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Peter Drucker, often referred to as the “father of modern management”, claimed it is extremely difficult to measure potential. This is particularly true in the fast-changing world we now find ourselves in. However, there are numerous advantages to spotting and developing high potential leaders. Some of these include a stronger talent pipeline, filling more key positions with internal hires, better retention and improved progression of minorities and underrepresented groups. So, what exactly is potential, and can it be accurately assessed?
Leadership potential is the future performance a person is likely to achieve in a leadership role. It is a prediction of their future performance trajectory. And therein lies the major challenge – a person’s potential is dependent on a wide range of internal and external factors so measuring it is extremely difficult and prone to error. For example, factors such as career motivations, values, life changes, the presence of a mentor or sponsor, and culture fit can significantly impact a person’s potential to succeed in a leadership role.
Most organizations use very crude and unscientific methods to spot and assess leadership potential. Some still place a disproportionally high emphasis on educational factors, favouring those from top universities or candidates with advanced business degrees when looking to hire new leaders or promote high potentials into leadership roles. In addition to the obvious biases that occur from such strategies, educational attainment and qualifications alone are generally unreliable predictors of leadership potential. They focus too narrowly on analytical intelligence and don’t consider other abilities that are better predictors of leadership success such as adaptability, perseverance, social and emotional intelligence and creative problem-solving. Other organizations promote their best technical and functional experts into leadership roles. However, there is a big difference between the abilities, behaviours, and motivations of technical and functional experts and those required to be an effective leader. As a result, this strategy often results in costly failures, including demoralised teams, unwanted turnover of talented individual contributors and performance shortfalls.
Many organizations have adopted the well-known “9-Box Grid” to allocate talent into categories based on managers’ evaluations of performance and potential. However, many organizations never spend time defining what is meant by “potential” so measurement remains highly subjective and prone to all types of biases. Many companies also don’t stretch and develop people once they’ve been assigned a “high potential” rating. Therefore, this exercise never moves beyond a subjective rating process and does little to help the business spot, develop and retain talent. Another problem that often arises is that due to a lack of scrutiny and calibration of senior leaders’ ratings by Human Resources, the process does little to challenge old assumptions and stereotypes about what makes a good leader in the company. This can undermine opportunities to consider new and emerging leadership talents and qualities that are vital in the new world of work. It can also obstruct the progress of under-represented and minority groups into key leadership roles.
Organizations can avoid some of these problems by putting in place a more scientific and objective process for assessing leadership potential based on the following 4 principles:
Measure their performance track record
Many senior executives still favour traditional leadership traits like assertion, charisma and an outgoing style when looking for future leaders. However, there is little evidence that these characteristics are associated with good leadership, particularly in today’s fast-changing and complex world. In fact, they can lead to the appointment of narcissistic, self-serving and autocratic leaders who achieve short-term results at the expense of long-term sustainable growth and development of key talent.
A far more effective approach is to measure the ability of high-potential managers and leaders to positively influence and coach others, their learning agility, and their skill in building high-performing teams that deliver great results. It is often the humble and curious grafters who show a real talent for building teams and getting the best out of others that are far more effective in leadership roles.
To ensure a more objective measurement of current performance in these areas, companies should identify and regularly assess softer leadership behaviours as well as harder measures of performance. They should also provide opportunities for top leaders to come together at least twice a year to systematically evaluate the potential of high-potential candidates using a rigorous process to discuss and calibrate evaluations. To ensure this is a fair and objective process, we strongly recommend it is facilitated by a trained HR or external facilitator.
Apply work samples to supplement interviews and traditional tests
Despite exaggerated claims from many consultants and business psychologists, commonly used assessment methods (including personality and aptitude tests) are not a panacea as they are far less accurate in predicting future potential than in predicting performance in the short term.
However, research provides promising findings that personality factors like high conscientiousness, openness to learning, resilience and emotional self-regulation do predict better leadership performance. Similarly, people who can think more analytically, creatively, and strategically often perform better as leaders. Therefore, well-established personality and aptitude tests should remain an important part of our toolkit to measure the potential of future leaders as they add incremental validity to objective, well-structured interviews.
