Dr. Prakash V. Bhide |
How
do we accurately assess Executive Potential
is a question which is challenging many CHRO’s and CEO’s. A 2005 survey,
found that world’s largest companies ‘mishired’ people 80 % of the time and
mis-promoted people 75% of the time. This is really very costly and serious. A
large number of organizations are heavily investing in Talent Management and Succession
Management to build a strong leadership pipeline. They use 3x3 matrix of
potential and performance but struggle to assess and measure POTENTIAL. However, most of them report
that they are not happy with the results. According to Human Capital Institute,
70% of succession plans fail within two years. One of the challenges is ‘Identification of potential’ especially
in young executives.
In
my earlier blog on ‘Reflections on
Executive Talent and Potential’, we have seen in detail about the concept
of potential. I would strongly recommend you to read it as a backdrop paper and
setting the context to this blog. From Talent Management perspective “Potential is the latent future capability of
an individual to build upon existing strengths, knowledge, experience and improving
on major weaknesses, so that they do not become derailers, to perform
effectively at higher levels of responsibility within an appropriate
environment”. Each organization should define Talent and Potential aligned to
its Business Strategy and Industry Context.
We
will now explore several ways of assessing ‘Executive Potential’. Corporate
Leadership Council (2005) has defined Executive Potential in three dimensions:
1. Aspiration:
Extent
to which an employee desires
a.)
Advancement & influence
b.)
Prestige & recognition in the organization
c.)
Financial rewards
d.)
Overall job enjoyment
e.)
Work – life balance
2. Ability:
A
combination of innate characteristics & learned skills that an employee
uses to carry out their work. Mental/Cognitive agility, emotional intelligence,
technical and functional skills and interpersonal skills.
3. Engagement:
a.) Emotional commitment for the organization
b.) Rational commitment to stay with the organization
c.) Discretionary effort i.e. willingness to go beyond
the call of duty.
d.) Intent to stay with the organization.
Corporate Leadership Council believes that all three
dimensions need to be present simultaneously for a high potential employee.
Infact High Potential is the area of overlap
of the 3 circles of Aspiration, Ability & Engagement. High Potential
employees are those with 75% chance of being in the top quartile of performance
at the next level, within the first year in the new role. They recommend measuring
employee potential through a questionnaire survey (total 64 questions) given to
employees & their managers to assess aspiration, engagement & ability
of employee.
In ‘Leadership@Infosys’ by Matt Barney, It is reported
that two best methods for assessing potential are “Cognitive Ability” &
“Work Samples” at entry level. My research on a sample of 640 High Performing
employees correlates with this. At more senior levels ‘Follower Perceptions’
are more than two times better at predicting Leader Effectiveness than actual
objective measures of intelligence. My experience shows that 90 degree feedback
from subordinates is a great predictor of Leadership Potential. At middle and
senior levels ‘Learning Orientation’ and ‘Team Playing’ become important.
Infosys has developed ‘Computer Adaptive Multi-Source Assessment’ to gauge the
likelihood of effective performance and potential. 360 degrees surveys using
Rasch Measurement Technique that removes the leniency and severity bias of
raters, to make sure that all the ratings are fair, accurate and sufficiently
precise. The “Leadership Journey Series”, a 360 degree assessment based on
Zaccaro, Kemp and Bader (2004) model of Leadership Predictors (e.g.
personality, values, motivation, interests and cognitive ability) as well as
processes (e.g. performance)has an impact on Leadership Outcomes. This
assessment measures Leadership Performance and Leadership Potential. The
potential is measured in terms of Distal
predictors of leadership (e.g. personality, values, etc.) and Goal Orientation
(e.g. motivated to learn versus looking good).
Morgan McCall in his book ‘High Fliers’ recommends
“LEARNING ABILITY” as an essential and excellent predictor of future potential.
Several ‘Thought Leaders’ have recently expanded added dimensions and terms
like LEARNING AGILITY, LEARNING ORIENTATION etc. Centre for Creative Leadership
in collaboration with Columbia University has come out with a white paper on
‘Learning and Learning Agility’ (April 2012). Their research shows five main
facets of ‘Learning Agile’ behaviours of Leaders.
