The Golden Child Syndrome

’Vice President Position. Functional Head of Fast Moving Company. Very difficult role. You will be asked to manage highly competitive needs in an environment of great uncertainty with little thanks in the short-term. You will be expected to cope with high expectations, both internal and external, with limited resources, particularly time. This is a position for which there is little, if any, precedent in our company. Sleepless nights, long hours, a significant amount of travel, no social life and sustained stress are guaranteed, coupled with a real possibility of failure. The remuneration package will be generous, but probably no more than your peer group.’

If this were an appointment vacancy one wonders how many people would apply. Why is that important? Well, the terms of the vacancy are a facet of something I have chosen to call the “Golden Child” syndrome and it is something that every company, irrespective of size and industry, needs to recognise and address as it develops the new generation of leaders.

To understand the significance of the syndrome it is important to recognise the business and industrial landscape of yesterday, today, and the future. One third of the Fortune 500 industrial organisations listed in 1970 had ceased to exist in their original form by 1983. A further one third of the original 500 companies had also ceased to exist by 1993 and the trend has continued. In fact, it is difficult to think of a company of any reasonable size that existed in 1970 that has not gone through some merger, an acquisition, or a radically changed business environment. Globalisation, the Internet, regulatory and legal changes, technological innovation, and the consolidation of most industries have been a few of the major challenges of the past 30 years, without the normal changes companies face with new competitors, changes in the marketplace, and the challenges of growing in size.

There are a myriad of reasons why companies fail, but few have suffered such catastrophic experience that they have had no opportunity to see the danger coming, no time to react and attempt to rectify the situation, and no time to learn. Why is it then that so many senior management teams appear unable to spot danger signs, stem the tide and lift the company’s head above the water line? After all, it is fair to assume that most companies have intelligent senior executives running their businesses.

One significant reason for this apparent inability to respond in a positive and timely fashion has its roots in the much publicised ‘War for Talent’ phenomenon – the competitive market for talent which has existed for some time and shows no signs of abating. It is difficult to identify, attract, recruit, develop, and retain good talent. Demographic changes, particularly in western countries, are reducing the number of people in the working population. Coupled with this, many highly-educated individuals are choosing alternative lifestyles and careers that do not involve working within a ‘corporate’ environment. Finally, many people, particularly in the younger generation, are showing an increasing desire to change companies on a more frequent basis.
The result is that companies are having to wait longer to find talented managers. They are having to pay more to these individuals – often significantly more – and there is no guarantee that the individual will stay. Having beaten off fierce competition, companies are loath to do anything that is likely to aggravate or upset their prize possession, particularly if the person is one of only a handful of stars around whom the company is planning the future.

This understandable dilemma is where the “Golden Child” syndrome comes into play. The roles identified for the new recruits are designed for them to perform well. The new stars perform well in their role, and are rapidly promoted. This brings them to the attention of more senior managers who earmark them for further promotion. Nothing wrong with this one might say. Quite right, but at this point an interesting career development challenge presents itself and only the most farsighted companies see the potential difficulties.

Once someone begins to perform well in a company a self-fulfilling success factor picks up momentum. One attractive role follows another and the danger is that the only jobs such high flyers are given consist of improving and putting together the final touches to brands, processes, systems, projects or growth divisions that are already successful.

Hence, over time, such high flyers find themselves holding Board or Executive Committee positions, running companies without ever having been challenged in a more demanding and ‘difficult’ role. The situation changes from one of concern to one of crisis where a whole peer group has been developed in such a way. Factors that contribute to this are the fact that MBA students have often been strident in their demands for accelerated promotion having invested so much in their studies, and the average age of CEOs has come down in the past 20 years. This has therefore reduced the time of development opportunities available to prepare people for senior positions.

If one believes that the core competency for managers in the future will be change management – and there is plenty of indication to suggest it will be – those seeking to sustain competitive advantage must be capable of implementing integrated change agendas for their organisations. Change management is inherently uncomfortable. There is no rulebook, no linear sequence of appropriate actions. Those responsible for change need to be capable of seeing it coming, of adjusting to shifting conditions and opportunities that surface as the change unfolds. Doing it in a difficult environment makes it twice as difficult.

The fact is that turning around a business, closing down a manufacturing plant or head office, or handling a really difficult merger or acquisition is a markedly different experience from running ‘successful’ companies. An awareness of the ‘external’ environment becomes more important than usual. In fact, it is not just an awareness that is needed but also an ability to interpret trends and uncertainties. The information needed may not be available. It may be difficult to persuade colleagues that there really is a danger on the horizon. The key success factors that have driven success for so long may no longer be relevant. Once a company is in difficulty resources will become increasingly scarce. Timescales will collapse and support may be more difficult to find. A ‘blame’ culture may appear from nowhere and traditional alliances, both formal and informal, may collapse and the ability to influence without authority will take on a new meaning. What you have known in the past suddenly does not work, and the values of the company come into question. Managing complexity becomes crucial – the capacity to organise information into logical sequences and to see the relationships between sets of data and changing circumstances is difficult enough under normal circumstances. It becomes so much more difficult when the data and the reference points are changing on a weekly, daily, or even hourly basis. All of this is on top of the well-known physical and psychological problems of working under stressful conditions for a prolonged period of time.

This is an illustrative rather than exhaustive list of issues, but it gives some indication of the differences in the environment and working conditions of a company going through tough times. So what do companies have to do? First, unless you believe leaders are born and not developed, every company has the opportunity to prepare future leaders for events that are highly likely to occur in their working life. In an ideal world it might be argued that every potential senior manager should have such an experience as part of their career. The chances are that there will not be enough opportunities for that, but as those responsible for selecting Boards and executive Committees reflect on their teams, the “Golden Child” syndrome does need to be factored in.

Companies will need to educate individuals about the necessity of such development. There has to be a balance between emphasising that the purpose of the exercise is not an attempt to make the person fail, but at the same time that there is a real need for such an experience and that the outcomes will be judged and noted. ‘Failure’ is not often treated well in companies and the generosity of a severance package is a poor substitute for corporate learning. Companies need to be realistic about the balance between mistakes and learning.

Last, but not least, this article has been written by a practising Senior Human Resources person. I don’t have the resources or the time to test my theory in a more structured and researched way. If anyone should feel inclined to do so, I would be interested in their findings. In the meantime, I will continue to believe that winning the war for talent remains important, but what you do with that talent is far more significant in the long run.

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