Friday, July 31, 2009

Developing the Next Generation of Leaders (Part 1)

Our industry is facing a substantial talent drain in the next 10 years. More than one-third of our workforce is over 50 years old, with perhaps 15-20% approaching retirement. Undoubtedly those statistics impact the ranks of firm owners and managers the hardest. Are we prepared to pass the torch of leadership to the next generation?

I have encountered few firms that have any kind of formal leadership development process in place. Ownership transition is a hot topic in our industry, but firm principals seem less focused on the equally daunting challenge of leadership transition. The time to make this a priority is now, even in a weak economy. Leadership transition is only one reason why your firm should have a structured process for developing new leadership:
  • Besides the need for future leaders, most firms lack adequate "leadership bandwidth" to effectively meet the growing challenges throughout their organization.

  • A strong leadership development program is a valuable asset in recruiting and retaining top talent. The younger generations generally want to advance at a quicker pace than us Baby Boomers did--and they'll need to given the aforementioned demographics.

  • A formal leadership development program provides an excellent forum to reinforce and clarify corporate values and priorities. This is important in building a sustainable firm culture and enduring competitive advantage.

So where to start? Let me suggest a basic framework for thinking about leadership development and some important do's and don't's.

A Three-Pronged Approach

Leadership development is a complex undertaking and long-term commitment. You can't develop leaders by simply sending them to a seminar or promoting them into a management position. I recommend a comprehensive three-pronged approach:

  • Choose the right people
  • Establish a formal process
  • Create a supportive culture

Over the next three blog posts, I'm going to offer some advice for each of these, drawing on my experience helping firms create leadership development programs.

#1. Choosing the Right People

Clearly one of our problems has been elevating people to leadership roles because of their technical credentials rather than their leadership skills. The best potential leaders in your firm may not be the strongest technically. They may even come from a nontechnical background. Indeed, the number of A/E firm principals without a technical background more than doubled from 2000 to 2005 according to a survey by ZwiegWhite.

So what traits should you be looking for? Following are the ones that I believe matter most:

Welcomes the leadership challenge. There are too many reluctant leaders in our business. We need leaders who will embrace the challenges and commitment required, including the prospect of giving up some (or most) of the technical aspects of their work.

Strong people skills. Taking initiative and making good decisions are obviously important leadership traits. But keep in mind that leaders cannot succeed without the active, willing involvement of others. Leaders must have the ability to effectively engage people in getting things done.

Change agent. The ability to implement positive change is an imperative for leaders. We don't need leaders to maintain the status quo, which unfortunately is what many of our supposed leaders do. Change is mandatory for growth, improvement, and innovation--and aren't these the ingredients of real success?

Thinks like an owner. This implies many things, from having an entrepreneurial spirit to being willing to take on tough challenges. It also refers to the ability to lay aside personal agendas for the good of the company. Unfortunately, this trait is not as common among principals and other managers as you might expect.

Focused and disciplined. Effective management of time and attention is among the most critical leadership skills. We have limited reserves of both. Strong leaders exhibit a tremendous ability to focus their efforts on what matters most and to maintain that focus over the long term.

Continuous learner. Some senior members in our ranks are too smart for their own good. They no longer have the drive to learn new things, or to open their minds to different ideas and approaches. They make poor leaders. Good leaders are constantly seeking better ways of doing things, hence they never stop learning.

Makes others better. An effective leader is best judged by the impact he or she has on others. Leaders inspire, mentor, and hold accountable. They recognize that helping others improve requires a substantial amount of their time. The best leaders are passionate about helping others grow and perform at their best.

Some things to avoid. In seeking to identify leadership potential within your firm, the following will help you avoid the common mistakes that other firms make:

Don't place too much weight on seniority. Pick the best people regardless of age, seniority, or technical credentials (unless those credentials are essential to that specific leadership role).

Don't fail to seek input from those who work mostly closely with leader candidates. Sometimes corporate managers have an incomplete picture of how well a candidate interacts with or is regarded by his or her closest colleagues.

Don't limit choices to people who are like the firm's current leaders. There is value in broadening your leadership bandwidth with different perspectives and abilities.

Don't overlook lackluster results because the candidate is likable. There are many who can "talk the talk" but don't "walk the walk."

Don't forget that everyone is watching. Be sure to communicate to staff what is expected of leaders, and then act consistently with those expectations.

Having selected the best candidates, now what? In my next post, I'll discuss some ways to build a formal leadership development program. Stay tuned.

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