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….