Many companies today face an age gap as they plan for leadership succession. There are not enough people in the historic replacement age range (40-55) to fill the spots being vacated by the retiring baby boomers, now in their 60s and early 70s. Consequently, there is a need to accelerate the development of younger high potentials, so they can take on senior leader responsibilities.
The traditional methods of preparing a person for an executive management role have been experience, exposure and education, all still valid and perhaps even preferred, if they can occur in the targeted time frame. Another increasingly popular method of preparation, which incorporates elements of these three approaches, is experiential learning, where the candidate is involved in real-world simulations and receives in-depth, 360-degree evaluations. People learn who they are as persons and leaders and how they can increase their effectiveness. Some companies add peer group membership and executive coaching to this mix as well.
Another option, often overlooked as a development opportunity, is participation in the company’s primary trade association. This group is in constant need of doers, thinkers and leaders, exactly the qualities that senior leaders must demonstrate. There are always openings for people to start with an event committee (Awards/Golf) and then move to a task force or group working on something more strategic and substantive (Workforce Challenges/Legislative Matters, Construction Documents), where senior executives from other respected industry companies are also involved. These exposures give your candidate a chance to see how senior leaders behave as peers, how they look at an industrywide issue, how they listen respectively and collaborate, and how they use data and ultimately make decisions. Experienced leaders in the mature associations will make newer group members welcome and engaged.
Reliable doers in committee member roles will inevitably be asked to lead. This gives the candidate a chance to “play a practice round” before stepping into the senior role at your company. The right candidates will learn, receive feedback and gain confidence, enhancing their ability to add immediate value as they move into your organization’s role. Trade associations also often provide the first opportunity for a senior leader to serve on a board of directors, which provides a chance for advanced learning and potential liability. For the right person, being elected to a board is humbling and sobering. It adds real executive seasoning; it is graduate education. It helps a person learn the distinction between board and staff work, between setting policies and implementing them, and between leading and managing.
The challenges of leadership development and succession are pervasive senior executive priorities in most construction companies. Getting involved in the local trade association activities can be an effective, low-cost, supplemental option.
Houston’s Monthly Metrics
Leading indicators and economists agree that Houston is growing again. Employment numbers are up, exports are up, and auto sales are up (a consumer confidence indicator); even oil has seen a recent spike (albeit for how long) in price, which typically bodes well for Houston.
While these indicators are great news for our city, it will still take some time before the construction industry will see the uptick. In talking with contractors, many are already seeing their backlogs much healthier for 2019.
Multifamily is expected to pick up next year, with over 60 properties being proposed, according to Apartment Data Services. With strong rent growth over the last year, developers are scrambling to get things going again. And while Apartment Data Services expects slightly negative absorption this year, as many displaced Harvey victims return home, there is gossip of more deals to come.
CBRE echoed those sentiments, noting that everything is expanding in Houston this year and in 2019, except for office space, which continues to be bogged down by sublease and vacancy issues. There are over 200 proposed properties in the light industrial space, and the Texas Medical Center currently has about $3 billion in construction underway, with more in the pipeline. Retail continues to see asking rents rise, as demand is I strong. The trend of “resi-mercial” office space – space that resembles home life with kitchen and communal space – is expected to continue to expand in Houston, as are shared office concepts and car concepts, like WeWork and ZipCar, which are growing in both popularity and in footprint.
Increasingly a global city, Houston has the largest share of its economy geared toward exports compared to other metros, with exports topping $100 billion last year. This, in part, contributes to the growing bottlenecks for railway and transport across the state. As oil and gas production has risen, so has the cost to transport it, as the capacity of our current railway system is being tested. Unless more capacity is added, we risk the Permian having to curtail its production because the pipeline won’t be able to handle the volume.
Houston’s shift to an export-oriented economy helped us weather the oil downturn much better than in the past but has also made our city more sensitive to what happens in the global economy. The outcomes of the NAFTA renegotiations, tariffs and unrest in the Middle East can all impact Houston’s economy.