The Coming Leadership Gap

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Special Promotional Feature

Effective leadership is a constellation of skills and competencies. Senior Hay Group researchers have now described how that constellation will dim with the retirement of the baby boom generation. In one study, a team of researchers identified the specific leadership competencies that will be in short supply  as these managers leave the workforce; in a second study, a different team detailed how businesses will be affected.

Key take-aways

  • Businesses stand to lose more than just experience as the senior managers of the baby boom generation retire: four specific leadership competencies will be in especially short supply.
  • The absence of these competencies will result in diminished leadership capabilities to address identifiable challenges affecting virtually all businesses over the next five to ten years.
  • Organizations should accelerate development of specific competencies among rising managers to close the gap and improve their leadership capabilities and success.

Findings

It is a demographic fact that senior managers will be retiring in large numbers over the next five to ten years, because the workforce in the developed world has been aging. This loss has been widely identified and reported, but there was very little objective information about its specific implications for businesses.

Hay Group researchers turned to the firm’s unparalleled databases on organizational leadership to investigate whether the retirement of these executives will leave organizations with a shortage of leadership competencies.

They found that senior leaders display many competencies to a greater degree than managers at lower levels – no surprise there. But they also discovered especially large gaps between senior- and mid-level managers for four specific leadership competencies, suggesting that younger managers will have a tough time stepping into their predecessor’s shoes in these areas.

Expanding on this research, a second team of Hay Group experts identified the kinds of business challenges that require these four competencies for effective outcomes – giving businesses a much clearer picture of the effects of the coming leadership gap.

Implications

Even a cursory review of the challenges affected by the leadership gap shows that two of the competencies – impact and influence, and team leadership – have a significant influence on a wide range of common business challenges, which make their coming rarity a particularly pressing issue.

Any business organization with a large percentage of senior executives approaching retirement should accelerate the development of these competencies among its junior managers, particularly those considered high potential.

Formal development programs should be examined and if necessary refocused. And senior managers still on board can be tapped to help rising executives improve their understanding and mastery of these critical competencies.

But now is the time to take action. The uncertain economy has slowed the exodus of older executives, but that grace period is ending – along with the unique leadership abilities of an entire generation.

The studies

Steven B. Wolff, Ruth Wagaman, Mary Fontaine; “The coming leadership gap: an exploration of competencies that will be in short supply;” International Journal of Human Resources Development and Management 2009, Vol 9, No. 2/3

Steven B. Wolff, Anthony Callahan, Signe Spencer; “The coming leadership gap: leadership challenges affected by the predicted competency shortage;” [Publication to come]

Hay Group is a global management consulting firm that works with leaders to transform strategy into reality. We develop talent, organize people to be more effective and motivate them to perform at their best. Our focus is on making change happen and helping people and organizations realize their potential. We have over 2600 employees working in 84 offices in 48 countries. Our clients are from the private, public and not-for-profit sectors, across every major industry. For more information, call Alberto San Pedro in the Hay Group Vancouver office at 604.682.4814 or email Alberto.SanPedro@haygroup.com.

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