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We have written a great deal about why it is high time to accelerate efforts for recruiting, hiring, training and retaining millennials to fill both existing skills gaps and corporate succession pipelines. Today, we want to talk about why it is even more important to begin grooming more millennials for corporate leadership roles and how to develop young leaders effectively, cost efficiently, and with minimal risk.
According to the Global Leadership Forecast 2014/2015, a joint in-depth research effort by Development Dimensions International (DDI) and The Conference Board, millennials are stepping into leadership roles at staggering rates — between 21% and 30% of corporate leadership roles are now filled by millennials, according to the study. Even more interesting is that millennial leadership appears to correlate with corporate growth rates:
“Aggressive-growth organizations, such as those in the high-tech industry, have a significantly higher proportion of Millennials (30 percent) in leadership positions than organizations with cautious growth (25 percent) or low to no growth (21 percent).”
The report cautions, however, that fast-growth companies with greater numbers of younger leaders may also be assuming greater risks:
“Millennials report being less engaged in their roles within their organizations. Also, they are more likely to intend to leave in the next 12 months than leaders in other generational groups.”
We have addressed the myth of millennials’ disloyalty in other posts. For now, suffice to say that, regardless of potential risks in grooming millennials for leadership positions, corporations really have little choice as weak leadership inevitably leads to failures in execution. Strong leadership prioritizes new initiatives and innovation, sees and mitigates risks, and nurtures external relationships to create and maintain opportunities for new business.
Human capital, according to the Global Leadership Forecast report, is among the top four things “keeping CEOs up at night.” What is more, the study finds ONLY:
The researchers suggest that a big reason for these weak stats is that:
“…leadership development efforts have stalled, despite the fact that it is estimated that some $50 billion a year is being spent on developing leaders worldwide. As in the last two forecasts, only 37% of leaders in the current study rated their organization’s leadership development program as effective, indicating no improvement over the past seven years.”
Another intriguing observation by the researchers is that a widely accepted ratio for leader training in terms of learning types — 70% on the job, 20% learning from others, and 10% formal learning — matches neither the current reality of leadership training (55:25:20) nor the ratio employed by companies who rate effectiveness of their leadership training most highly (52:27:21).
“From all these data, we concluded that overreliance on 70:20:10 misrepresents leaders’ reality and doesn’t match the practices of organizations with the highest-quality development or what leaders themselves prefer. Even more problematic, the 70:20:10 ratio — in fact any ratio — emphasizes the separation of learning methods rather than their integration. Allowing learning methods to compete rather than integrating them so they can build on one another undermines their impact and their value.”
The researchers’ key points about rebalancing and integrating key leadership learning methods needs emphasizing and jibe closely with our own direct experiences in building and managing the Genesis10 Associates Program (GAP)*. There is plenty of research documenting the overconfidence of millennials about their skills and capabilities upon entering the workforce. For example, a Chegg study titled Bridge That Gap: Analyzing the Student Skill Index found that:
“When it comes to business basics, students’ assessments of their own skill-mastery exceeded hiring managers’ assessments of recent graduates they have interviewed, on every measure.”
Where 63% of students believed they were very- to completely prepared to “incorporate information to develop strategic insights,” only 46% of hiring managers agreed with that assessment. Similarly, while 67% of students felt well prepared to “manage a project by identifying key steps, resources and timelines,” again, only 46% of hiring managers agreed.
A big challenge for corporations is that many of the soft skills needed for effective leadership cannot be taught in a classroom and it is far too risky to rely on people acquiring critical skills independently and/or informally via on-the-job training. Our own solution for bridging gaps in the types of soft skills needed for effective leadership involves heavier-than-average emphasis on direct mentoring and coaching — a big increase in the proportion in the middle number of the ratio, which represents learning from others.
Choice of mentors is hugely important as well. It’s not a person who sits in HR. Rather, it’s a person who has been active in the field of interest and who possesses so-called tribal knowledge — undocumented insights and ‘rules of the jungle’ that can help younger leaders learn to communicate and collaborate effectively, win respect and gain influence and capacities for persuasion and change management. For example, while there is plenty of classroom and book training available for project management, there are also many subtleties that divide effective from ineffective project managers. Mentoring is the missing link for conveying those nuances. According to the Global Leadership Forecast 2014/2015,
“Only 59% of HR leaders indicated that their organization has a mentoring/coaching program specifically designed to address high potentials’ unique needs. Yet, when asked what development practices most affected leadership development quality, high-potential leaders selected mentoring by a high margin.”
The role of the mentor is to provide personalized feedback in specific situations. ‘Here is what went really well in the presentation. Here is what you could have done better. Here is how I see your strengths. Here is what will make you more successful the next time you attempt this thing.” Other key leadership skills best taught through mentoring and coaching include abilities to prioritize, to cope with change and disruption, and to sift and synthesize information into actionable intelligence.
High-quality mentoring is also a key component in lowering risk and increasing leader retention over time. In our experience, millennials working without role models who are engaged in their careers often become disillusioned and lose faith in their companies, which is when they begin to look around to create their own professional growth opportunities. After our GAP program introduced dedicated mentoring in 2009-2010, our retention rate for millennial talent shot up dramatically.
Another interesting stat from the Global Leadership Forecast is that companies believe they are weakest at leading across borders, cultures and generations. Because millennials and the generation that will follow (Generation Z) are so different from Boomers and Gen Xers, it is crucially important to train leadership personnel specifically to work in multigenerational environments and teams. Demand for this type of training is rising rapidly among our clients and corporations need to become more deliberate about making cross-generational collaboration happen.
Many other things need to change. Performance evaluation and recognition, for example, needs to become far more frequent and instantaneous to mirror the younger generations’ daily feedback experiences in social media. Structured capabilities for change management are also needed.
Finally, corporations need specific strategies and structures for ensuring that knowledge transfers effectively during on-the-job training and mentoring. This is something we do with GAP placements already; we work with the managers to ensure there are always clearly stated goals and that our associates habitually attain them.
The stakes are high. Grooming millennials for leadership roles is not a challenge companies can afford to ignore. Corporations must communicate this priority to their existing leadership, introduce mentoring, and encourage more cross-generational teamwork.
* The G10 Associates Program (GAP) is a workforce optimization solution, which helps our clients acquire and develop top millennial talent for the next-generation of corporate leadership.