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PCCA Journal|2

nd

Quarter 2010

28

purchased for them, the shared experiences, and all

the coaching and correcting that you and others have

invested in them?

These employees probably embrace your company

culture and live out many of your corporate values,

which they have learned over time through blood,

sweat, and tears. These “sunk costs” are what make

your “most valuable asset” valuable to you. As you

wrestle with how to stay in business, consider this

“investment” cost. What would it cost you to start all

over with new people? Because the start-up cost of

new hires will likely be much higher than the start-up

costs of the players that you let go, the aggregate cost

and time of replacing staff is quite large and can be up

to 2.75 times the investment that you made in the old

team. The best long-term business decision is option A

unless your situation is quite desperate. Now go a step

further. If you decide to continue to invest in your ex-

perienced team, ask yourself, “What can I do to maxi-

mize the investment I have made in these people?” The

answer is to continue to develop them and make them

even better.

Now is strategically the best time to invest in the

development of your people. The demographics of our

industry are changing, with only a short window of

opportunity to prepare. Baby Boomers (born from 1946

to 1964) make up about 45 percent of the workforce

and are 77 million strong. While some are delaying

retirement plans due to the recession and loss of retire-

ment funds, the ticking clock still poses a problem.

Some Boomers are retiring, and many more will as

soon as they are able. Generation Xers (born from 1965

to 1980) make up about 40 percent of the workforce

within a cohort of only about 49 million people. They

are assuming the leadership positions as Boomers

retire, but there are not enough of them to fill all the

empty seats. Millennials (born from 1981 to 2000ish)

make up only about 10 percent of the workforce, but

there are more than 73 million of them. As more of

them enter the workforce, they will be required to step

into leadership roles sooner then any generation before

because of the vacancies left by the Boomers as they

leave the working world. Most of these Millennials are

nowhere near ready for such roles.

The current economic downturn provides precious

time to execute a transfer of knowledge and expertise

from Boomers to Xers and Millennials. This might be

the only good thing about the current economic condi-

tion (See Exhibit 1 below). There are plenty of internal

options for this transfer of experience. Many compa-

nies already have mentoring programs, one-on-one

and group coaching, rotational programs for “high-

potentials,” and special assignments with a seasoned

leader. The object is to transfer real-life experience

from those with more than 25 years in the business.

In most cases, this means from Boomer to Millennial.

The upside of this information/experience transfer op-

portunity is significant. Done correctly, the trauma of

management/ownership succession can be minimized,

and your business can continue to thrive (or begin to

thrive). The fly in the ointment is that most Boomers

(and Xers, too) are very busy and do not have the skills

to adequately pass their knowledge to the next genera-

tion of leaders. Many will try to find a way to make it

happen, but most companies need some help.

The days of “sink or swim” learning are over. Letting

people fail is just too expensive. Your projects are too

complex, too costly and the margins are too small to

contain any mistakes, politically or financially. There

is just too much at stake. You need to provide some

expert lessons to transfer knowledge and experience to

your future leaders. You need to provide education and

training to give them the skills and abilities they need

to be more effective and to manage risk so that you can

stay in business.

Determining the training needs of your people is

not an easy task. You could commission a formal

competency assessment to determine specific train-

ing needs for each individual in the company. This

allows decision-makers to target their training dol-

lars and select courses that will give them the biggest

return. Without a formal assessment process in place,

determining the training-dollar allocation can be hit

and miss. Jerry Porras, author of

Success Built to Last:

Creating a Life That Matters

, provides a framework for

determining training needs. He contends that if there

is something that you like doing AND you are good

at, you should do it. The converse is if you do not like

doing something and are not good at it, you

should avoid it. In theory, this is the road to

long-term personal success. Unfortunately,

we rarely have that option. There are many

tasks that we NEED to do, that we do not

like doing and/or are not good at doing.

Exhibit 2 takes Porras’ idea and tweaks it to

create a matrix that has two axes: “Need”

along the vertical and “Skill Level” along

the horizontal. The intersections create four

An Upside to the Downturn

Continued from page 27

Continued on page 30

Exhibit 1

Populations by Generation

Boomers

Xers

Millennials

77

49

73

Current Total Population

Millions

Current Workforce Population Breakdown

100% = Total Workforce

40%

45%

10%

5%

Boomers

Xers

Millennials

Other