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Underperforming frontline and mid-level managers make excellent C-suite executives. Or at least that is what one might think by surveying the landscape of NextGen leaders and the lack of resources invested in preparing them for the C-suite.

Only one in three CEOs (34%) rate their organization’s frontline leadership quality as “very good” or “excellent,” according to the CEO Leadership Report 2021. Only 38% of CEOs rated their mid-level leadership quality highly.

The reality is, many NextGen leaders are woefully underprepared to move up to the C-suite. This is especially detrimental to the construction industry where roughly 41% of the current construction workforce will retire by 2031 and only 3% of young adults see a career in construction as desirable.

The current C-suite executives who have the necessary skills to lead an organization are leaving the industry at a rapid clip. Yet the NextGen is not prepared to take over the helm. This does not bode well for construction companies that want to promote mid-level leaders to the C-suite in the next three to five years.

“In the eyes of most CEOs, next-gen leadership looks alarmingly bleak. As they look down the ranks of leaders in their organizations, most are not impressed by the quality of their frontline and mid-level leaders. This lack of confidence in lower-level leaders is a strong indicator that companies may struggle to attract and retain top talent,” according to CEO Leadership Report 2021.

With few young adults entering the construction industry, it is even more critical to invest in developing the talent that is already there.

So what can construction leaders do now to develop the NextGen leaders who are already in the industry? Below are three benchmarks construction companies must reach to prepare NextGen leaders to take over C-suite roles.

1. Turn underperforming NextGen managers into high-performers


Before a mid-level manager can become a successful executive, they have to first become a successful mid-level manager. Obviously, not every NextGen manager is going to be an A-player. There will always be a bell-shaped curve of performance. However, if only 38% of the mid-level leadership is considered high quality, as mentioned above, a firm drastically reduces its pool of qualified candidates to promote to C-suite roles.

It is important to invest in the overall performance of NextGen leaders, who are responsible for the bulk of the results produced by a company. “As I neared the end of my corporate days, I realized I’d received much more management training in the last five years than I did in the first 20 years—when I really needed it—combined,” writes ˚Victor Lipman in the Harvard Business Review article “Why Do We Spend So Much Developing Senior Leaders and So Little Training New Managers?” Just as having a strong middle class drives transformation and innovation within an economy, a solid, well-equipped mid-level management does the same for a company.

2. Cross-train the NextGen


The skills needed as a mid-level manager are not necessarily the same skills required to succeed in the C-suite. There is a large gap between managing individual projects and departments and leading an entire company. While many NextGen leaders are experts in their field, they often have little to no coaching on how to run a business or how to lead a team.

Some NextGen leaders are promoted to the C-suite without any business acumen—knowledge of how other departments of the business are run. It is a steep climb to go from being a technical expert to becoming a strategic leader. Construction companies that cross-train the NextGen on how to run the business come out ahead.

3. Transfer knowledge to the NextGen


With 41% of the current construction workforce retiring by 2031, 41% of a company’s knowledge will walk out the door unless that knowledge is formally retained and transferred. The most important information to capture is knowledge gained through experience. This knowledge is often not documented or available from other sources, but it is immensely valuable.

Knowledge transfer can take as much as two to five years. It takes even longer if there is not a formal system in place to transfer knowledge. It takes 10 years to 20 years of experience and training to develop professionals who just entered the industry into an executive leader. It only takes a retirement or job change for all of that knowledge to walk out the door.

Without these benchmarks, NextGen leaders enter the C-suite unprepared to lead. They spend the next six months in a crash course, and the next two years just trying to get their bearings. NextGen leaders deserve to enter the C-suite prepared to succeed in their roles. The future of the construction industry depends on it.

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