The 4 ‘ENABLERS’ are:
1. INNOVATING
2. PERFORMING (Remaining calm, present and engaged in
the face of difficulty and quickly adapt in order to perform)
3. Reflecting (Hungry for feedback and understand own
behaviours and assumption for deep insight of self awareness)
4. Risking (Putting themselves in a challenging
situation)
And 1
‘DERAILER’:
Defending (Defensive in face of adversity and avoiding
learning opportunities as they arise)
They found leaders with high learning agility to be:
a.) More
Extroverted
b.) More
original
c.) Less
accommodating
d.) More Focused
e.) More Resilient
Several new assessment instruments are being developed
to assess ‘LEARNING ABILITY’. Many of them use 360 degree multirater feedback
response on specially designed questionnaires.
Spreitger (1997)has developed a tool POSPECTOR with 14
dimensions on ability to learn from experience. Several authors have also come
up with Development Activities for improving Learning Ability.
Ram Charan, in his book “Talent Masters” says that
companies like GE, P&G, Hindustan Unilever etc. do not only rely on
batteries of mechanistic tests to assess talent & potential. Instead, they
study the behavior, actions and decisions of individuals and link them to
actual business performance. Their observations are rigorous, specific and
nuanced. Over time , as other senior leaders discuss them openly and candidly,
the observations become verified as facts. They dig to understand an
individual’s unique combination of traits. The purpose is to know what the
person is, describe his characteristics in complete thoughts using full
sentences (not words) and learn how key items combine in a unified whole. They
become “Intimate” with their talent by observing and listening to know the
essence of each individual through ‘Depth of Knowledge’ about people, a
database in their minds. Accumulation of these observations on job by line
managers and experts, produces a complete picture of the whole person which
helps in taking high quality decisions about leaders. Talent Masters besides
the formal reviews, have important “Social Processes” that can’t be easily
seen. Senior leaders spend at least 25% of their time in spotting &
developing leaders. At GE and P&G it is close to 40% of time.
Morgan McCall, in his book ‘High Fliers’, has identified eleven dimensions of early identification of global high potential executives. My experience shows that these can be assessed through a BEI dialogue by a trained assessor.
1. Seeks opportunity to learn
2. Acts with integrity
3. Adapts to cultural differences
4. Is committed to make a difference
5. Seeks broad business knowledge
6. Brings best out of people
7. Is insightful – sees things from new angles
8. Has courage to take risks
9. Seeks and uses feedback.
10. Learns from mistakes
11. Open to criticism
Assessment of Potential only through discussions by
Boss or Senior leaders many times is biased. If open discussions are based on
AC/DC data and recorded observations at work with incidents, then they become
powerful.
DDI has developed a “Leadership Blue Print” assessment
with four dimensions of attributes of leadership. Leadership Promise, Personal
Development Orientation, Mastery of complexity & Balance of values and
results.
My experience shows that BEI (Behavioural Event
Interview) technique by a trained assessor can adequately assess the ‘Learning
Ability/Learning Agility’ of young leaders, which is an excellent indication of
future potential. I also recommend that simultaneously ‘Derailers’ should also
be assessed periodically. Individual Development Plan for HI POTENTIALS should
include activities/action to improve & enhance “Learning Agility” and
overcome “Derailers”
I firmly
believe, based on my extensive experience of assessing more than 2000 High
Performing young leaders, that a well developed Leadership Competency Model,
incorporating future competencies for success (5 to 10 year time frame) and
robust Assessment/Development Centre methodology can excellently predict future
potential. We in JK Organization have developed an internal norm (Based on
data). At least 10 out of 12 Leadership Competencies to have a score of 3.0
& above, on a 1 to 5 scale, and out of which at least 4 competencies to
have a score of 3.5 & above to be rated at ‘A ’potential. Yes, the AC/DC is
rather a costly process and takes more time. I feel the investment is worth it
as it has a high ROI. As per me it is a small investment for assessing and
identifying future leaders more accurately with high probability of success.
Ultimately, the success of assessing potential, talent
management and leadership development, is evaluated by CEO’s with respect to meeting
the objectives e.g. Succession Management, Developing Strong Leadership Pipeline
etc. Hence, identifying High Potentials, is the first step in the Leadership
Development Journey. The grooming, nurturing of these High Potentials (or
assessment of potential during hiring at senior levels and their induction) is
equally important. The ingredients of the ‘CAKE MIX’ is important, but so is the
Love, Tender Loving Care and Expertise to ‘Bake ‘it by passing (the HI POTS)
through ‘Fire of Experience’ so that it is neither half baked nor gets burnt,
but really comes out “Well Baked” with all the aroma of success.
We will explore the Best Methods of Talent Management
and Leadership Development in our future blogs.