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Recruitment & Retention

Published May 2008

Is the Looming Leadership Shortage Just a Big Fat Lie?

Ron Garonzik and Scott Spreier

If you've been exposed to any business media over the past year, you're no doubt aware of the impending global talent shortage. The story goes something like this: With millions of baby boomers retiring and fewer Gen Xers and Yers available to replace them, a crisis of biblical proportions is about to overwhelm us. Organizations will have to scramble and compete to find new talent — especially managers and executives — to replace the current crop, resulting in skyrocketing costs and potentially declining performance.

The numbers don't lie, at least according to various pundits, consultancies (including our own) and search firms. It is, they claim, going to be one of the biggest issues business must deal with in the next decade. And yet, like global warming, this "looming crisis" seems to be falling on the deaf ears of many of its potential victims — most of whom have done little more than express concern while frantically pumping the same old played-out talent pools they've been drawing from for years.  

So what's the deal? Are organizations fiddling while Rome Inc. burns? Or are we experts just opportunistic Chicken Littles, terrorizing the business barnyard to make a few extra kernels in consulting and search fees?

The truth, as usual, lies somewhere in the middle: Yes, there is a potential leadership shortage looming on the horizon. A number of organizations we've worked with say they can't find enough talent to resupply their dwindling management ranks. But many of these same organizations could avert or at least minimize the issue if they stopped their hand-wringing and rethought their approach to selecting, developing and managing their talent.

Organizations need to start thinking of leadership talent as the dwindling natural resource it is. Rather than simply running around looking for additional supply, they need to rethink their approach to demand — the unique accountability requirements of key positions critical to running the business. They also need to revamp the "refinement" process — how they turn raw talent into successful leaders — and do a better job of conserving their resources.

No one would argue that you need to keep the proverbial talent pipeline full to decrease the odds of a shortage. But full of what? Traditionally, leadership potential has been viewed as a one-dimensional resource. Beyond some differences in technical skill and experience, a leader was a leader, no matter what the position. But over the past decade, as organizations have grown in complexity and size, many of these once-similar roles have become highly diverse, requiring diverse sets of skills and competencies.  

Given that many organizations have overlooked or neglected this sea change, it's not surprising that a growing number of their managers and executives find themselves struggling and failing, and in the process inflicting great damage on themselves and their organizations.