The looming macro-succession crisis

I was reading a Seattle Times story earlier today on how men in their 30s are earning less than their fathers did. An interesting story top to bottom, but the concluding section drew me back around to something that I really haven’t talked about enough lately – the looming generational macro-succession nightmare facing corporate America.

Diehard careerist baby boomers also might partly explain the inability of 30-something men to move up the income ladder as quickly as their fathers. From the moment Generation Xers entered the workplace, boomers have been the “ceiling” blocking their way up the income ladder, said Peter Rose, a partner with marketing-research company Yankelovich in Los Angeles.”The boomers stand out in defining themselves in terms of their work and have shown a disinclination to get out of the way,” he said.

It’s hard to blame the Boomers for not getting the heck out of the way, although I’ve certainly been one of those Xers stacked up beneath that in-no-hurry-to-leave Boomer leadership dynamic. But there’s a basic numbers crunch that’s about to hit, and it’s going to throw a lot of companies into leadership transition crisis. Consider:

  • The Baby Boom was huge – depending on how you slice the numbers, the Boom Gen is around 75 million strong.
  • The leading edge of the Baby Boom was born in 1943, which means the first wave hits 65 – the traditional retirement age – in about six months.
  • Boomers dominate American corporate leadership. There are some Xers in power (the front edge of X is currently 46 years old), but not many. And a lot of the ones who are in positions of senior leadership are at the head of organizations forged through their own entrepreneurship – X representation in large legacy corps is smaller than some of us would hope. Of course, it’s natural that 40 year-olds are going to report to 50 year-olds, but when that “grooming” tier is also clotted by the senior cohort, it means fewer opportunities for the next wave to prepare for leadership.
  • Generation X is a lot smaller – maybe 50 million or so. If we can extrapolate these larger numbers to seats at the management table, it suggests that for every three jobs currently occupied by qualified Boomers, there are only two qualified Xers ready to step in. And that assumes that the number of qualified Xers isn’t being suppressed by the dynamic described in the previous bullet point.
  • For a wide variety of reasons, Generation X is going to bring a dramatically different leadership style to everything it touches. It’s going to be more entrepreneurial, probably more cynical, and unfortunately it may not be as instinctively team-oriented as the generations ahead of it or behind it. In any case, the shift from Boomer management to Xer mananagement is going to place a good measure of stress on most organizations.
  • Then there’s the second wave transition: from Xer to Millennial. The oldest Millennials are currently about 27 and are approaching the age when they will be expected to assume a greater mid-management role. Again, the shift from X to Mill is dramatic – far more dramatic than the Boom-to-X transition, in fact. Millennials are extremely team-oriented, in stark contrast to individualist Xers, but they’re the least accomplished of all four generational cycles at critical thinking and problem solving. Add to this the fact that this particular cohort has grown up the most affluent in American history, and what emerges is a portrait echoed by every single leader and manager I have talked to: Millennials are collectively entitled and self-absorbed, and their managers report having to spend an inordinate amount of time and energy managing egos and emotional drama. Eventually this generation will likely evolve into a powerful force for productivity and change, but for the moment it’s woefully unprepared to cover for a sudden rapid promotion of the Xers in lower and middle management roles.
  • The Millennial Generation, by the way, is potentially larger than the Boom – some demographers say’s it’s the nation’s first 100 million+ cohort.

What should be emerging is a forecast of a significant management “stretch.” The imminent retirement of a large management generation requires a massive and rapid influx of Xers, but at the same time, a wholesale promotion of Xers places the lower levels of management – the tactical execution level – at risk. And X simply isn’t large enough to manage all that is going to be asked of it over the next decade and beyond.

I’m still trying to talk to more company leaders to get a better picture of what’s being done to prep for this macro-succession challenge. So far the answer seems to be “not a lot,” but admittedly my sample is still too small to do too much large-scale generalizing.

What I can do, though, is state with confidence that the dynamics described here are real and that organizations that aren’t taking them seriously are in for a rough ride. There are ways of mitigating the crisis, and since it’s going to be happening across all industries there are ways of turning this into opportunity. But companies need to get started yesterday….

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21 responses to “The looming macro-succession crisis

  1. Pingback: The looming macro-succession crisis « Scholars and Rogues·

  2. Any time anyone talks about numbers like that, it scares the bejezezus out of me beause men my age make less than our fathers–and we’re also expected to pay for our fathers’ retirements. And as you point out, there are many more of them than us.

  3. I guess I’m one of the “lucky” ones, Chris. I don’t have to worry about taking care of the ‘rents and I don’t have kids – and it’s STILL hard as hell. I don’t how people with serious obligations do it.

    Maybe I’m deluding myself, but the numbers point to ‘every dog has his day,’ and maybe this corp crunch is going to be the long-awaited payoff for a lot of smart, deserving people out there. I expect great things….

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  5. 30 year old male + Masters Degree + 70 hours a week at two jobs + Buffalo, NY economy = 25k a year.

