It would be an understatement to say that time is of the essence to develop the next generation of corporate leaders. With the average age of a CEO standing at just over 54 years old and with CFOs typically earning promotions around the age of 50, these mostly Baby Boomer leaders are growing increasingly close to retirement age.
According to resources such as the Harvard Business Review, CEOs generally step down at 62 years old. What makes the oncoming leadership rollover particularly concerning stems from the fact that outgoing Baby Boomers and incoming Generation X and younger generation leaders possess radically different worldviews. Given business professionals in the Gen X demographic range between 41 and 56 years old, a cultural shift appears inevitable.
Unless companies develop next-generation CEOs and CFOs now, foundational leadership principles could give way to a costly trial and error period. Gen X business leaders and future leaders of organizations will likely alter and challenge many conventional ideas about doing business in the information age. But no one wants newly minted CEOs and CFOs trying to reinvent the wheel.
Preparing Next-Generation Leaders Is Mission Critical
A reported 2-in-5 CEOs fail within 18 months of their promotion. Only about 30 percent of Fortune 500 CEOs lasted three years in their position during the last 20 years. Rarely do business leaders fail because they lack the expertise or experience to handle the rigors of their position. Instead, a lack of soft leadership skills tends to upend their success.
As next-generation leaders infuse styles driven by technology, remote interactions, creativity, and cooperation, this transition could prove surprisingly disruptive. Old school business leaders and those who earned their way in the trenches may not share the same belief system. The corporate world will not completely change to accommodate a new leadership style. That’s why the next generation of leaders must undergo training now to successfully navigate multiple business perspectives.
What Skills Will Next-Generation Business Leaders Need?
Organizations are tasked with creating a steady pipeline of next-generation leaders. The idea that a company can invest in educating mid-level executives to take charge when tapped seems simple, but it often times presents challenges.
Passing down knowledge and experience does not necessarily account for changing business cultures. The Baby Boomer occupying the corner office enjoyed success based on prevailing management principles. That does not necessarily make them an expert on workers who grew up in the technology age. A merger of the tried-and-true skills and emerging workplace expectations, such as the following, may better serve next-generation leaders.
- Communication: Effective leaders once trickled information down the management tree. A younger workforce may prefer more direct engagement and messaging directly from the top. The use of clear, concise, and open communication through electronic resources may prove valuable.
- Collaboration: One of the old school leadership touchstones involves workers seeing that top-tier executives were willing to roll up their sleeves and do any job in the company. That image earned company-wide respect. The next generation of employees and leaders tend to consider each other as co-workers and team collaborators. Leadership respect often stems from being viewed as an equal partner who makes savvy decisions.
- Decision-Making: An organization’s top talents often believe their input should remain part of the decision-making process. This may differ from Baby Boomers who huddled with a small group of direct department heads. Next-generation leaders need to learn how to prioritize old school tactics while balancing the expectations of younger talent.
- Empathy: It’s not unusual for some industry professionals to operate on the idea that you tough-out workloads and setbacks. In other words, set your emotions aside and get the job done. That principle may be lost on younger generations and future team members. Without expressions of empathy and compassion, the result may be an emotionally frigid workplace that grinds to a standstill.
- Empowerment: Some old school leaders operated on the idea that you put people in positions to succeed based on skill and productivity. That idea won’t likely change. But future leaders will also be tasked with empowering team members to embrace the jobs ahead. Empowerment may include feeling appreciated or a sense of ownership. Future leaders will need to instill that in those around them.
Benefits of Next-Generation Leadership Development
Future CEOs and CFOs inherent a type of transitional business culture that will require high-level and flexible skills. They will serve as a bridge between Baby Boomers, their Gen X colleagues, and a younger workforce with evolving ideas about work-life scenarios.
Integrating a strategy to get next-generation leaders ready for this task calls for prompt action and an understanding of what’s at stake. Gen Xers are already moving into C-suite positions without the leadership training necessary. Organizations that want to avoid the costly setbacks of a CEO failing in 18 months would be well-served to take proactive measures today. Contact Prometis Partners today to learn more about how we can help prepare the next generation of leaders within your organization to balance multi-generational leadership skills to successfully lead your organization.