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July '05 Build Business: The Perfect Storm: Surviving through Succession Planning
by Ron Magnus, FMI Consulting
July 6, 2005
Editor’s note: As a new monthly contributor to ArchNewsNow.com, the Society for Marketing Professional Services is sponsoring Build Business. This series, written by industry experts, focuses on marketing and business development best practices to help you build business and advance your career.
It is 2012: Where is your firm’s talent? It should no longer be news that one of the greatest challenges facing our industry today is a shortage of skilled labor.
Although growth is projected for the construction industry, recent studies have predicted a net loss of 8 million Baby Boomers (ages 35 to 54) in the workforce by 2012. This loss will not be recouped until 2025 when the Millennial generation contributes an increase of 9 million workers to the workforce. However, the increase in population in 2025 will be too late to prevent shortages in mid- and senior-level managers from 2012 to 2025. As older workers leave the industry over the next 10 to 12 years, the skilled labor shortage will continue to be a problem (source: FMI Research Services Group, 2005).
The coming flux of Baby Boomers leaving the job market will create a tsunami effect that may suck boats (organizations) out into the ocean, leave them stranded on the beach, or even knock some clear out of the water. However, this will only be disastrous if leaders and their organizations cannot recognize and react to the coming storm.
The Coming Storm
The workforce shortage will leave many ships in peril. However, as a leader, it is your responsibility to prepare for the onset of the storm and to be ready when the tide comes back in at incredible force in 2025.
The construction industry can expect to grow by 1.1 million people by 2012, but many organizations will find themselves short of qualified talent to fill those openings (source: FMI Research Services Group, 2005). This means there will be fewer people for entry-level positions, as well as fewer individuals to fill vacant middle-management positions.
Boomers are beginning to retire right now, and by 2012, most organizations will be faced with one of the largest staffing predicaments since the 1990s. Organizations will shift from having an abundance of talent to a talent shortage.
With so many expecting to leave the workforce, another wave of problems will follow. One of the most significant of these will be leadership gaps – which will surface if senior leaders fail to effectively develop their own successors. This will snowball into another problem: a shortage of skilled workers.
Furthermore, organizations that do not currently have effective development and/or succession plans in place run the risk of losing the talent they do have.
O, Captain! My Captain!
The seaworthy captain (leader) not only recognizes this storm but also is planning for its arrival and survival. Newer leaders or those leaders with their heads down (working in the ship) may not see the impending crisis.
Batten Down the Hatches (Preparing for the Storm)
One of the best ways to prepare for this storm is to develop a method, process, or procedure tailored to your organization’s needs for succession. Whether your organization is the size of an aircraft carrier or a rowboat, the need for a succession plan remains the same. Your role as a leader is to understand, use, and champion your plan.
As a leader, you have many responsibilities. Some of your responsibilities in succession planning include working with other leaders and explaining the process to others in the organization. Furthermore, you will need to identify positions and/or employees critical to your organization and agree on the implementation plan for each position.
If your organization currently does not have a plan in place, it becomes your responsibility as an organizational change leader to promote the development and use of a succession plan. Your plan should focus on assessing current and future needs, assessing gaps between needs and current staff, and developing methods for filling those gaps. At this stage, be sure your plan focuses on talent development by addressing how you are going to get the right people in the right places. A person from the galley may not be the right person to help you navigate your boat, but they are still an important part of the crew. Then implement your plan.
It may sound easy to create a succession plan, but creating one takes strategic skill. When do you throw up your sails and when do you lock everything down? Part of knowing when the storm is coming and what to do when the storm hits is the link between the organizational strategy and the succession plan. Check to see if you are developing talent to meet the strategic needs of your organization, rather than for purely for development’s sake.
Surviving the Storm
Having plans is not enough to ensure your survival in the storm. Your organization will have to implement and maintain these plans. A critical part of succession planning is talent development, which can take many forms including coaching, mentoring, and experiential learning, to name a few. It is just a matter of finding out what is right for your organization.
Just as important as having the right talent in the right places at the right time is making sure they do not jump ship during the storm. In a recent study published by the American Society for Training and Development (ASTD, April 2005), almost half (48 percent) of the responding participants said having exciting work and challenge were key reasons for staying on the job. The top three reasons for staying on the job were career growth, learning and development (42.6 percent), and working with great people (41.8 percent).
Just because your crew boarded your ship does not mean they will not jump. What retention strategies does your organization have in place to provide opportunities for exciting work, career growth, and challenge? Do you even know what “exciting work and challenge” mean to your people?
Lasting organizations will adapt and prepare for the labor shortages to come and develop and retain the talent they already have. Your legacy as a “captain” is dependent on the impact you have on your organization and your ability to navigate this storm. What will your legacy be?
Ron Magnus is Managing Director of Denver-based FMI Consulting, management consultants to the construction industry. Magnus specializes in coaching executives and their teams to develop leadership skills through a hands-on mentoring environment. He can be reached at 303.398.7229.
The Society for Marketing Professional Services (SMPS) was created in 1973 by a small group of professional services firm leaders who recognized the need to sharpen skills, pool resources, and work together to create business opportunities. Today, the association has 50 active chapters and a membership of 5,500 marketing and business development professionals representing design, building, and related firms. To learn more about SMPS and Build Business, the SMPS/PSMA National Conference (August 10-13, 2005), click on links.
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