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 of talent at all levels. Competition for hiring is going global, and demographics are resulting in a shrinking percentage of the workforce in the 35-to-44-year-old sweet spot for leadership development. For developed and increasingly developing economies talent shortage is an issue.
The executive search firm, Egon Zehnder, in a recent Harvard Business Review article, described how hiring, retaining and creating a leadership pipeline based on individual's potential is needed to succeed in today's ever-changing and complex business environment. "21st-Century Talent Spotting" by Claudio Fernández-Aráoz provides data from research that shows potential as the most important predictor of success at all levels of management, including the C-suite and the board. Zendher's data and our experience tells 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 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. 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 not give up in 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.
Another client in developed cross fertilization of skills through job rotations. Allowing managers to go on these stretch assignments and come back enables information sharing that would otherwise stay in silos. Although it is hard to sell this to managers who don't want to lose their best people, it is good for those learning and the organization as a whole.
Setting up a new lens for talent recruitment and development will be critical. Not being afraid to get involved in these conversations is crucial to 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 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. 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.
Stuart R. Levine is chairman/CEO of Stuart Levine & Associates. He can be reached at stuartlevine.com or (516) 465-0800.
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