Talent development for the 21st-century
Our work with clients has increasingly focused on helping them to develop high potential leaders. Motivation, intellectual curiosity, insight, engagement and determination are all characteristics indicating potential. A recent HBR article “The Big Idea — 21st-Century Talent Spotting” by Claudio Fernández-Aráoz of the executive search firm, Egon Zehnder, describes how hiring, retaining and creating a leadership pipeline of individuals based on their potential is needed to succeed in today’s “Volatile, Uncertain, Complex and Ambiguous” business environment. Harvard Business Review names this VUCA. Furthermore, research shows that potential is the most important predictor of success at all levels of management, including the C-suite and the board.
Egon Zehnder’s study confirms the key traits that are reliable predictors of potential. The individual with potential is motivated and has a strong drive to do succeed. But they also put the needs of the group ahead of their own. A person with potential is intellectually curious, searching out new experiences and knowledge. They have the courage to ask for feedback and the humility to learn from it. They are open to change. Their insights allows them to collect and make sense of disparate information. They connect the dots to envision new possibilities. They engage and use logic and emotion to connect to and inspire others. They are determined. They bounce back from adversity and do not give up in the face of challenges.
This VUCA business environment will only increase, making a focus on this quality of “potential” more important than ever. Most companies today focus on “competencies”, involving assessment of specific experience, abilities and skills for hiring and promotion decisions. Evaluation for competencies is backward looking, while determining potential is forward-looking. Your organization should gauge potential by looking for the key identifiers when evaluating new hire candidates and reevaluating current employees. Often “high-potential” programs, which advance promising managers, actually are focused on past performance rather than potential for the future. HBR points out that given our VUCA world, past performance is not a guarantee of future success.
Egon Zendher’s data and our experience tell us that assessment based on potential can be done with a high level of accuracy, but it is much more difficult than measuring IQ, past performance, specific skill sets and competencies. Potential can be determined by performing detailed due diligence on the candidate’s personal and professional history through conducting in-depth interviews and reference checks. Hiring and promotion should be a process of elimination as much as inclusion. Those lacking the desired qualities should not move forward.
Development of talent happens more quickly with “stretch assignments”. New roles that are varied, multifaceted, multidisciplinary, demanding and uncomfortable will develop talent more quickly than simply promotion into more senior positions that are similar, familiar and comfortable. With another client, we worked with senior management to make stretch assignments part of the culture. The result not only accelerated the development of management talent, but also increased enthusiasm and loyalty to the organization.
Succession planning is a critical responsibility of management and boards, and not just for senior management positions. Companies must properly develop their pipeline of future leaders across all levels of the organization, however doing so is increasingly challenging. PricewaterhouseCoopers in a recent survey of CEOs discovered a serious concern about the future availability of talent at all levels. Building and maintaining the pipeline of emergent senior management is getting more difficult due to global competition for talent, whereby companies hire outside of home markets, and due to changing demographics, whereby a shrinking percentage of the workforce is in the 35-to-44-year-old age bracket, the “sweet spot” for leadership development. These demographics affect both developed economies and are becoming an issue for developing economies as well.
As the CEOs in the Price Waterhouse survey recognize, it is more and more challenging to prepare your organization to face the VACU future, because maintaining an adequate pool of talent is increasingly challenging. Therefore, seeking, developing and promoting those with potential must be your top priority more than ever before.
