, means the market place is effectively losing 1.2 billion years of experience over the next 5 years! (And that's just the US - the scale is similar in Western Europe.)
That’s the equivalent of the water going down the plug, but, while it may be possible to slow it down slightly by postponing or delaying the retirement of some of these managers, that only offers a temporary solution and, unlike the plug in the bath analogy, does not really simplify or solve the problem.
But does the scale of the numbers perhaps lead us to think the problem is bigger than it really is? After all, managers have been retiring for centuries and there has always been someone to step into their shoes: companies have always had their succession plans providing the streams of fresh talent to refill the bath, so that must surely be the case here, too. Unfortunately, the widespread concern about the numbers and the acknowledgement of “the war for talent” clearly indicates that this is not so, and in this case the bath would actually appear to be emptying rather than refilling.
Worse still, the timing seems to compound the problem further, coming when global competition and the pace of change demands good management and leadership of an unprecedented standard.
Clearly then, business faces an unheralded challenge. Yet it was Einstein who said, “In the middle of difficulty lies opportunity” and clearly this creates an unprecedented opportunity, especially if we adopt his mindset that “We can’t solve problems using the same kind of thinking we used when created them.”
Perhaps in this instance the fact that so many “old school” managers and leaders are retiring is actually a blessing, for it will open up the possibilities for new ways of doing things that might not otherwise have been possible. Messrs Ready and Conger suggest part of the solution is to recognise that “talent management is everyone’s job.” This, however, implies a new management style and something that few, if any, organisations are set up to handle. I believe the answer runs deeper than that, and a new organisational framework is necessary to ensconce such thinking and behaviour into the day-to-day running of the business. This is essential if companies are to fill the hole and remain competitive.
Valuing and treating people as assets certainly offers a mechanism that will achieve this.