Look past performance to see potential

Talent decisions are often based on past performance, which favors short-term results, not long-term ability.

Lisa G. Blais

Lisa G. Blais Egon Zehnder, Boston

Imagine the following scenario: A talented young marketing executive jumped off the corporate carousel for a few years to devote time to her young children. Though her former employer welcomed her return, her attempts to get back on the fast career track were continually thwarted. Talent appraisals were heavily weighted toward experience. Demanding assignments requiring heavy travel weren’t offered to her on the assumption that she would refuse them. She also suspected some of her superiors harbored doubts about her commitment because she left the company once before. Their doubts became a self-fulfilling prophecy. Frustrated by her lack of opportunity, she left again, this time for good, and joined a competitor who recognized her potential.

It’s a familiar story. In recruiting, succession planning and many other talent appraisals, organizations too often base their judgments on the individual’s experience and present performance. Both of those are important. But giving experience and performance undue weight and failing to assess for potential can waste promising talent and undermine even the best-intentioned efforts to achieve diversity.

Diverse employees are more likely to be denied opportunities to gain experience. Further, judgments on their performance in their present roles can be clouded by unconscious biases that can be tough to circumvent. If organizations can accurately assess potential and understand what an individual is really capable of long term, they can:

  • Level the playing field once and for all in external hiring, talent appraisals, promotions, high potential programs, succession planning and career re-entry.
  • Identify diverse employees with high potential early in their careers, invest in their development and accelerate it.
  • Actively manage each individual’s entire career trajectory to take advantage of innate strengths and mitigate weaknesses.

Confusing Potential With Promotability

Three elements define an individual’s career trajectory — experience, performance and potential. In other words, what the executive has done in the past, what the individual can do now and what he or she could do in the future. Most organizations do a good job of evaluating experience and performance, but a poor job of evaluating potential, because potential is a widely misunderstood talent gauge.

Global executive firm Egon Zehnder International conducted research and developed a model for executive potential. Led by two senior consultants specializing in talent appraisal and drawing on resources of more than 420 consultants operating from 64 offices in 38 countries, the team:

  • Interviewed 50 executives across industries about how their organizations assessed potential.
  • Reviewed the literature on the topic, including more than 120 research sources.
  • Reviewed appraisals from the firm’s CEO placements and finalist candidates from 2008-2011.
  • Reviewed the appraisals and analyzed the career trajectories of more than 1,000 C-level executives.

The team found that most models for potential and programs to manage high potentials use performance as their primary measure. As a result, potential is typically defined in terms of short-term promotability rather than long-term developmental capacity and career trajectory.

This almost universal confusion leads to an approach to managing potential that relies heavily on how someone is performing at a particular point in time. It confuses ability in the current role with ability to take on a new, more complex and possibly quite different role. It also focuses on the short-term — the next job — instead of on the individual’s long-term potential. This can inadvertently penalize diverse executives who may have followed a nontraditional career path, taken a career timeout for family or been denied opportunities to take on the kind of meaty assignments that bolster a resume.

Based on Egon Zehnder’s research, and after testing and validating hypotheses with board members and top leadership at a number of companies, the research team emerged with a framework to understand and assess potential. This model not only maintains a sharp distinction between short-term promotability and long-term potential, it also offers diversity executives and other leaders the ability to judge people for who they really are.

Giving experience and performance undue weight and failing to assess for potential can waste promising talent and undermine efforts to achieve diversity.

The challenge and opportunity for diversity executives is threefold. First, they should ensure that potential is an integral part of talent assessments throughout the organization — in external hires, internal promotions, succession planning at all levels and in any other assessments that could affect an individual’s career. Second, they should make sure the model of potential being used doesn’t confuse potential with promotability or otherwise define potential in a way that might inadvertently penalize diverse employees. Third, while the diversity executive cannot practically oversee or execute appraisals for potential, he or she can champion the use of models that help level the playing field by identifying it.

