How to Identify Future Leaders
Organizations are being challenged to identify the internal leaders who will best navigate in an age of uncertainty and disruption. A critical element of this challenge will be the mechanisms by which organizations will identify, nurture and retain these high-potential individuals.
By Joaquin Alvarez
As organizations focus on the identification, development and retention of their most promising employees, the questions as to the accuracy of the selection process are a primary concern. A recent article by the Harvard Business Review estimates that as many as 40 percent of those placed in high-potential programs may not belong there.
According to a survey conducted by the American Management Association Enterprise, only 8 percent of respondents believed their organization used a systematic approach to selecting their high-potential employees. This lack of reliability in the selection process can result in the perception that entry into such programs has less to do with merit than with preferential treatment. The same AMA survey showed only 12 percent of respondents felt the process was impartial and even-handed.
The difficulty in the selection process reflects that organizations are much more adept at measuring performance than potential. Although performance is certainly a strong indicator, it does not offer an absolute correlation to success in a high-potential program or in future leadership roles. As Andre Lavoie remarked in his article on the subject; "Not being able to distinguish between performance and potential will make it difficult to identify, develop and retain talent. All high potentials are high performers but not all high performers are high potential."
The critical element in the selection of these individuals is a formal and targeted assessment center that focuses on business simulations that reflect the realities of a particular industry and identify the leadership behaviors that align with an organizations objectives.
The value of an assessment center in the hi-po selection process can be significant both in the identification of talent as well as the fairness of the selection process. An assessment center can expose participants to business simulation exercises that will provide a fair and competitive environment where targeted leadership behaviors can be observed and measured. Group exercises allow for observations related to innovation, team orientation and assertiveness.
In our organization, we have successfully run our high-potential program with an emphasis on "client centricity" and execution orientation. Senior leaders in our organization overwhelmingly agreed that the exercises differentiated participants in terms of skills and behaviors essential to be a successful senior leader in our organization. This segregation resulted in only 40 percent of the assessment center participants moving into the hi-po program.
Once in the hi-po program, the selected individuals where given projects of critical importance to the organization where they worked in coordination with senior leaders. The distinction between those that succeeded in the assessment center was significant, 46 percent of those that entered the program earned promotions to positions with higher levels of responsibilities. From the group that scored below average, only 11 percent moved into higher positions. In addition, attrition levels where 30-percent lower for those that succeeded in the assessment center.
So how can you design and facilitate a successful assessment center that can help you determine your best high-potential employees?
Select your participants from your high performers. It becomes easier to select individuals to participate in the center knowing that the process will yield the ultimate selections. Utilizing Lavioies assertion that all high potentials are high performers, select high performers to participate in the assessment center. In my experience, some high performers will self-select out of the process if they have a clear understating of the objectives of the program and that segregation should be welcome as desire to participate correlates to success in a hi-po program.
Measure whats important. What are the dimensions of leadership that align with the organizational culture and business strategies? These dimensions need to be in place before anything else as they provide the basis for what will be measured.
Create exercises that simulate senior leader responsibilities. The exercises need to be representative of the level of complexity the next level of leadership will provide. Think of exercises that match their destination as a hi-po, not their current responsibilities. In our client services environment, exercises that demonstrated critical thinking and innovativeness highlighted individuals who later worked on a project that realigned roles in one of our most critical projects.
Senior leadership involvement is critical. The credibility of the program will depend on your assessor group. Their commitment is needed in participating as assessors of future senior leaders.
In order to assess, you must experience the exercises. A challenging exercise can be deceitfully easy if an assessor is presented with the solution before having to arrive at it. Senior Leaders need experience the exercises. With their support of the program and the credibility they instill in those participating, the senior leaders legitimize the outcomes.
It is an event, make it one. The center itself should be a recognition for those invited and should strive to be a positive experience for all, including those that do not perform well enough to be selected as a hi-po.
Let it be a learning experience. Data will be plentiful once the exercises have taken place. All participants, but especially those that were not selected, should learn from the experience.
Having a quantifiable middle step between nomination and selection of high potentials, can help the efficiency and credibility of the program. With those elements in place, your high-potential program will have those that thrive in a challenging environment where the skills and behaviors they exhibit can guide them through the Hi-po experience. As one individual that excelled in both the assessment center and during the hi-po program told me, "the assessment center challenged me to think beyond my comfort zone and it was a feeling that I experienced later in the program so in a way, it not only helped me enter the program, but prepared me for the challenges ahead."
Joaquin Alvarez is a senior HR manager in leadership development at Digital Risk, a central Florida-based independent provider of risk, compliance and transaction management solutions. Send questions or comments about this story to firstname.lastname@example.org.