To strengthen measurement accuracy, companies should go beyond traditional tests and structured interviews, using well-designed work samples and simulations. As a result of advancements in technology (including machine learning and gamification) and behavioural sciences, the solutions on offer have never been greater. More commonly used work samples include situational judgement tests, role plays, analysis exercises, scenario challenges and strategy discussions. All these will provide you with additional insights on how future leaders are likely to handle the typical challenges and dilemmas of a leadership role.
Give them stretch assignments
This is one of the best ways to test potential as it provides a high potential leader/emerging leader with an opportunity to assume responsibility for challenging leadership tasks on a trial basis to see how they perform under pressure. Despite the benefits of this approach, it is often underutilized or poorly implemented. Common implementation problems include risk-averse cultures and lack of adequate delegation, inadequate coaching and mentoring and poor design and application of criteria to evaluate performance resulting in subjectivity and unconscious bias.
Stretch projects can be team-based or individual. We typically recommend the former as these enable potential leaders to collaborate with team members and other stakeholders to overcome real business dilemmas and challenges. This enables HR and senior leaders to evaluate high potentials’ teamwork, joint problem solving, influencing and emotional intelligence, as well as their individual contribution.
Although there is mixed evidence about the effectiveness of multi-rater feedback surveys, a robust peer feedback approach should be considered in the mix of approaches used by companies to assess potential for leadership roles. Such surveys also improve leaders’ self-awareness and self-improvement by providing valuable feedback about their strengths, potential weaker areas and ‘blind spots’ that might derail their progress. If you decide to use a multi-rater or 360-degree survey, we strongly recommend this is designed by behavioural scientists who can ensure it is well-constructed and measures behaviours that are relevant to success in leadership roles within your company.
It is extremely tough to accurately measure the potential of future leaders and any consultant who claims otherwise is misleading you. However, this does not mean that it isn’t worth the investment to bring more rigour and science to the discovery and development of your future leaders. By combining some of the techniques outlined above, you can ensure you improve the accuracy and consistency of your assessments while at the same time providing leaders/future leaders with meaningful development opportunities.
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Most medium and large organizations use psychological assessment tests (incl. ability and personality testing), principally for hiring, and this figure is expected to climb to almost 90% in the coming years (Chamorro-Premuzic, 2015). Using assessment techniques to support talent development and organizational change applications (e.g., to support reskilling in response to the digitization of work) is also increasingly common. Work-based assessments provide more objective data to inform key talent management decisions and if applied professionally, can help reduce subjectivity and a multitude of human biases in hiring, development, succession planning and other critical HR processes.
Rapid technological advances, changing client requirements and a more digitally curious HR profession means that the range of work-related assessments on offer is growing faster than ever. This is long overdue. Many assessments are decades old and have changed very little since the last century. Using them is equivalent to using a legacy mainframe to calculate your household budget rather than using the latest app on your smartphone or tablet. Yet it is not just about embracing innovative new technologies in assessment like gamification and machine-learning. The fundamental assumptions and models we use to assess and make important decisions about people’s futures need to shift significantly too.
Assessing and amplifying people’s individuality and uniqueness
Assessments measuring personality still tend to describe and measure human abilities and behaviour in imprecise, limiting ways. For example, many widely used personality profiles pigeonhole people into broad, oversimplified personality types, categories and even colours. This view of human behaviour at work is seductively simple and although such over-generalized personality typing can be helpful in giving organizations a basic understanding of how people approach tasks and relate to others, their value is limited and can be counterproductive.
In a world that increasingly recognizes the importance of discovering and leveraging diversity, they promote narrow thinking and stereotyping about people. They fail to reflect the countless unique differences that make us who we are, including the talents, values, and motivations we leverage to do our best work. Even when people have similar personality traits, the way they use these depends on their goals, motivations, values, and the way they interpret and respond to different situations.
The younger generations entering the workplace want their individuality and unique talents to be valued, appreciated, and developed from the get-go. Any assessment that labels or pigeon-holes them too narrowly can quickly undermine their sense of identity, value, and psychological connection with the organization.
