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