Connect with us
Issue 03 July 2014
How to spot talent in the 21st century
Hire for potential, not for skills. That is the radical proposition that has put Claudio Fernández-Aráoz, Senior Adviser at Egon Zehnder, on the cover of the June 2014 edition of the Harvard Business Review. There, Fernández-Aráoz notes that organizations typically emphasize competencies when hiring or promoting staff. But today business is too complex – and the market for top talent too tight – for that model to work. “We can’t predict the competencies needed to succeed even a few years out,” he writes. “It is therefore imperative to identify people with the highest potential.” Fernández-Aráoz defines potential as the ability to adapt to ever-changing business environments. He is therefore convinced that organizations must transition to a new era of talent spotting – one in which evaluations of one another are based not on brawn, brains, experience, but on potential.
> Full story: Claudio Fernández-Aráoz, “21st-Century Talent Spotting” in Harvard Business Review (June 2014) (recipient not to forward)
Quotas fail to close corporate gender gap
One look at the top companies in Scandinavia illustrates how policies aimed at closing the corporate gender gap are still falling short of putting women in the CEO role, reports the Wall Street Journal. Of 145 big Nordic companies only 3% have a female Chief Executive, compared to 5% of Fortune 500 companies. In spite of Norway’s 40% quota for boards, none of its 32 large-cap companies is run by a woman. The Finns have also struggled: Despite having the most women on company boards in all of the EU, none of Finland’s 27 biggest companies has a woman at the helm. To get more women to the top, companies need to start at the bottom, conclude many Nordic women. If there must be a quota, it should be for recruitment, to fill the pipeline – so that there are more women to choose from when it comes to filling management positions.
> Full story: Christina Zander, “Even Scandinavia Has a CEO Gender Gap”, in Wall Street Journal (May 21st, 2014)
For further insight, read: “To get diversity right, get potential right – Why proper talent assessment is a powerful driver in creating diverse organizations” by Laurence Monnery and Lisa G. Blais, Egon Zehnder
Strategic role for communication drives profits
Organizations in which corporate communication is involved in strategic planning are likely to have a better reputation, writes The Holmes Report, citing a study from USC Annenberg School for Communication and Journalism. Researchers asked 347 senior corporate communicators to examine three indicators of their perceived contribution: participation in strategic planning, the extent to which communications-related recommendations are taken seriously by senior management and the function’s perceived contribution to financial success. 40% of respondents report that communication plays an active role in strategic planning, 59% agree that recommendations are taken seriously by top management, and 44% agree that their senior leadership believes communication enhances financial success. These indicators suggest strongly that companies are giving communication a greater role in decision making than was previously the case, and are benefiting from that change.
> Full story: “PR Budgets Bouncing Back, Strategic Role Increasing” in The Holmes Report (June 22nd, 2014)
More: Egon Zehnder’s Chief Communications Officer PG
Energy industry needs creative solutions to fill leadership gaps
Just as the energy industry is on the verge of profiting from the gas boom, decisions made 30 years ago are coming back to haunt it, writes the National Journal. When oil prices dropped in the 1980s, most companies imposed an effective hiring freeze. That has created a gap, now that the baby-boomers are heading for the doors and production is poised to ramp up. Data from 30 top oil, gas, and power companies indicate that 61% of executives are older than 52 and eyeing retirement. 27% are between 44 and 52, while only 13% are younger than 44. In short, there are more executives ready to retire than there are those to take their places. And the ones who are stepping up don’t have as much experience. Experimenting with new ways to fill their management shortages, some companies are using rotational assignments to groom employees for long-term roles, while others have started looking to other sectors, like aerospace or the military, to fill the openings.
> Full story: Jason Plautz, “As Oil Industry Booms, Past Bust Rears Its Head” in National Journal (June 13th, 2014)
For further insight, read “Energy Companies Need To Remake Their Boards, Before Activists Force Them To” by Steve Goodman and Roger Aguirre, Egon Zehnder