Article main image
Oct 27, 2017

Ensuring a company’s long-term survival and prosperity is the underlying driver of any business; however, identifying and developing effective future leaders remains one of the most challenging issues facing companies today. Even when companies claim to have a well-armed lineup of groomed candidates available to step-up when called, the reality is that many new leaders fail spectacularly, being either ill-equipped or ill-prepared to handle the role.

Although there has yet to be one perfect, proven model for identifying and developing leaders, there are some assumptions and approaches that will surely fail a company. There are ways to look at leadership potential from multiple angles in order to better the odds of identifying the right talent to lead your company well into the future.

When it comes to identifying top talent, leadership potential, or planning for succession in an organization, it is often assumed that high performers and leadership candidates will simply make themselves known. After all, this is what we are used to. From piano recitals to city marathons, the exceptional few tend to stand out on their own so why wouldn’t this be the case in a company?

The Brazil Nut Effect

This laissez-fair assumption reminds me of a term I heard years ago: the Brazil Nut Effect. This phenomenon was first described by distributors who transported cans of mixed nuts. They noticed that when the cans were opened after shipping, the Brazil nuts would somehow always be on the very top. Although the vessel contained 4-6 varieties of nuts, the larger Brazil nuts would always make their way up, ready to be chosen first. This had nothing to do with the order of packing, but from a scientific process called granular convection, where smaller particles shift under larger ones when shaken, forcing the larger particles (in this case nuts) to the top.

I have always loved this analogy as it implies that time and motion will just make things happen. Sadly, when it comes to choosing future leaders in an organization, companies would find themselves failing if they simply relied on the Brazil Nut Effect.

Leadership Potential Is Different

Unfortunately, high performance doesn’t always correlate with leadership potential. A CEB report said only one in seven high performing employees also possess leadership potential. If a company used performance alone as an indicator of potential, they would be left with a future leadership team that might be coming up short 83% of the time.

So why not let employees navigate their own ships and claim their career paths? After all, if employees have the desire and ambition to lead others, they will surely make it known right? This would also be a faulty and dangerous assumption for a company to make. Your future leaders might not be shouting it from the rooftops.

If your managers are waiting for employees to declare their own succession plans in a meeting or comment on their development objectives in a performance review, you could be waiting forever. In fact, a Forbes article noted that less than 5% of employees know what they want to do and where they want to be in 5 years. Employees might not be aware of the career paths available to them or their intrinsic set of skills and characteristics that would make them great leaders.

This all means that companies need to be proactive and tactical when evaluating their bench strength and identifying future leaders within the organization. Not only do they need actively seek out individuals with the potential to grow, but they need to scout from multiple angles to ensure all of the pieces will add up to successful leadership.

Scout Future Leaders from All Angles

Gone are the days of relying on annual performance reviews scores, single leadership aptitude tests, or manager intuitions alone for honing in on your company’s potential leaders. These methods simply do not account for enough of the factors needed for an employee to become a good leader.

If you were to search online for ”identifying leaders”’ or “leadership qualities,” you would be bombarded by thousands of lists and articles that claim to have found the right mix of characteristics and skills that make up a great leader. I have personally read hundreds of these articles and although they differ in their approach and prioritization, they have some underlying similarities.

When looking for potential leaders who are more likely to succeed, companies should seek out employees who demonstrate these five traits:

  1. Are competent in their abilities
  2. Care about the company
  3. Have the desire to lead
  4. Have the ability to execute
  5. Are willing to keep learning

McKinsey & Company identified a list of 20 distinct leadership traits, of which four are most essential. See what they are “The 4 Most Effective Leadership Skills.”

But how do you scan your workforce for these leadership beacons? It will take a bit of time and effort but it is possible if you approach things from multiple angles.

Performance Appraisals: Although flawed appraisal processes have left many companies with little faith in the idea, when done correctly and often, performance appraisals can act as a great gauge of job aptitude and competence. If employees are given job-specific goals to achieve and are evaluated on position-centric skills, companies can use the results of these appraisals to gauge competence and the ability to execute and multi-task – factors that make for great a leader.

Many companies are also using appraisals as a way for managers and employees to discuss career planning and paths, giving both parties the opportunity to identify and express interest.

Self-Assessments: Just like appraisals, when approached correctly and frequently, self-assessments give employees the chance to take an active role in their job development, goals, and career planning. Employees might add achievements or objectives not considered by managers, giving companies a way to identify employees who are interested and capable of going beyond their role.

Self-assessments also offer the opportunity to gauge an employee’s accountability and willingness to learn. No employee is ever perfect. Strong leadership candidates own their shortcomings and are willing to learn and adjust in order to improve. When employees are given the green light to show their vulnerability, a company can quickly identify potential leaders with the flexibility for continual learning.

360° Reviews and Peer Input: A big part of successful leadership that is almost always overlooked is the ability to execute from a people-perspective. You could have position-superstars move into a leadership role and fail if they don’t possess the skills needed to engage, motivate, and communicate properly with others at all levels in the company. In a 2017 PR release, Leigh Branham, author of The 7 Hidden Reasons Employees Leave, said “loss of trust and confidence in senior leadership” was the number one reason why employees quit. To that extent, the old adage that people leave people not companies rings true.

Companies need leaders who are able to form relationships, care about their team, can communicate extremely well, and are respected by those around them. One of the best ways to identify these is to ask others. 360° reviews allow companies to go beyond a single manager’s opinion, by gathering input from clients, peers, and even other managers. The result is being able to peel back the onion on an employee’s interpersonal skills and communication abilities in order to hone in on those rare individuals with technical and people skills.

Engagement Surveys: Companies want leaders who can see beyond their own role, are committed to the success of the organization, and offer practical solutions, instead of taking a back seat. Overall, future leaders need to care about the company – a lot. Engagement surveys are a great way to ask the questions that help determine if an employee truly cares. Employees who are confident enough to go against the grain, ask questions, propose solutions, and express knowledge and interest outside of their core position have the potential to become great leaders. Not only will their passion be infectious to their teams, it also indicates they will fight for the longevity of the organization.

Combining the results of appraisals, self-assessments, 360° input, and surveys in reports or a dynamic nine-box talent matrix, allows companies to identify outliers from multiple angles – increasing the odds that employees who stand out, are better candidates for leadership positions.

See “The Case For Junking 9 Box Assessments” for a different take on their value.

Fighting to build a strong leadership team will remain a top priority and challenge for companies. Being able to identify employees within the company who have the potential to grow and lead is step #1. While there are no sure-fire methods for identifying future leaders, it is possible to implement measures that will look beyond traditional assumptions, in order to help organizations find the rare and valuable employees who can succeed in a leadership position.