Succession Across the Generations

by Stephen Xavier and Sharon Doyle

The media and some talent professionals have hyped the need for companies to adapt to younger employees. However, in the process of making concessions, some organizations have lost sight of fundamental talent management principles, particularly succession planning, which includes actual readiness, not just generational adaptability.

This oversight will spell disaster when baby boomers - temporarily halted by diminished retirement portfolios - finally depart the workplace. Companies revising proven systems and processes to provide special accommodations for young employees should not neglect high-potential leadership development, preparing for the next round of talent warfare by ensuring bench strength for today and tomorrow.

Baby boomers number 76 million, and millennials - also called Generation Y - 75 million, but there are only 41 million Gen Xers. Gen X eventually will have to replace retiring boomers, and there just aren't enough of them. When the recession ends and baby boomers retire, this demographic problem could turn into another economic disaster. Yet there are some boomers who failed to adequately save for retirement and will continue to work into their 70s and beyond. What should their contribution be, and are Generations X and Y prepared to learn from, and ultimately manage, this aging generation effectively?

"There is much talk about 'getting people back to work,'" said Devon Scheef, co-founder of The Learning Cafe, a California-based training company. "But hiring managers don't set out to hire 80 people. They want 80 people with specific skills. The questions are, what training do the millennials need, what leadership competencies does Generation X need so they can replace the boomers, and how can we retain both Generation X and the millennial generation to avoid wasting investments in training? Organizations are not paying enough attention to the middle of the talent pipeline."

Generation X: Ready or Not?

According to stereotypes, boomers think Generation X needs a stronger work ethic, and Gen Xers see the boomers as self-absorbed workaholics. The facts are less concrete, and ultimately generational diversity must be leveraged to enhance the leadership pool.

Gen Xers, born between 1965 and 1976, range in age from 34 to 45. Corporate America's C-suite is currently about 60 percent boomers and 40 percent Gen Xers. But there is a problem. "Some boomers are going to remain in the workforce a lot longer," said Jonathan Magid, co-author of Why Leaders Fail. "As a result, increasing numbers of high-potential Gen X executives may bail because they feel they have no place to go in their organizations. Talent management professionals need to be mindful of turnover among executives who have significant executive experience but perceive themselves to be blocked."

What could motivate and retain Generation X? "We look for opportunities to grow and achieve and to be rewarded for achievement," Magid said. "If opportunities, growth and rewards are not forthcoming, we conclude that we're expendable.

With regard to Generation X, the talent management challenge is twofold: motivating and retaining Xers who feel blocked by boomers who are not retiring and building Gen X bench strength so the boomers who are retiring can be replaced with effective leaders who can meet business demands. The solution is the same for both: Implement a range of strategies that will motivate and develop Generation X to promote growth, and ensure challenges as they prepare to move into more senior positions.

"We might be just a little too focused, at times, on the importance of generational differences, even while I recognize that they are notable," Magid said. "Instead of altering your philosophy to make accommodations for generational differences, help leaders understand what drives success in the organization, including being able to work effectively with divergent points of view, life experiences and expectations."

What's in It for Millennials?

Born between 1977 and 1998, millennials are now 12 to 33 years old and are known as the "what's in it for me" generation who will plan their exit strategy from day one if they don't get what they want. However, some older millennials have taken their place in organizations as first-line managers and supervisors. Although still a long way from the senior leadership ranks, millennials need to be motivated and retained so they can fit into the leadership pipeline.

Scheef said millennials want a structured, supportive work environment, personalized work and interactive relationships where they can make a difference and be recognized for their contributions. Further, when recruiting and managing younger millennials, it's important to be aware of the relationships they have with their parents.

"Two-thirds of millennials consider one or more of their parents to be their primary career coach," Scheef said. "When they come into organizations, they expect from their bosses what they got from their parents: little authority or hierarchy, but rather coaching or quasi-friendship. Organizations have responded by providing opportunities for millennials to participate in teams and rotate through various departments in the company. Another appropriate strategy has been to establish affinity groups to create a cohort for younger workers. Many of these groups welcome members of other generations and frequently invite boomers to speak to them about their experiences in the company."

However, sometimes millennials' parents take their involvement too far. Magid recalls one instance where an employee's mother called to complain about her daughter's performance review. "She really believed in her child's ability to be promoted, but the individual wasn't quite ready," Magid said. "Millennials have to understand it takes time to gain experience and develop leadership skills."

In any case, having mom or dad step up to the plate does not send the right message by any business standard. In fact, it sends a bad message and should not be tolerated. Home is home. Work is work. Younger employees should be expected to demonstrate some maturity.

Developing millennials is a matter of channeling what they bring to the table in a productive direction. For instance, their ability to multitask using technology equips them with extraordinary change acumen.

"The problem is that in meetings, they are texting, e-mailing and IMing while attempting to participate in discussions," Magid said. "Teach them about task sequencing rather than multitasking. Unfortunately, multitasking is often listed as a job requirement. That's incredibly dangerous and shortsighted. Companies need people who can manage multiple priorities."

Any concessions for millennials should be treated on a case-by-case basis and based on a company's needs. Accommodations should be made to motivate, not to be politically correct. Avoid generational stereotyping, and avoid assuming everyone is motivated only by financial gain. Leverage the millennials' desire to make a name for themselves with low-cost or no-cost reward and recognition options.

Use rational, logical processes to assess and develop talent all the way down the pipeline. Don't lose young diamonds in the rough by being too inflexible, but don't give away the store to them either. Assessment, development and advancement should fit the workforce, workplace and customer needs and account for individual differences, not just generational ones.

The millennials' desire to contribute presents opportunities to coach and mentor, and turn them into long-term, valuable contributors. Mature employees can help them see the big picture and how the organization's mission and goals are aligned with their individual goals.

"We have two ways to deal with the generation gap," Scheef said. "One is to say 'the [other] generation is wrong and needs to change.' A better way is to understand the gap and bridge it. Millennials may start job-hopping again when the economy improves. Now is the time to provide them with development that will also retain them."

Last But Not Least, the Boomers

Boomers have unkindly been called the gray ceiling because many have postponed their retirement and kept Generation X from moving up. But when they do leave, talent leaders don't want boomers to take their wisdom with them.

"Organizations that have not treated their boomers with respect and dignity will find them uninterested in sharing their accumulated experiences and expertise," Scheef said.

Talent leaders should implement strategies immediately to initiate knowledge transfer from boomers to Generation X. These programs also can evolve into strategies to accommodate boomers who are not going to retire soon. Magid said organizations will have to design roles for people in their 80s and possibly their 90s. He suggested creating a semi-retirement career track to allow older contributors at any level of the company to serve as distinguished advisers so Generation X and the millennials can learn what it takes to lead, including from people who are substantially older than they are.

In the recession, immediate needs and the bottom line have become all-consuming - doing more with less, efficiency, productivity, head count reduction and cost cutting. But recessions always end, and organizations will be compelled to drive renewal and growth. As soon as retirement portfolios recover, baby boomers will exit, perhaps abruptly. When that happens, organizations that are not prepared with a new generation of leadership will experience a brain drain like none before in history. It could lead to another economic disaster by destroying American companies' competitive edge in global markets.

Strategic talent management, particularly development of executive bench strength, deserves top-of-mind awareness and a concerted, hands-on effort right now. This is the time to identify, develop and retain talented people who are capable of stepping into leadership roles in the near future.

[About the Authors: Stephen Xavier is president and CEO, and Sharon Doyle is an associate of Cornerstone Executive Development Group Inc., an executive coaching and leadership development firm.]