Many traditional assessments that are still commonly used today are unlikely to stand the test of time. To future-proof their organization and achieve better talent outcomes, HR leaders and professionals need to evaluate the rigour and relevance and of their current assessment tools, including how well they are predicting performance and promoting a diverse, inclusive workplace. Those based on outdated thinking and questionable science should be replaced with scientifically validated, up-to-date tools that pinpoint people’s unique and diverse talents, abilities motivations and values.
Chamorro-Premuzic, T. (2015). Ace the Assessment. Harvard Business Review, July-August.
Based on decades of experience working with leaders, it is clear to me that many of the best are critical thinkers. Their ability to logically analyse information and evaluate problems to reach effective, well-reasoned decisions is vital for any business.
When they’re in the zone, critically-minded leaders are quick to spot problems and gaps, identify potential gaps and risks in solutions and are very effective in playing “devil’s advocate” by pointing out gaps, problems and weaknesses when evaluating data and solving problems.
However, when used in excess, critical thinking can result in the following problematic behaviours for leaders:
However, there are a variety of techniques critically-minded leaders can apply to avoid these risks. Based on my coaching work with this type of leaders, these are the most effective:
Identifying situational triggers for the overused behaviours
Leaders develop deeply ingrained habits and ways of approaching and handling tasks and decisions based on what’s worked for them in the past. These habits are developed over many years and are often very difficult to change. However, by becoming more self-aware of what triggers overused behaviours, critically-minded leaders can learn to monitor how they are using their critical thinking skills across different situations and the impact they are having on others. For example, periods of intense stress and pressure can often amplify overused behaviours. Similarly, they may be triggered by overly optimistic or positive people. Through practising “dialling up” and “dialling down” their critical thinking, they can adjust their behaviour to the needs of the situation and minimize the risk of overdrive behaviours showing up.
Using signposting to clarify expectations
Critically minded leaders are often misunderstood by others as being overly critical or negative, especially when the team is made up of positive and creative thinkers. By signposting their intentions to the team more clearly, critical leaders will be better understood and trusted to play a complementary role that brings value to the group. There are various ways leaders can signpost their intentions up front, however, the easiest is to say something along the lines of: “Are you ok if I play devil’s advocate during this meeting?” or “I’m happy to flush out issues and problems as we work through these options if everyone’s ok with that.”
Effective questioning skills
In coaching critically-minded leaders over several decades, some of my greatest breakthroughs have occurred by helping leaders to understand how to shift the way they use their critical thinking talent from presenting arguments and objections to posing powerful questions. Critical thinkers typically ask themselves tough questions about the data or options in front of them but don’t always verbalise these questions. By communicating and inviting others to reflect on these open questions with them, they can enrich the conversation, promote better scrutiny of the data, and broaden the team’s conversation about potential options, risks, and decision criteria.
Creating space for creative problem-solving
Leaders who are critical thinkers need to learn to make space for creative thinkers to have a voice and apply their talents, especially when creative problem-solving is called for to tackle complex problems or promote more innovation. This requires consciously “dialling back” on their tendency to find fault with ideas and solutions to allow sufficient time and space for creative thinking. They can either call on the natural creatives in the team to lead a brainstorming or brainwriting session or they can do this themselves. We recommend the former as this will provide creatives with an opportunity to shine and optimize their talents. Leaders can also make greater use of established divergent thinking techniques such as the POINT method when problem-solving. This encourages people to first look at the Pluses and Opportunities associated with ideas and alternatives in advance of issues and problems. The second step is to encourage the team to raise Issues as problem questions rather than simply stating the issues, as questions invite divergent and creative thinking. Finally, the team explores New Thinking to tackle problem questions that have been raised and discussed.
When leaders overuse their critical thinking talents, their overwhelming critique, negativity, and problem-spotting can easily be misunderstood by others. These overused behaviours can lead to a multitude of other unintended consequences, including poor performance, damaged relationships, and low morale. However, by building greater self-awareness, adapting their critical thinking to the needs of the situation, and collaborating with others who are more creative and solutions-oriented, leaders who are critical thinkers can significantly improve their leadership effectiveness and outcomes.
Increasingly passion is being highlighted as a key ingredient for success at the individual, team, and organizational levels. In today’s rapidly changing and uncertain business environment, companies need passionate people who can drive outstanding and sustained performance.
