A food retailer hires a CEO who seems to possess the ideal credentials and skills. He’s been successful in a smaller competitor, and time looks right for him to step up to a bigger role, in a bigger company. Alas after six months it’s not working out, he’s ill-prepared to handle the scale of the business.
In contrast, a small software firm recruits a young project manager from a marketing agency. Although lacking relevant industry experience, they hired on an instinct that the woman will succeed, valuing her energy, attitude and ambition. The new hire quickly settles, and enjoys rapid growth in influence and responsibility. She’s made an impact.
What’s the difference in the two hires?
Potential, and specifically, an ability to be agile, adapt and grow into a different, more challenging role and more complex business. This type of potential is the hallmark of likely success, and narrated in a Harvard Business Review article, recruit for potential, not experience.
As business becomes more volatile and complex, and the market for talent gets tighter, organisations must adapt their hiring philosophy and criteria to talent spotting. Where traditionally, candidate evaluation is an assessment based on experience, competency and track record, future winners will recruit on potential – for growth, for learning, and for future roles, not just the business of today.
For example, when hiring a new Finance Director, you’ll often find several candidates have the right credentials, experience and competencies. Instead, shift the focus onto their ability to offer insight, their style of engagement and tone of voice in conversation, evidence curiosity, and propensity to lead. Do they fit with, and can articulate, your cultural values?
Look beyond what you see in front of you today, and envision a picture of tomorrow. The question is not whether candidates have the right skills, it’s whether they have the potential to learn new ones. Don’t evaluate candidates just for today, look at their potential alongside the future vision of the organisation, and potential as a long-term asset.
Many company ‘fast-track’ programmes for well regarded promising managers are really populated with employees who are performing well, and are assumed to have the best chance of doing well in the future. Is that is a safe strategy?
Think about it, how long it would take someone to learn her job, with 85% of the capabilities. Three months? Six months? If someone has been in a role for six years, is that genuinely six years and has their been growth in the role - or is it one year six times over?
Of course hiring for potential doesn’t work in all sectors - to be a pilot, you have to be well trained with relevant ‘flying hours’ experience to progress, but what’s more important, potential to embrace change effectively, or a safe pair of hands with an obvious fit, based on track record?
Douglas Ready, Professor of Organizational Behaviour at London Business School, has undertaken research on high-potentials. His results showed that the top 3% to 5% of talent can be defined as ‘high potential’, with intangible factors that truly distinguish them from the pack, as follows:
1. A drive to excel High potentials are driven to succeed. They are more than willing to go that extra mile and realise they may have to make sacrifices in order to advance. Sheer ambition may lead them to make hard choices. They are explorers and take on the challenges of leaving their comfort zones in order to advance.
2. A catalytic learning capability The high potentials identified by Ready possess what he calls a catalytic learning capability. They have the capacity to scan for new ideas, the cognitive capability to absorb them, and the common sense to translate new learning into productive action. High potentials are always searching for productive ways to blaze new paths.
3. Dynamic sensors Successful high potentials have a well-tuned radar that puts a higher premium on quality results. Beyond judgment, high potentials possess an instinct for timing, to quickly read situations, and a nose for opportunity. They have a knack for being in the right place at the right time. They are anticipatory.
4. They are willing to endure hardship Work isn’t always easy, there are times when a customers need more, and they need someone to stay late to render assistance. High potentials make self-sacrifices at that moment, they don’t walk away. The never enough mentality delivers focus to generate a buzz and goodwill to dig in when it matters.
5. A knack for seeing the bigger picture. Employees with high potential tend to be engaged at all times and show an interest in learning beyond the immediate scope of their role. They are curious about the organisations’ goals and wish to help in achieving those outcomes. In their mind, they see their own success as being directly tied to the success of the organisation.
As future leaders, high-potential employees should be identified early and developed effectively. By building their leadership skills and competencies, organisations can lock-in a competitive advantage for the future. However, identifying high-potentials in an organisation can be difficult.
Firstly, high performance is easy to observe, it often drowns out the less obvious attributes and behaviours that characterise high potential capabilities. Secondly, few organisations codify the attributes and competencies they value, and don’t know what to look for to assess potential.
The high-potential identification process is vital to filling an organisation’s leadership pipeline. Beyond routine internal promotion processes or development efforts, this selection process represents an investment decision, just like an investment in product development or a marketing launch.
Working with major organisations for over ten years, and undertaking our own research, Collingwood has developed insights on the high-potential challenge. We’d welcome the opportunity to share our perspectives with you for your own organisation growth and development.