  6. At 30 you’re toward the lower end of Gen X, which means you’re further from the board room than a guy my age. But if the shift I’m talking about happens it could mean quick opportunity for you.

    In your case, though, I think you have to look hard at the “Buffalo” part of the equation. That’s an economy that’s going to exacerbate every other part of the situation.

  7. It’s funny all the media outlets around here preach about gloom and the “Brain Drain” yet all around the area there are business going up like crazy. Just outside the city limits there are million dollar houses going up as well. While the city itself has issues with people staying, the surrounding burbs are booming in housing and business, yet for some reason jobs are hard to come by. Of course these jobs most likley are lower paying, but there for major corporations, so there’s room to advance. One of my buddies is moving to Detroit becasue there’s jobs out there, that’s a shock becasue ther one city that’s worse off then Buffalo as far as young people leaving and poor economics.

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  9. Great commentary Sam… Any generational analyzing fascinates me. I love hearing about how self absorbed my generation is. I always find that label to be so worthy of discussion because I find that most Millennials would probably agree with it. I find that most Gen X’ers are, in the cases that I’ve encountered, threatened by Millennials… not all of them, but the ones that strive to do well in the workplace. Consider… Gen X is essentially blocked from reaching the top by a larger force (Boomers) and then coming up from behind is another larger force… the Millennials. Is it possible that the constant negative assessment of Millennials simply a response to a potential threat? Naturally, being a Millennial, I come off sounding emotional and self absorbed and spoiled and so on… but what if, as true as that is, those of us who recognize this in our peers can use it. Why can’t Gen X’ers that see their kin function poorly in teams address it, and learn to lead? Why can’t some Millennials see their peers whining away, and adapt to be something other than that, something better? I think that those who successfully achieve this sense of adaptability (and a willingness to be so) are the ones that will deal far less with the negative trials of the corporate gauntlet.

    Mind you, in class, I was always overly idealistic… consider this though:
    26 year old in Buffalo, NY + Master’s Degree in IMC = Project Management position in E-Business of HSBC… and they’re giving me quite a bit more than 30k a year to do it (no offense to the guy above, and I’m not bragging, trying to prove a point).

    Rambling here… but perhaps if we each recognize our strengths AND our weaknesses and find ways to use them both, can’t we break through the stereotypes of our respective generations? Isn’t that what leaders do?

  10. Hey Jeff. Good to hear from you. I think you’re accurately pegging something about X – we’re insecure, and in places terrified, because we’ve been excluded from a lot of opportunities and many of us who have accomplished something have had to claw for every last scrap. Not to be overly dramatic, but at a collective level it’s true. So as you say, can’t get past the Boomers above us and here comes a gen behind us that has been treasured by their Boomer ‘rents – if you’re even a little prone to paranoia you begin imagining that before long the kids are going to be leapfrogging you.

    The fact that we simply refuse to see ourselves AS a generation – as ANY kind of collective force – makes it worse. A well-organized Xer movement could raise mortal hell, but it’s almost as if we’d rather die alone than thrive together.

  11. I’m one of those people in the middle of the X’ers and the Millennials. It astounds me how group centric the people my age and younger are. I was in Jr High when the “group project” came into vogue, and continued with them all through college. In my experience, it was usually 1 or 2 people that did the work and the rest tagged along. Corporate America is going to be in for a shock when these kids begin to get into management.

    That’s why I started a consulting firm. Corporate politics make it a crap shoot to try and advance. I’ve seen a lot of “promote to where they can do the least harm.” It’s my feeling the direction of corporate America is to outsource more and more of their critical thinking. It only makes sense to be a critical thinker for hire.

  12. The problem there is that when you outsource all the critical thinking it leaves with an organization that doesn’t realize its need for critical thinking. I’m stuck in the midst of a sales process right now because procurement of a critical (and critically important) program has been entrusted to a middle manager who doesn’t see the need.

    This isn’t pretty. It won’t be a sudden realization that gets people of my generation into corporate leadership – it will be a simple numbers game.

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  17. The Boomers are not going to get out of the way, unfortunately. One thing that often elides the national business media is that a fair proportion of corporate profits since the 90s can be attributed to the demise of the defined benefit pension plan. These plans (which generally paid a % of final average income times years of service) were once sold and operated as tools to encourage older and (so it was said) less productive employees to leave. Unfortunately, the stock market boom of the 90s caused companies to fund these plans as though the hot market would last forever. When it didn’t, the plans were found to be underfunded and, in most cases, cancelled.

    Eventually, the Boomers will die, but until then, expect to see some people bringing their oxygen bottles to work strapped on their walkers. I would also expect to see these things:

    1. More investment in capital equipment to take offset labor shortages.
    2. More stringent anti-age discrimination laws (Boomoers vote and their continued employment will ease the strain on SS and Medicare)
    3. Experimentation with self-directed work teams as organizations are forced to flatten

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