As baby-boomers exit the U.S. workforce, businesses are bracing for a dramatic increase in retirement rates, as well as a widening gap in corporate knowledge and leadership. In fact, between 2002 and 2012, the Bureau of Labor Statistics predicts that more than 23 million workers will leave the labor force—the greatest number in history. Perhaps more compelling is the corollary, that more than 40 million new workers will enter the workforce during that same time frame. This massive swing in labor resources over the 10-year period creates risk and opportunity for employers of all shapes and sizes, particularly as senior leadership reaches retirement age and organizations look to the next wave of leadership development. Compounding the challenge is the increasing willingness of employees, middle management in particular, to jump ship after a particularly harsh economic lull.
Chief learning officers who understand these new dynamics must prepare for the resulting change in leadership requirements. Companies should organize around five key pillars to enable the next wave of leadership development:
- Learning Environment: Look to create flexible and sustainable learning environments.
- Communication: Improve corporate communication and information dissemination.
- Trust: Build cultures of trust.
- Advancement: Develop the mechanisms to successfully promote and monitor manager advancement.
- Visibility: Provide greater visibility into the business for middle management.
This article will examine each of these areas, focusing on key strategic and operational measures that can, and should, be taken with the help of technology to ensure that companies are better prepared to address the looming leadership challenge.
Creating a Learning Environment
Often, too much weight is placed on the softer side of learning. While training, communities of practice and mentoring all have valid roles in the enterprise, the return on “soft” investment is difficult to track, tough to validate and uneven in its ability to impact the workforce. Yet companies have invested significant capital in course design, distance learning and training software to try to facilitate this type of learning. The disconnect between the return on investment and the money actually spent offers clear insight into the reasons that budgets for these initiatives are increasingly difficult to justify.
The issue with most training regimens is that they are simply a single instance of instruction with little residual impact. The employee attends, gets tested and passes (or gets certified), and puts the courseware on the shelf until the next time. The information delivered through training typically is focused on a specific job skill or objective, and is delivered out of context in relation to the rest of the organization. Although many companies have used some of the better-known e-learning toolsets to help with training delivery over distance and archiving, this mostly impacts cost of delivery, not necessarily effectiveness.
Enterprises are comprised of myriad interrelated processes and transactions that occur in series or in parallel between employees, partners, materials, equipment and customers. The more middle management understands the impact and context of the transactions in which they are involved, the more inclined they become to learn about the rest of the enterprise. Many companies make a critical mistake by assuming that middle managers should be constrained to their specific area of the business, rather than gain a greater understanding of the business as a whole.
That fuller understanding and shared vision of the organization can be achieved through technology, but only when that technology is closely linked to business process and context. We’ve seen whisperings of this technology assist in software such as knowledge management and portals. Companies are beginning to invest in technologies that capture and deliver the information on how business gets done at a process and activity level, linking those activities to the precise resources that employees use to do their jobs. This information helps to form a business-operating model that can be communicated on an ongoing basis.
A detailed approach to documenting and organizing enterprise knowledge should be process-centric. Focusing on the process generates a more effective model for learning because it provides a context for each and every activity. Once processes are documented, no one needs to guess about how the business operates. Information can be shared across the organization for others to navigate and reference as required by their own roles, not only affecting existing employees, but also serving as a mechanism to more quickly on-board new ones.
Communication and Information Dissemination
The most effective employees are the ones who are able to translate company goals into the types of strategic, operational and tactical decisions that are made all along the management chain. Employees, especially middle managers who typically accept the burden of translating ideas into action, can benefit from a common and clearer understanding of the relationship between decisions made at the highest levels and the impact those decisions have down on the shop floor. This is not about knowledge management initiatives that at best help to capture best practices, and at worst cloud decision making with a lot of irrelevant information. It is about creating a shared view of the organization—one in which managers have better visibility into the impact of their activity as it relates to their peer’s activity, even though that peer may be miles away and in an entirely different silo of the organization. Many companies are uncomfortable with the sharing of strategic information, and it should be the chief learning officer’s mission to break down that mistrust and find the mechanism best suited to disseminate it.
Breaking down the barriers within an organization requires that detailed knowledge–business expertise about how the organization operates–be captured effectively, organized consistently and then easily shared so managers can actually operate around the information. Many companies understand the important role this type of knowledge plays, but struggle with how to really solve the problem. (See Figure 1.)
Some companies seeking to capture information invest in business process management (BPM) technology to model the way the organization works. Others expend effort on organizing business information through content management technologies or invest in portal technology to kludge everything together in a user-friendly Web interface. Still others invest in workflow and transaction-oriented systems, in the hopes that productivity gains will lead to more time spent on the non-automated aspects of the business.
Unfortunately, these efforts rarely are united into a common environment, even in a superficial way. For example, the business process team may capture a great high-level model of the business, but employees are left wondering how to operate around the charts, graphs and arrows once the result of the modeling is communicated. CLOs should serve as a bridge between these measures, ensuring that new projects or initiatives in one area leverage the investments already made in another. The best mechanism for disseminating information combines discipline and rigor to extract process information in a consistent manner, with a portal framework that can disseminate the information in context.
