America's looming macro-succession crisis: Boomers, Xers, Millennials and the future of your workplace

I was recently re-reading a Seattle Times story from a couple years back on how men in their 30s are earning less than their fathers did. An interesting story top to bottom, but the concluding section drew me back around to something that I really haven't talked about enough lately - the looming generational macro-succession nightmare facing corporate America. It's impossible to say precisely how many businesses are going to feel the bite - or already are - but my best guess is somewhere between "many" and "most."

This part you may have heard before:

Diehard careerist baby boomers also might partly explain the inability of 30-something men to move up the income ladder as quickly as their fathers. From the moment Generation Xers entered the workplace, boomers have been the "ceiling" blocking their way up the income ladder, said Peter Rose, a partner with marketing-research company Yankelovich in Los Angeles. "The boomers stand out in defining themselves in terms of their work and have shown a disinclination to get out of the way," he said.

First, let's make clear that this is purely and simply a math question. There are X number of leadership and management jobs and X+1 Baby Boomers, and a good many of the ones I've worked for (including my current boss, may she never retire) are doing an awfully good job. So the ladder-blocking described above isn't a function of anything negative - it's just that there are so many Boomers that they represent a ceiling that many Xers can't get past.

Further, since Boomers represent perhaps the vastest institutional knowledge base of any generational cohort in the history of the world you can't argue that companies should want them out of the way. As valuable as this collective body of expertise is, though, it does come with a hangover. There's a basic numbers crunch that's about to hit, and it's going to throw a lot of companies into leadership transition crisis. Consider:

• The Baby Boom was huge - depending on how you slice the numbers, the Boom Gen is around 75 million strong.
• The leading edge of the Baby Boom was born in 1943, which means the first wave hit 65 - the traditional retirement age - over a year ago. Over the next five to ten years American companies will lose more than half of their leadership and management personnel, and a good chunk of what they know will be walking out the door with them, never to return.
• Boomers dominate American corporate leadership. There are some Xers in power (the front edge of X is currently 48 years old), but not many. And a lot of the ones who are in positions of senior leadership are at the head of organizations forged through their own entrepreneurship - X representation in large legacy corps is smaller than some might hope. Of course, it's natural that 40 year-olds are going to report to 50 year-olds, but when that "grooming" tier is also clotted by the senior cohort, it means fewer opportunities for the next wave to prepare for leadership.
• Generation X is a lot smaller - maybe 50 million or so. If we can extrapolate these larger numbers to seats at the management table, it suggests that for every three jobs currently occupied by qualified Boomers, there are only two qualified Xers ready to step in. And that assumes that the number of qualified Xers isn't being suppressed by the dynamic described in the previous bullet point.
• For a wide variety of reasons, Generation X is going to bring a dramatically different leadership style to everything it touches. It's going to be more entrepreneurial, probably more cynical, and unfortunately it may not be as instinctively team-oriented as the generations ahead of it or behind it. In any case, the shift from Boomer management to Xer management is going to place a good measure of stress on many organizations.
• Then there's the second wave transition: from Xer to Millennial. The oldest Millennials are currently about 29 and are approaching the age when they will be expected to assume a greater mid-management role. Again, the shift from X to Mill is dramatic - far more dramatic than the Boom-to-X transition, in fact. Millennials are committed, they're strong tacticians, they're extremely team-oriented (in stark contrast to my generation - we Xers are often too individualistic for our own good), and they represent a powerful capability for getting things done. On the down side, they're the least savvy of all four generational cycles at critical thinking and problem solving (for a number of reasons, none of which are really their fault). Add to this the fact that this particular cohort has grown up the most affluent in American history, and what emerges is a portrait echoed by every single leader and manager (and professor, for that matter) I have talked to, without exception: Millennials are collectively entitled and self-absorbed, and their managers report having to spend an inordinate amount of time and energy managing egos and emotional drama. Eventually this generation will likely evolve into a powerful force for productivity and change, but for the moment it's unprepared to cover for a sudden rapid promotion of the Xers in lower and middle management roles.
• The Millennial Generation, by the way, is potentially larger than the Boom - some demographers say's it's the nation's first 100 million+ cohort, although the more common number is in the 75 million-plus range.

What should be emerging is a forecast of a significant management "stretch." The imminent retirement of a large management generation requires a massive and rapid influx of Xers, but at the same time, a wholesale promotion of Xers places the lower levels of management - the tactical execution level - at risk. And X simply isn't large enough to manage all that is going to be asked of it over the next decade and beyond.

American companies may be working hard on the macro-succession crisis, but if they are they're doing so behind one of the thickest veils of secrecy I've ever encountered. I haven't found any businesses talking about the problem, although my sample is admittedly too small to do too a lot of large-scale generalizing.

What I can do, though, is state with confidence that the dynamics described here are real and that organizations that aren't taking them seriously are in for a rough ride. There are ways of mitigating the crisis, and since it's going to be happening across all industries there are ways of turning this into opportunity.

But companies need to get started yesterday....