Although it has been defined in different ways, passion is best defined as a “fire in the belly” or positive energy to achieve and outperform against one’s goals. Based on significant research over the last 2 decades, we know that when people are in jobs that enable them to do what really motivates them and optimize their talents, they are far more likely to demonstrate higher levels of passion. Passionate employees are also more likely to go “above and beyond” to achieve exceptional results. Organizations today need passionate, strongly committed people to deal with rapid changes in the business environment, growing complexity and increased competition.
Passion is different from employee engagement in that engagement focuses mainly on employee satisfaction with work environment factors such as co-workers, management, working conditions, etc. Passion is about the individual and their purpose. It focuses on how aligned and connected people are with the company’s vision and whether they believe they can use their unique talents and abilities to help the company solve challenges and achieve its goals. It provides intrinsic motivation stemming from the person’s own aspirations and sense of identity that can boost a person’s performance between paydays.
Perseverance involves working hard to achieve goals and sticking with a task even in the face of immense pressure and setbacks. It ensures focus and discipline to establish the productive routines and habits necessary to achieve excellent results. There are many factors influencing perseverance, however, the one that is arguably most important is being committed to and energized by one’s roles and the overall purpose of the company.
So, it seems that passion and perseverance are strongly and positively related. The research has recently been advanced by studies about “Grit” by Angela Duckworth, a psychology professor at the University of Pennsylvania. Duckworth defines Grit as the capacity to sustain both effort and interest in projects or tasks that take months or even longer to complete. She has found that people who are high in Grit don’t deviate from their goals, even in the absence of positive feedback and in the face of adversity. The Grit concept is essentially a combination of passion and perseverance. It suggests that we should be looking to identify and develop both in our people, rather than focusing on one or the other.
Grit: The Power of Passion and Perseverance, 2016, Angela Duckworth. London: Penguin
Intelligence, typically defined as a person’s cognitive ability to analyze and deal with complex problems in a logical way, is undoubtedly a huge asset in the workplace, and is crucial in dealing effectively with work demands and challenges.
The way intelligence is defined is still narrow and limiting
In today’s fast paced environment where the speed of change is dizzying, analytical intelligence is important, but insufficient for success. In recent decades psychologists and people professionals have increasingly recognized the importance of taking a broader approach to understanding and measuring intelligence that recognizes its multi-faceted nature. For example, Howard Gardner, a developmental psychologist at Harvard Business School introduced the idea of “multiple intelligences” as a way to broaden the research and practice on intelligence beyond logical, verbal, and numerical abilities. In recent decades this has given rise to a long overdue exploration of different intellectual strengths including creative, social, emotional, and practical intelligences. Studies indicate that for many roles, these are just as important as traditional types of intelligence. However, schools, higher education institutions and workplaces persist in inflating the importance of analytical intelligence. Measures typically used to assess intelligence such as IQ, verbal and numerical reasoning tests reflect this narrow approach. This significantly limits opportunities to expand our understanding and measurement of different types of intellectual strengths and talents in education and the workplace. Moreover, it is not just intelligence that is hugely important in predicting job performance.
It is often the people who persevere that outperform intellectually gifted ‘smarts’ who lack the social-emotional skills to succeed or give up too quickly when confronted with new or difficult challenges.
So, can an employee who demonstrates exceptional perseverance achieve better results than someone who has higher logical intelligence and reasoning abilities?
Perseverance and Grit are just as important as intelligence
Perseverance, or the capacity to persist in the face of obstacles or challenges, is receiving increasing attention from behavioural scientists and practitioners alike. Recent studies show that in many roles, it is people who work hard and stick to their long-term goals that are more likely to achieve peak performance. Those demonstrating both passion for their role and dogged perseverance, a combination that has been labelled “Grit” by psychologists, work hardest to overcome obstacles, and don’t give up under stress and pressure. They are therefore more likely to achieve their goals, even when their natural intelligence is lower.
