Companies are working to ensure millennials are prepared to step into leadership roles.
Vikram Ravinder was a little nervous as he faced the board members of Chicago nonprofit Bunker Labs in a conference room in early December. The 29-year-old Deloitte senior consultant for strategy and operations was pitching a plan that might help Bunker secure funding for a program enabling veterans to become entrepreneurs.
Ravinder developed the pitch, under Deloitte’s pro bono program, with his mentor, Jonathan Copulsky, the company’s chief marketing and chief content officer. The two meet regularly as part of a push to have senior managers train junior employees. Copulsky, who will retire in June 2017 when he reaches the company’s mandatory retirement age of 62, has mentored several younger Deloitte executives. “I was able to put this guy in a position, give him enough ‘got your back,’ but also give him the freedom that he could be successful and coach him as opposed to directing him,” Copulsky says.
Ravinder’s presentation helped the nonprofit secure new funding. “I see how he approaches clients,” Ravinder says of Copulsky. “Millennials bring data and analytics, but boomers have experience they can rely on when the data isn’t sufficient.”
“Millennials bring data and analytics, but boomers have experience they can relay on when data isn’t sufficient.” – Vikram Ravinder, Deloitte senior consultant
Companies from Deloitte to defense contractor BAE Systems, General Motors, and General Electric are scrambling to ensure millions of younger managers from the so-called millennial generation—those born from roughly 1981 to 1997—are ready to step into leadership roles as baby boomers bow out of the workforce. About 10,000 reach retirement age every day. “Many large, older companies are caught up in a tsunami of baby boomers retiring and are unaware of how much tribal knowledge they are taking with them,” says Dorothy Leonard, professor emeritus at Harvard Business School. Leonard’s firm, Leonard-Barton Group, developed knowledge-transfer programs at several GE divisions and at the nonprofit Educational Testing Service.
Until last year, boomers made up the largest portion of the U.S. population, and Generation X represented the biggest share of the workforce. Now millennials lead in both categories: They hold about 20 percent of all management jobs, up from 3 percent in 2005, according to U.S. Bureau of Labor Statistics data.
GE runs programs in its GE Hitachi Nuclear Energy and GE Transportation units, among others. Retaining technical knowledge and capabilities is a focus, says GE Global Research spokesman Todd Alhart. ETS set up knowledge-sharing partnerships between key personnel and colleagues within the same departments, to “deepen bench depth,” according to Candyce Wright-Citrone, a Develop Core Competencies Consultant in ETS’s Chief Learning Office Group. Action plans, based on individual learning goals established for participating employees, are followed over several months. GM uses educational training and mentorships to help bridge the generation gap. It wants its leaders to function more as coaches, the automaker has said. And Bank of America has a so-called onboarding program to help new executives adapt to the corporate culture and learn from senior executives.
“In the next 10 to 15 years, we’re going to have the greatest transfer of knowledge that’s ever taken place,” says Chip Espinoza, director of organization psychology at Concordia University Irvine. An effective way to handle the shift, he says, is for a company to create relationships between the generations.
“It’s clearly an emerging area that everyone is dealing with,” says Mike Preston, Deloitte’s chief talent officer. Within a decade, maybe sooner, he says, there will be no boomers in Deloitte’s top management.
BAE, a multinational defense and aerospace company, similarly has been preparing for the retirement cliff for several years, says Andrew Muras, the company’s advanced learning manager. BAE adapted a NASA program developed a decade ago when the U.S. space agency started to lose expertise from the lunar landings as senior engineers retired. Realizing it would need that knowledge for missions to Mars, the agency asked engineers who’d worked on the Apollo mission to share what they knew in meetings with new engineers.
When BAE learns that an employee with deep institutional knowledge plans to retire, whether in a few months or a couple of years, a knowledge-transfer group of about a half-dozen people of varying ages working in the same area is formed. The teams meet regularly over months to talk and exchange advice. Younger workers elicit tips, and in some cases older ones gradually hand off tasks to junior employees. The program began as a pilot in 2013; during the past two years, BAE has expanded it across the company. It eventually wants to hold as many as 60 sessions a year.
One manager who’s scheduled to retire in April demoted himself in the process and now works as an assistant to an employee who recently joined the company from the U.S. Navy to do the job the manager once held. According to Muras, the two worked together on a bid to handle maintenance and repairs on an amphibious ship for the Navy, a contract the older worker had run for 11 years. The contract has since been renewed, with the newer employee overseeing the work.
BAE has quantified the payoff of its knowledge-transfer efforts by looking at variables such as direct and indirect costs and productivity. “We’re saving on average between $120,000 to $180,000” per project, Muras says. Devoting more time preparing millennials for leadership roles may also encourage them to stay with the company. The median tenure of workers age 25-34 is about three years, compared with 10.4 years for workers age 55-64, according to BLS data.
Catie Perrella, 26, who coordinates parts production for the F-15 Eagle fighter jet, is part of BAE’s leadership development program. “You can take knowledge from position to position,” says Perrella, who joined the company in 2011 and is enrolled in an MBA program at Boston University. “I’ve had a lot of friends who leave a company after two or three years, but BAE has so many opportunities within the same walls,” she says, that she can advance her career by staying put.
The bottom line: Companies that don’t plan for generational management shifts risk falling behind and losing out to their competitors.
This thought piece is courtesy of Jeff Green and Bloomberg Businessweek, Bloomberg.com / Jan 21, 2016