Organisations are not adequately prepared for the cultural changes that will occur as executives from the baby boomer generation retire and are replaced by their Generation X and Y counterparts, a study has found.
The study After the baby boomers: the next generation of leadership, by global executive search firm Odgers Berndtson in conjunction with Cass Business School, part of City University London, was conducted by interviewing senior executives across a wide range of industries and geographies.
Richard Boggis-Rolfe, chairman of Odgers Berndtson, said: “The retirement of the current generation of corporate leaders will lead to cultural changes that most organisations are unprepared for. In order to thrive in the post-baby boomer landscape, companies need to put serious thought and effort into smoothing the intergenerational transition for leaders from generations X and Y.”
Only 41% of respondents believed their organisations were ready for changing workplace demographics of age, gender and diversity. It was suggested companies should ease the transition to the next generation of leaders, by the current generation stepping back and focusing on mentoring up-and-coming executives.
Many respondents commented that the retirement of baby boomers from leadership positions would result in a mass exodus of talent over the next 20 years, which will intensify the global war for talent among existing executives.
Although the retirement of baby boomers will lead to a loss of some skills from the workforce, the next generation of leaders will bring their own skillsets to bear on the marketplace. Foremost among the new leadership skills will be emotional intelligence, people skills and flexibility, which will be needed to attract and motivate a more diverse and mobile workforce.
This more collaborative form of leadership will be key to helping executives navigate the 21st century workforce, said the report. Corporate leaders will also need greater diverse cultural awareness due to the increasing economic importance of the BRIC and Next11 countries to many of the companies surveyed.
Already, S&P 500 companies derive nearly half of their revenue from international sources and, for many, international revenues are growing faster than their core revenues.
The ability to speak foreign languages, partly as a proxy for cultural awareness, will be increasingly important. Some 85% of respondents believed being able to speak foreign languages will be more valuable to future executives than past ones.
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