HR.com's Thought Leaders for April 5, 2007

KE: Rick, your colleague, Dr. Bruce Sevy, was my guest on a webcast last year where we talked about the results from your 2005 survey, "Best Companies for Leaders."  We are really glad you have joined us to talk about this year's survey results, how they compare with last year's, and also the implications going forward.  For those who are unfamiliar with the study and its purpose, why don't you give us a little background?

PL:  For the last few years Hay Group®, in partnership with CEO Magazine, has conducted a survey of the world's most admired companies when it comes to leadership development. It is quite clear that no matter where you look in the world, organizations are facing what is often termed a massive leadership tsunami.  There is, in the US alone, a projected 30-million person gap that we will face over the next five years as we look to replace some of the key leaders who are moving toward retirement.  Much of the gap is driven simply by demographics.

There is a huge wave of baby boomers that are nearing retirement. When they leave, they will be taking with them lots of organizational knowledge and experience and leadership capability that isn't easily replaceable, certainly not in a short period of time. Based on our global surveys, most organizations are recognizing that there are going to be significant leadership gaps and that these gaps will have a direct impact on their ability to continue to grow and develop their business. This is true across industries, from finance to pharmaceutical, within public service or healthcare. Even within education, for example, the biggest challenge the UK, here in Canada and in the US is finding head teachers and school principals.  What we also know is that it is becoming harder and harder to make senior leadership roles attractive for people so that they want to move into them. 

Organizations are starting to see the signs of this gap. In doing this research, I was able to think about our own organization, the Hay Group. We are a global organization, we have almost 3,000 professionals globally and one of the things that has become very apparent is that almost 75% of our senior most professionals will be ready for retirement within the next five years. We are working on ways to capture all of this wonderful intellectual capital that potentially may be moving on in as little as five years.  And it takes time to develop that kind of expertise.

The other thing to know is that this challenge is not just isolated to the west. In developing countries such as India and China, the vast majority of the population there is younger than what you tend to find in Western countries. They have a massive amount of young people and need to find rapid ways to develop them so that they can take on a growing number of senior level roles that these organizations need in order to bring their organizations into the global economy. For example, a number of organizations that we surveyed, in particular in Asia, are having real trouble being able to staff call centers to meet
the massive demand in that region of the world, and what we are finding is a reverse outsourcing back into places like Europe and North America.

KE:  What was it that prompted you to begin this study on the best companies for leaders?

• The distinct stages of career development of knowledge workers.
  
• Why knowledge workers may struggle as they move from one stage to the next.
  
• Why some workers get stuck in their career and why this causes their performance to decline.
• How to get the most from knowledge workers in each stage of their career.