The CEO Refresher Websites for Professionals
Take control of your online presence
with your own professional website!

American Business Has a Management
Bench-Strength Problem

by George Stiles


Increasing global competition, rapidly changing technology and shortened product life cycles have forced companies to become more nimble and flexible with minimal overhead.

Since the mid 1980’s these pressures have caused American business to initiate ceaseless waves of downsizing, restructuring, mergers and acquisitions. Redundant layers of management and overlapping support functions have been summarily eliminated.

Costs have been wrung out in other ways; no more guaranteed employment; reduced or eliminated benefits; eradication of non-skills training; outsourcing and a dramatic increase in the use of temporary employees.

This radical corporate surgery has pulled the United States from a serious recession and propelled it to undisputed leadership of the world’s economy in an incredibly rapid turnaround.

However, such dramatic changes to the workplace cannot have only beneficial results. There will be longer-term consequences, positive and negative. True, a booming economy and full employment are causing smiles aplenty, but some worrisome trends are beginning to emerge.

Corporate loyalty is all but gone. Younger workers fully expect to change employers and careers multiple times in their lives. In the end, this might be a good trend. It creates an adaptable workforce with no expectation of entrenched entitlements. On the other hand, older workers are bewildered, angry and many are unemployed.

Under these circumstances, many employees, at all levels, spend a part of each workday figuring out how to maximize their own careers, searching for safety nets or better opportunities elsewhere. Obviously, this does not help productivity.

In today’s hot economy, with a short supply of good workers, most companies profess they would prefer to have loyal employees but few are willing to spend the money and make the effort to earn it. They simply do not recognize that employee loyalty improves productivity and that the best way to achieve that is to promote individual employee learning and align employee and company interests

Even healthy companies are ‘rightsizing’. Companies are constantly looking for ways to have fewer employees, pay existing ones less or get rid of them. Managers with the most experience and acumen are amongst the highest paid and are frequently targeted for elimination.

In addition to loyalty, another outcome of this constant corporate belt-tightening has been the depletion of management ranks. Business Week’s September 20, 1999 lead article Brian Drain states: "Corporate America is heading for a massive talent crunch.  Add to that what is already an acute shortage of smart managers, and we’re looking at an epic struggle in the making." The article goes on to say that, "What companies won’t be able to do is simply avoid the issue…..Between 1998 and 2010 the number of managerial 
jobs will rise by 21%".

This emphasis on short-term results, individual contribution and cost cutting has all but eliminated even the institutional memory of good management/organization development practices in countless companies. "Chainsaw Al Dunlap" type executives are cropping up everywhere. They run their companies on ‘project management’ principles with scant attention paid to all but the immediate future, focusing only on short-term profit and the 
Stock Market.

Compounding the depletion of management ranks has been a devaluation of management skills. So widespread is this devaluation that most individuals and companies with management deficiencies are unaware of their absence. Traditional mentors in American companies are practically extinct and those that remain are either overwhelmed, ignored or on their way out.

In the current climate, particularly in technology companies, management development is simply not considered an integral part of doing business. Since there is no recognition, support or incentive to mentor or develop others, today’s managers and their companies just ignore it, not recognizing the long-term strategic benefit.

Some companies are beginning to recognize the seriousness of this management talent shortage and are beginning to address it in innovative ways. A few have instituted efforts to retain older executives by offering them consulting contracts or part-time jobs. Other companies are turning to retired executives. These programs are aimed at transferring their knowledge/skills to younger executives or to temporally fill management openings.

Increasingly, companies are turning to Executive Coaching as the solution to their management development woes. Executive Coaching is practical one-on-one helping relationship, focused on concrete areas of performance or skill development. Most Executive Coaches are external consultants who can share a broad management perspective gained from varied experiences across many industries. In addition, the rapid rise of Executive Coaching as a management tool has attracted many former senior executives to the profession.

Companies who use Executive Coaches have found them a useful way for busy executives to learn ‘on the fly’. The coached executive does not have to spend valuable time off-site at a management development course. Additionally, the assistance a Coach provides is germane to company’s culture, business strategy and day-to-day issues. Coaching is especially well suited to complex, turbulent environments, where the limited lessons of the past could prove fatal when applied to current problems.

Corporate America is awakening to the seriousness of its growing shortage of skilled managers and is beginning to solve the problem in the most expedient and effective ways. Extending the careers of older employees is one such tool. However, with the loss of mentors and internal management development programs, Executive Coaching is a critical resource in helping to create effective management leaders for the new millenium.


The Author


George Stiles is  Managing Director of Executive Options, Wellesley, MA,  a firm specializing in developing career strategies with serious executives.  They focus their practice on executive mentoring, executive coaching and executive transition.  You can contact Executive Options at (888) 431-2244 or email them at

Many more articles in Coaching in The CEO Refresher Archives
The CEO Refresher

Copyright 2000 by George Stiles. All rights reserved.

Current Issue - Archives - CEO Links - News - Conferences - Recommended Reading

Refresher Publications