An interesting finding is that intelligence and Grit aren’t necessarily related. For example, many extremely intelligent people are bought up in overly protected environments and have learned little about dealing with hardship and facing difficult challenges, so they have very low levels of Grit. Contrast this to people who have fought hard to overcome adversity linked to their gender, ethnicity, or social class to succeed in a world that throws down razor-sharp tacks at every turn to slow their progress.
Perseverance is also crucial to develop learning agility required to deal with fast-changing environments. While intelligence is important to effective learning, if the person is not willing to put in the hard work and effort needed to develop new skills and adapt to constant changes, they won’t be able to sustain high levels of success. When tasks and problems are highly complex and the skills to master them are particularly difficult to learn, such as those found in leadership and technical specialist roles, perseverance becomes even more important.
Hire for perseverance as well as intelligence
Of course, for more complex, knowledge-intensive roles, the person who has both high levels of intelligence and perseverance is the person who will typically achieve the best performance. They are also more likely to have the Grit and learning agility to thrive in the face of extreme uncertainty and adversity.
While intelligence is a key quality to have to be able to solve problems and make good, well-reasoned decisions, it is only effective if the person can use their intelligence in an agile way to deal with new and unexpected challenges and opportunities. Perseverance is essential to help leaders and employees tackle and overcome obstacles, deliver results under pressure, and adapt to change. Some may be surprised to learn that studies show that many of the most successful leaders and entrepreneurs are not people with the highest IQ scores or grades from school, college, or university. They achieve success principally through ambition, hard work, love, and belief in what they are doing and dogged perseverance to succeed. Human Resources professionals would therefore be well advised to incorporate this ability to persevere into their assessment strategies to ensure it is part of the way they attract, select, develop, and manage their talent.
Most medium and large organizations use psychological assessment tests (incl. ability and personality testing), principally for hiring, and this figure is expected to climb to almost 90% in the coming years (Chamorro-Premuzic, 2015). Using assessment techniques to support talent development and organizational change applications (e.g., to support re-organization and reskilling in response to digitization of work), is also increasingly common. Assessments are also being deployed by organizations seeking to improve the diversity of their recruitment and talent pipelines. They use these tests as additional data sources rather than replying purely on traditional selection techniques like CV screens and behavioural interviews that are prone to subjectivity, rater error and unconscious bias.
It is not just the popularity of assessments and range of applications that is changing. Rapid technological advances, changing client requirements and a more digitally-curious HR profession means that the type of assessments is changing fast. Many assessments are decades old and have changed very little since the early part of the last century. Using them is equivalent to using a legacy mainframe to calculate your household budget rather than using the latest app on your smartphone or tablet. So what does the future of assessment hold in this digital age we are entering?
Some of the most important trends are:
The rapid adoption of new technologies
New technologies offer innovative breakthroughs in the way we assess people. Mobile technologies, including smart devices and tablets, are likely to replace PCs and laptops as the most common way of undertaking assessments moving forward. This presents some formidable challenges in terms of ensuring standardised test conditions, especially with regard to ability tests for selection purposes. However, companies are moving ahead regardless to incorporate these cost-effective and candidate-friendly technologies into their testing processes.
Traditional surveys are giving ways to new, more engaging ways of collecting and analysing data. Many of these shift the focus from proxies of behaviour (e.g., completing a survey) to measuring actual behaviour. A growing number of companies are introducing virtual reality hiring and and high-tech simulations, which enable them to see how candidates respond under pressure to challenging situations in the same way pilots are screened and trained using tough simulation exercises. This approach is, in many respects, a far more objective and robust way of measuring performance and potential, particularly in high pressure, changeable or unpredictable situations.
Computer-based artificial intelligence (AI) is also being introduced by some companies like HireVue to help minimize subjectivity in decision making, especially when collecting and analysing interview data. With a growing number of tech companies offering smart interview recording and analysis technologies, including video screening via laptops and smart devices, this is a trend we predict will grow significantly.
Gamification of tests measuring a wide range of abilities, including thinking styles, verbal and numerical reasoning and interpersonal styles, is growing in popularity too. This approach has the advantage of improving the candidate experience and minimizing bias in measurement caused by factors such as test anxiety which can occur when using more traditional tests.