Building a Culture of Trust
Companies that have invested in technology to support learning and have made attempts to improve dissemination of information are well on their way to building a culture that cultivates trust. Middle managers should be empowered to perform their jobs and manage their teams in support of the goals of the organization. But too often, managers are not connected closely enough to those same goals, lacking the context to operate around them.
Mistakenly, senior management sometimes views the corporate strategy as an annual process and not the operating mantra that it should be. It is senior management’s job to provide a context to middle management and clearly communicate their strategic plan for doing battle in business. Strategic planning done well takes into account not only internal realities, but also external realities. A complete planning cycle evaluates many more data points than middle management has access to, or even the means to analyze. The value is in sharing that information. What’s lacking is a mechanism for senior leadership to effectively flow down its plans, the reasons behind them and the factors that influenced the development of those plans in the first place. So the brightest middle managers in the organization, often the most curious, use their own means to uncover kernels of management’s plans and place them into their own context. This is hardly scalable, and always incomplete.
Companies should aim to meet their middle managers at least halfway. Broad dissemination of corporate strategy as it is renewed should take place in a timely manner. Middle management should be encouraged to interact with and incorporate the details of strategic planning, regardless of their area of responsibility. Allow them to help reengineer core business processes in support of the strategy. Ask middle managers for their recommendations on process improvement and inefficiencies, and confirm that you are listening by taking action on the best ideas. When middle managers feel like they can truly impact the business, they recommit themselves to the goals of the organization.
Using emerging process-oriented collaboration technologies, business users can create a framework that takes corporate goals and strategy and explicitly connects them to the operational and tactical activities that take place beneath each layer of process. This helps establish a context and gives middle managers a peripheral perspective of the other processes they are impacting.
Flowing strategy down to the tactical level motivates your middle managers and builds trust by connecting them more closely to the business. It also ensures quicker ramp-up around corporate goals and objectives as they evolve, improving productivity and results toward those same goals.
Monitoring Growth and Leadership
Almost every enterprise has a system in place for monitoring employee growth and achievement. Often, this manifests itself in the form of annual performance reviews. These are conducted top-down. Many organizations will invest in additional mechanisms for peer review of more senior staff, including 360-degree reviews or leadership assessment tests, among others.
These examples of annual testing regimes typically fall short of the mark. Don’t misunderstand, they are important to the business for a whole host of reasons, but in terms of leadership development, these mechanisms are really just moments in time that mostly look backward and don’t provide a comprehensive accounting of the middle manager’s understanding of the business and ability to execute.
Compounding the problem, many middle managers and their bosses see annual reviews as a painful administrative burden, not as an opportunity for discovery and improvement, as human resources managers would like to believe. Also, management churn frequently leaves the middle manager in the position of being evaluated by someone they’ve worked with for far less than the full-year period of the review.
In combination, evaluation, peer review and mentoring programs can work. However, the real challenge in identifying future leaders from the ranks of middle management is being able to evaluate them on a continuous basis. Additionally, there are other leadership traits that are difficult to capture through the typical review process, such as recognizing innovation and determining which managers are best at bending the rules to get things done. A well-architected and -implemented technology solution can help identify, implicitly and explicitly, activities and subject-matter expertise among managers on an ongoing basis. This allows executives to evaluate and identify leaders based on their actions, not just words.
Providing Visibility Into Opportunities for Growth
The January 2004 Employee Tenure Report prepared by the Bureau of Labor Statistics notes that workers in management, professional and related occupations had a median tenure of five years. Turnover rates are even higher for younger workers, who form a large portion of middle management that will ascend to future leadership positions. (See Figure 2.)
Some of the most significant factors leading to improved retention are tied to satisfying the innate human needs to learn and grow. In the frequently referenced September 2003 Job Recovery Survey, conducted by the Society for Human Resource Management and The Wall Street Journal’s Web site CareerJournal.com, study participants identified “dissatisfaction with career development opportunities” and “ready for new experience” as the second and third reasons, behind compensation, for conducting a job search. Explanations like boredom and looking for a career change weren’t far behind.
By providing peripheral visibility across the organization into other business processes, people, assets and business drivers, middle management is given the best chance to innovate and bring their own fresh perspective into the business. Exposure to the framework around the way the business operates encourages your best employees to look within the organization rather than outside for growth opportunities. The technology to capture process information effectively and consistently exists. It’s in the area of organization and usability of that process information where technology is evolving, driven to a large extent by the Web and technologies like XML.
The Bottom Line
Statistics on employee churn and management job dissatisfaction are more compelling than ever. The massive swing in labor resources as the baby boomers retire and Generation Y enters the workforce represents the largest changeover in U.S. history. Tomorrow’s leaders will ascend from today’s middle management ranks, and companies will need to transform themselves by focusing on the five pillars–learning environment, communication, trust, advancement and visibility–as well as the common thread that binds them, culture. Chief learning officers ultimately must take the lead in helping their companies to evolve, adapt and address future leadership requirements in this increasingly dynamic employment environment. Technology that captures, organizes and disseminates the multidimensional aspects of how the business operates will play a key role as an enabler for this transformation.
David Austin is president and COO of Contextware, a software company that provides process-driven solutions for learning, knowledge management and business operations. He can be reached at firstname.lastname@example.org.