Executive potential can be gauged by assessing the degree to which an individual possesses five traits that help to predict executive ability development:

  • Curiosity: Seeking out new experiences, ideas and knowledge; seeking feedback and learning new things in order to change.
  • Insight: Proactively gathering and making sense of a vast amount of information from a wide range of sources, and discovering new insights that, when applied, transform views or set new directions.
  • Engagement: Deeply engaging others, communicating a persuasive vision and inspiring genuine emotional connection between individuals, the organization and the leader.
  • Determination: Managing and maintaining longterm, sustained effort and focus despite obstacles and distractions, while not ignoring evidence that the nature of the activity should change.
  • Motivation: Being energized and engaged on an emotional level with the work of leadership.

Taken together, these traits can help determine executive potential — the capacity to take on leadership roles that are greater in both size and complexity — and the speed with which someone can do so.

Making the Most of Motivation

Motivation plays a special role in determining leadership potential, holding the key to three advantages with this approach: its power, its ability to be applied early in an individual’s career and its ability to answer a question that other approaches often leave unasked: potential for what? Each of these advantages has powerful implications for diversity.

Why it’s powerful: Motives are among the most deeply rooted determinants of human behavior. They are also difficult to articulate and should not be confused with what individuals say their motives are. Explicit, self-attributed motivations are values. Values speak to what people believe and often consciously act on. Motives speak to what people enjoy and get energized by. They are often at the bottom of things they do that they don’t understand. And they are often behind the things people think about when they don’t have to think about anything. They constitute, in effect, who people really are.

By assessing potential in these terms, organizations can look past unconscious biases and beyond experience and performance to the real person within, thus breaking through barriers to diversity that have been hard to identify but that do exist.

When the model can be applied: Because motives are established early in life and the model overall measures deep, stable traits, executives can be assessed for potential at any point in their careers, including the beginning. Although these traits can be developed or improved, they can be difficult to change. It takes time, effort and a clear idea of strengths and weaknesses to move up the scale even a modest amount, so the sooner the assessment the better. Early identification of genuinely high-potential executives enables the organization to invest in the most promising people from the start — including diverse employees — plan their development longterm and achieve greater diversity in the upper echelons of management faster.

What an individual’s potential promises: Because motives speak to what someone likes, enjoys and gets energized by, they underlie the other four traits and drive the degree to which those traits are exercised, as well as their direction. And because each of the four other dimensions of potential can be tied to specific executive competencies later in a career, it is possible to get an extremely refined judgment of not just whether someone has potential, but for what.

Lacking a satisfactory answer, managing someone’s development becomes a process of trial and error, which can lead to derailment. Using potential in conjunction with the other elements of career management determines the right degree of stretch for a high potential’s next role to avoid overloading and failure or underloading and frustration. Diverse executives often get derailed not because they lack potential or ability, but because they’re in the wrong role. Because high-profile derailments can set back diversity efforts, diversity executives should champion a model that answers the question: potential for what?

Because motives are established early in life, executives can be assessed for potential at any point in their careers, including the beginning.

The Ultimate Potential of Potential

Recall that initial scenario. When the marketing executive who took time out for her family returned to her former company, she found herself slotted into a role that mostly dealt with real-time marketing analytics, which was the hot new thing in the department. Had she been assessed for potential, the organization might have discovered that her deepest motive was a desire to influence people and groups. It could then have put her in a more market-facing role and groomed her not just for a bigger role in the function, but for a senior leadership role in which people flourish who possess her combination of traits. Had she been assessed for potential before her hiatus, the company would not only have left out the welcome mat, leaders would have told her she would be given stretch assignments, groomed for bigger things and quickly restored to her place on the fast track.

As in her case, many of the highly nuanced talent challenges that business leaders face have their origins in inadequate assessment of potential. Leaders can cut through the complexity by understanding the critical dimensions of potential and putting them to work developing diverse executives. The benefits can be great — including the business benefits of diversity, wiser investments in talent and an enhanced employer brand. The human benefits can be even greater — giving promising people the opportunity to achieve their full potential. These benefits aren’t obtained in isolation, but in the wider contexts of overall talent management and diversity and inclusion. But at the deepest level of those wider activities lies the mechanism to ensure their success: a genuine understanding of how far and how fast all of an organization’s people can go.

With kind permission of Diversity Executive.

Lisa G. Blais

Lisa G. Blais Egon Zehnder, Boston

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