Promotion Potential: Why It’s the Weakest Talent Management Measure Today

Illustration by istockphoto.com
Illustration by istockphoto.com

One of the weakest talent management measurements today is the estimate of advancement potential.

Organizations know they have problems measuring potential. In a recent global survey of 73 companies, 91 percent of companies said they were challenged to identify high potential individuals early in their careers (Corporate University Exchange, Leadership 2012 Survey).

Most technology providers provide no methodology for measuring advancement potential and simply provide a field to be filled out by a manager. Human resource departments also typically fall short when it comes to providing a process for generating reliable and accurate measures of potential.

A highly subjective guess

In the absence of guidance or methodology for arriving at a more accurate estimate, managers simply make a highly subjective guess. This opinion may be vetted with other leaders to calibrate opinions but they still all rely primarily on what they know about the individual. The bulk of the information considered is simply their current and past performance. Although a common practice, this is a deeply flawed nomination process.

Transitions into higher levels of leadership have very different competency and experience requirements as well as different kinds of challenges. The qualities and competencies that are responsible for outstanding current performance in lower level leadership roles may be of limited value in higher level positions.

In some cases they may actually interfere with higher level success. For example, high attention to detail may have great value for a first level supervisor. However, it could prove to be a drawback for a senior leader if it interfered with taking a broader perspective or if it resulted in micro-managing work.

Research bears this out. Seminal research on this topic was reported more than two decades ago in a book called “Lessons of Experience” (McCall, Lombardo, and Morrison, 1988). Their key finding was that numerous executives derailed when they tried to depend on the same skills that had been successfully used in the past to achieve top performance.

Skills used in the past had little value in an entirely different context. Senior level positions required a much different set of skills. More recent research reinforces this finding. A study by the Corporate Leadership Council in 2005 suggested that only 29 percent of top performers were, in fact, high potentials. Conversely nearly all high potentials were also top performers.

An alternative approach

If performance is such a bad predictor of potential, how should it be viewed and what alternatives exist? Performance should be viewed as a necessary but insufficient threshold condition for being seen as a high potential. It is hard to view someone as a high potential individual if they are not being successful in their current role.

An alternative view of advancement potential is illustrated in this multi-dimensional model:

The first dimension of this model focuses on “raw potential” which are innate qualities of the individual. The first element in this dimension is behavioral predisposition. This element is concerned with whether the individual is naturally predisposed to leadership roles.

Personality constructs with proven validity for predicting leadership success can be used as a norm based measure of this element. The second element is cognitive ability. This element is concerned with whether the individual has the capacity to understand and handle the complexity of problems, issues, and challenges associated with senior level roles. Standardized cognitive ability tests provide a reliable measure of this element.

The second dimension of the model focuses on the career preferences and interests of the individual. It takes a motivated individual to begin to transform raw potential into true potential.

The importance of motivation to advancement is huge. We all know someone who was able to achieve great things with only modest capabilities because they were so highly motivated. Career aspirations and interests can easily be obtained from a short structured interview with the individual.

The third dimension is experience. Experience is the mechanism by which a motivated individual can transform their raw potential into true potential. Everyone knows experience matter — but which experiences are the most transforming? Fortunately there has been considerable research on this topic and norm based measures of key leadership experiences are now available for use. An additional value of these measures is that it identifies experience gaps that can be addressed in the individual’s career development plan.

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The final dimension is demonstrated behavior in competencies important to senior level positions. This measure can best be obtained through behavioral simulations that reflect the challenges faced in senior level roles. While these assessments can be expensive, they can provide the individual with behavioral insights that can become a key part of their career development plan.

Putting it together and acting on the data

Organizations will likely vary in how they want to weight the different measures to arrive at an integrated estimate of potential and they will also likely still want to factor in other leader’s opinions of advancement potential. However, a combination of these measures provides a good estimate of the current potential of an individual. I say “current” potential because the model recognizes that greater advancement potential can be realized through heightened motivation and a broader exposure to leadership experiences.

Career development plans can easily be established for individuals to address the specific gaps identified in their experience base or competency performance. Experience gaps could be addressed through:

  • Stretch/Special Assignments – Stretch assignments should be challenging in nature and designed to fill specific experience gaps. Special assignments provide an opportunity to acquire new knowledge, learn new skills, and build a broad based network of contacts.
  • Action Learning Projects – Action Learning involves working with others on projects that have immediate practical benefits for the organization and affords individuals an opportunity to gain targeted developmental experiences.

Senior level leadership competencies could be developed through:

  • Mentors/Coaches – Mentoring and coaching relationships with more senior leaders are important to developing an appreciation for the realities and demands of higher level jobs. The mentor provides a window into senior roles and passes on important learning and insights that have been acquired from their experience. Professional career coaches may also be assigned to high potential individuals. A key component of the mentoring or coaching process is to provide formalized feedback on the ongoing development of senior level competencies.

Potential is not set in stone

The identification and development of high potentials is a key talent management process in organizations. When done poorly, deserving individuals are overlooked and undue investments are made in false positives.

In both cases, individuals become demoralized and lose confidence in the process while the organization will suffer from a lack of adequate bench strength for the future. Traditional static views of potential result in “winners” and “losers.” Individuals who are not seen as having high potential can feel as if their careers are over.

With a multi-dimensional view of potential, potential is not set in stone; it is a dynamic quality that changes over time. This view of potential overcomes the demoralizing effect of traditional approaches to measuring potential.

An analytic approach based on predictive measures improves the accuracy of potential judgments. While investments should be made in all individuals to improve capabilities, differential investments can be made in those individuals that have the highest current potential. A better measure of potential results in less future promotion failures and overlooked investment opportunities.

An additional value of this approach is the level of granularity it provides in targeting developmental needs. A clear picture of an individual’s gaps informs the types of developmental strategies that make sense for that individual.

Advancement potential does not have to be the weakest talent management measure today. We can now do much better.

Dr. Patrick Hauenstein is President of Omni Leadership, which offers a comprehensive suite of talent management software. He has held senior leadership roles in the world’s foremost HR consulting companies and has a record of successfully developing world class talent management solutions. His combination of broad business perspective and deep technical expertise provides unique insights into current talent management issues. Contact him at pat.hauenstein@omnilx.com.

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