Where Have All the General Managers Gone?

In logistics, just-in-time (JIT) deliveries are scheduled to arrive at the precise moment items are needed for assembly lines or retail sales. Any break in the supply chain results in empty shelves or parts bins and a consequential loss in revenue. Leadership pipelines are similar. Gaps in the talent development system can leave organizations short of individuals who have been carefully groomed to move quickly into senior roles just as they are needed.

“As economic conditions improve, organizations are realizing they face a talent gap that will hamper their ability to grow the business.”

As economic conditions improve, organizations are realizing they face a “talent gap” that will hamper their ability to grow the business. With few exceptions, the clients I work with today are concerned about their ability to maintain an uninterrupted flow of talented individuals at the general manager level who can be “called up” to the corporate team as opportunities arise.

“The general manager position is an excellent stepping stone for advancement to the senior executive ranks. It provides a solid foundation for the next phase of intense development and experience necessary to fully prepare individuals for the C-suite,” says Denise Morrison, president and CEO of Campbell Soup Company.

During the recent downturn, however, many organizations sold off or consolidated their smaller businesses, thus eliminating opportunities for GMs to hone their skills by overseeing a business unit’s marketing and sales functions, as well as the day-to-day business operations.

The largest Fortune 500 firms like Proctor & Gamble or GE, have both well-funded programs and a wealth of GM development opportunities they can exploit as conditions warrant. Executives move in, grow and move up on a continual talent-development cycle. However, most companies don’t have that luxury. So what can the average-sized organization do to leverage its expansion scenarios?

Even now, some senior leaders still haven’t made the connection. In a recent RHR International research study, fewer than 50% of senior executives polled agreed that their organization is effective at developing the next generation of leaders. In fact, developing talent and building succession plans are routinely rated as the areas in which companies are least effective. More troubling, though, is that these items are also rated lower on “importance,” meaning that the teams recognize it as an issue, but it’s not the most pressing item on their agenda.

“Fewer than 50% of senior executives polled agreed that their organization is effective at developing the next generation of leaders.”

CEO Acts as Culture Catalyst
Just as JIT systems require that the retailer at the end of the supply chain can accurately predict demand for its products, companies should begin thinking about future general managers in their earliest stages of recruiting and make their development a priority on an ongoing basis. This requirement goes beyond the scope of the human relations department and should be made part of the leadership culture by the CEO. The companies that do this well talk about it all the time; and as a result, they have a solid pipeline of general management talent and other senior staff leaders, as well.

Dynamic Leadership Progression
Development programs need not be highly structured and formal, but they should be aligned with the strategy and culture of the company. Think of executive development in three stages, with general managers in the middle. Early development (feeds into GM role) focuses on instilling a generic set of leadership skills and sharpening technical ability. Success at the general manager level answers the question of which leaders can make the critical transition to senior levels. High performance as a GM indicates that an executive can be developed for specific corporate roles.

When opportunities for revenue growth appear, it is vital that organizations have talented individuals developed, seasoned and ready just-in-time to meet the challenge.

Dr. Thomas J. Saporito: Dr. Thomas J. Saporito (tsaporito@rhrinternational.com) is chairman and CEO of RHR International, a global firm committed to the development of top management leadership.
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