Rapid Response

A leader’s tool kit in the new economy should include the ability to adapt nimbly to shifting workplace scenarios.

Marilyn Gist, Ph.D | January 2012 | FROM THE PRINT EDITION

To survive the recession, most businesses tightened staffing in response to shrinking margins. The national picture now reveals modest monthly job growth. A number of local firms also have announced hiring increases for this year. To people seeking jobs and to businesses eager to expand, this is great news. Change cannot come too quickly.

However, as we emerge from this recession, leaders will find it challenging to match productivity to incoming work. Not only has the business landscape changed, but so has the labor force. Now evident are four key challenges creating pressing needs for adaptive leadership.

The first is that some firms are too lean to expand quickly. Some companies made very deep cuts in their workforces. Others restructured operations and narrowed their technological capabilities or product lines. Still others outsourced parts of production. These strategies worked well in a weak economy, but may prove limiting in the near future. As demand increases, firms that cannot ramp up easily will lose market share and revenue to competitors who can. Although temporary agencies might help, the talent available will not be adequate for all firms. Instead, organizations need to devise staffing scenarios to fit projected levels of revenue growth.

A second issue will be turnover. Employees have been relatively loyal during the recession because of the scarcity of jobs. Turnover can be expected to grow in the next few years. Employees who feel overworked, underpaid and disrespected are already looking for new situations. It is time to clarify how your organization helps others, to structure jobs to be more interesting and to adjust compensation.

A related concern will be a high rate of employee retirement as baby boomers activate plans that were postponed when housing and stock values declined. Unfortunately, disproportionate losses will be felt at senior levels that rely on boomers’ deep experience. And the exodus of senior talent will be hardest to bear in knowledge-based industries.

Finally, it will be challenging to match skills to hiring needs. Much of our future growth is expected in jobs that require higher or specialized education, such as in the health and technology sectors. Our high unemployment rate masks the fact that many jobs requiring education or higher levels of skill are hard to fill. Because the baby boom generation is far larger than the groups behind it, a talent shortage would naturally be expected. However, younger generations express stronger values for work-life balance and for work that contributes to the larger social good, so they are also selective.

As the economy improves, these challenges must be addressed if firms are to seize new business opportunities. How can we develop the next generation of knowledgeable employees and senior leaders? Although there is no quick fix, it is important to begin now to provide on-the-job training and cross training to motivate and strengthen your workforce. Providing progressively challenging work assignments is part of this picture. Compensation reviews, career planning and opportunities to learn and contribute should reenter the management vocabulary.

External executive education is equally important for developing top talent. An MBA is valuable for providing broad-based business knowledge. However, an executive MBA is better for high-potential managers because it provides strong cross-industry exposure at strategic levels. This expertise helps significantly as leaders formulate strategy and navigate growth in global economic and market conditions. It is also critical to provide high-quality leadership development. In addition to on-the-job experiences, a leadership EMBA program can offer formative experiences concurrent with business education. Graduates of such programs tend to affect their organizations positively and advance quickly.

Whichever mix of tactics we use, the time is right for addressing employee and leadership development. Those who delay are likely to find that, when the tide comes in, it is simply too late.

Marilyn Gist is executive director of the Center for Leadership Formation at Seattle University’s Albers School of Business and Economics.