By, Stuart R. Levine
Published in, The Credit Union Times
CEOs recognize that building and maintaining the pipeline of emergent senior management is getting more difficult. PricewaterhouseCoopers in a recent survey of CEOs discovered that they have a serious concern about the future availability of talent at all levels. There is global competition for talent with companies reaching beyond their home markets to hire. Additionally, demographic changes are resulting in a shrinking percentage of the workforce in the “sweet spot” for leadership development, which is the 35-to-44-year-old age bracket. For both developed economies and increasingly for developing economies this talent shortage is an issue. How can management address this situation?
The executive search firm, Egon Zehnder, in a recent HBR article described how hiring, retaining and creating a leadership pipeline of individuals based on their potential is needed to succeed in today’s ever-changing, complex and uncertain business environment. “21st-Century Talent Spotting” by Claudio Fernández-Aráoz provides data from research which shows potential as the most important predictor of success at all levels of management, including the C-suite and the board. 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 assessing specific skill sets and competencies based on past performance.
We are increasingly focused on helping clients to identify new candidates and develop high potential leaders. Motivation, intellectual curiosity, insight, engagement and determination are all characteristics of those possessing potential. These individuals have a strong desire to do extremely well, and they also place the needs of the group above their own. They search out new experiences and knowledge, thereby demonstrating intellectual curiosity. They seek out feedback and are humble enough to accept it and insightful enough to incorporate useful feedback into behaviors and work habits. They connect the dots to envision new possibilities and relate to and inspire others through emotion and logic. Their determination allows them to bounce back from adversity and they don’t give up in the face of difficult situations.
An organization can discern potential through detailed due diligence on the candidate’s personal and professional history and by conducting in-depth interviews and reference checks. Furthermore, organizations need an empirically validated model and system for assessing potential. By implementing these steps, a high level of predictive confidence can be gained about the potential of candidates, both for new hires and for internal promotions. Furthermore, consistency in analysis across evaluators and candidates inspires confidence.
As an example, we assisted one of our clients to develop and deploy recruiting assessment tools addressing characteristics of potential. Management was trained through one on one programs and group meetings. As a direct result, the organization has seen a measured improvement in data on customer satisfaction and employee engagement.
We assisted another client in developing cross fertilization of skills through job rotations. Allowing managers to go on these stretch assignments and come back, enables information to get passed along that would otherwise stay stagnant within a division or silo. Although it is hard to sell this to managers who don’t want to lose their best people, it is good for those who are learning and for the organization as a whole.
Setting up a new lens for talent recruitment and development will be critical based on the difficulty of succession planning and the scarcity of talent. Not being afraid to getting involved in these conversations is hugely important to every organization’s sustainability. The old model of experience and competencies is being replaced due to the incredibly violent changes that organizations are facing today. Static core leadership teams will not cut it anymore in today’s world. If you have people around you who can’t switch gears and don’t have common sense or intellectual curiosity, it is hard to move strategically. Continuous learning and determination are skills that will get individuals and companies to their goals and objectives.
Building the leadership pipeline and performing succession planning is a critical responsibility of management and boards. Hiring, retaining and developing those who have potential must be a top priority for all levels of management throughout the organization. And CEOs as well, need to surround themselves with high potential individuals, often coming out of their own comfort zones. As the CEOs in the Pricewaterhouse survey know, nourishing this pipeline is increasingly challenging. But identifying and developing talent is all the more important not just to survive ambiguities and difficulties in the increasingly uncertain future, but to thrive in this business environment.
