07 Dec 09 Too many or too few?

In a recent issue of Business Week, author Claudio Fernández-Aráoz (Great People Decisions: Why They Matter So Much, Why They are So Hard, and How You Can Master Them
) writes that the number of managers who will be in the appropriate age range for leadership roles will drop 30% in just six years. His conclusion: The average corporation will be left with half the executive talent it needs by 2015.

As a senior advisor for global search firm Egon Zehnder International, Mr. Fernández-Aráoz should have some notion of what he’s talking about. The interesting point of the rest of his article is that Asian nations are taking the lead in developing managers, etc. But in the process of making his argument, he makes the following passing statement. “Companies will have little choice but to identify internal talent at an earlier stage and develop prospects at a faster pace.”

We’ll talk about the concern over Asian talent development in a later post. Right now I’m mulling over this issue of companies having little choice but to identify talent earlier and develop prospects faster. As much as I like to hear that (I AM in the leadership development business remember), I’m not entirely sure it is true. It sounds a lot to me like the McKinsey-based “Winning the War for Talent” approach which primarily made a case for using McKinsey, but not much else of value came out of it.

Assuming that the numbers are sound, it would seem to me that a drop in the talent pool of 30% might mirror the drop in available corporate leadership positions as well. Fernández-Aráoz suggests that there will only be half the needed talent by 2015. But this assumes the same level of “needed talent” as today. One of the positive consequence of all of the restructuring and integration activities within organizations today is that there are fewer management positions available. And I think this is a good thing.

By removing layers of traditional management or slimming the number of people in management roles, corporations are creating an environment where leaders must delegate and depend on their people. Command-and-control calls for strong management but in today’s flexible and chaotic world, companies need versatility more than they need control. I’m not suggesting anarchy. I’m simply saying that using fewer leaders to run bigger companies will create systems that provide more responsibility and accountability at the team level.
It is not an easy model to image because, as much as we don’t want to repeat the last decade of overall leadership in corporate America, we also don’t want to have to change. Any change that is out of our control (such as the demographic shift) is seen immediately as either a threat or a non-event. Perhaps it is somewhere in-between…a real opportunity to do things differently. If you need to develop leaders relatively quickly, make sure you aren’t creating clones of the past…that won’t work. Developing the foresight to see current and future challenges, and having the skill to lead in this new environment, you might need fewer managers to begin with.

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