However, games-based assessment is not without critics who argue that psychometric rigour is sometimes compromised in order to engage candidates in a fun, immersive experience. Of course, this type of assessment is also relatively expensive to design, test and implement so adoption remains limited.
User experience is paramount
We now live in a world where end user experience is paramount and this applies to the world of online assessments as much as it does to any other online solution we consume. Many assessments are still long, cumbersome and dull to complete. They rarely provide a rich ongoing user experience following test completion with no or little link to development and ongoing performance improvement.
In a world of immersive digital experiences and increasingly short attention spans, assessment designers will need to offer shorter, more focused assessments using more engaging approaches such as game-based assessments, interactive rating formats, and virtual or augmented reality technology. This means they will also need to work out how best to combine psychometric rigour with highly engaging formats, as these two aims are not easy to reconcile.
Understanding peak performance
A much sharper focus on productivity gains (doing more with less) and building a work culture of excellence will accelerate the move away from measuring ‘normal’ ranges of behaviour and performance to predicting qualities driving peak performance such as strengths, talents and motives. By continuing to focus on measuring how a ‘typical person’ behaves at work and applying competencies to try to standardise behaviour across large groups of leaders or employees, we miss an opportunity to fully understand and unlock peak performance.
Zooming in on diversity and uniqueness
A related trend will be a shift away from pigeon-holing personality and ability into broad, oversimplified categories, e.g., “extroverts versus introverts”, as a way to understand and predict behaviour. For example, according to MBTI, people can be classified in one of 16 character preferences and most behaviour can be explained by their type. Insights Discovery does something similar by assigning people one of 4 main colours (e.g., “sunshine yellows” are warm, expressive types) which are supposed to explain most behaviour at work.
This view of human behaviour at work is seductively simple and although MBTI and Insights can be effective in helping people gain a basic understanding of how they and their co-workers typically approach tasks, make decisions and relate to others, their value is limited. They fail to take account of the vast range of differences that make us unique, including the strengths, talents and different ways in which we achieve our results.
Oversimplified personality assessments also don’t take account of the complex and fast-changing person-situation interaction effects evident in today’s organizations. Assessments can better account for these by ensuring employees get 360-degree feedback on how their qualities and behaviours are perceived by co-workers and other stakeholders, including measuring how their strengths and behaviour play out in times of rapid change and stress.
Another major force accelerating this trend is the changing demographics of our workforce. Millennials coming into the workplace want their individuality and unique talents to be valued, appreciated and developed from the get-go. Any assessment that labels or pigeon-holes them too narrowly can quickly undermine their sense of identity, value and psychological engagement with the company.
Measuring learning agility and GRIT
Businesses increasingly need agile, energized and resilient workforces in order to be nimble, competitive and adapt to increasingly turbulent markets and rapidly changing technologies. Consequently, there will be an increased focus on defining and measuring qualities like learning agility, flexibility and resilience. A related trait, GRIT (a combination of passion for a long-term goal and perseverance) is similarly receiving a lot of attention from HR professionals and business psychologists recently as it reflects what many businesses need from their people in order to remain focused and highly productive in the face of pressure and uncertainty.
Using social media data
In the coming decade, organizations will make increasing use of data provided on social networking sites, such as Facebook, Twitter and LinkedIn, to recruit and screen candidates. Algorithms and tools have already been developed and tested that accurately describe your personality based on your Facebook and other social media activity. The ethical and legal implications of using social media ‘digital footprints’ in this way are already raising concerns among candidates, HR and legal professionals. Ethical considerations arising from the use of web scraping from social media to assess people were recently brought into sharp focus by the questionable personality profiling practices of Cambridge Analytica and it is highly likely that the use of such techniques will increasingly be curtailed by changes in legislation such as the EU’s General Data Protection Regulations (GDPR).
Many assessments are unlikely to stand the test of time as we move into the new digital age. In order to future-proof their organization and achieve clear talent outcomes, HR and people leaders should experiment with some of the new tools, ensuring outdated approaches are replaced with scientifically validated, up-to-date approaches that are engaging and also pinpoint people’s uniqueness and diverse talents, as well as measuring job-based requirements.
Further reading Chamorro-Premuzic, T. (2015). Ace the Assessment. Harvard Business Review, July-August.