TECH’S GROWING NEED TO IDENTIFY AND RETAIN EMERGING LEADERS Given the fierce competition for critical skills, and the complex requirements of leading effectively in tech, the costs of losing talent are high. Developing and retaining in-house talent is the smartest investment an organization can make in these circumstances. While many companies focus on high- potential talent development solely at senior levels, those that extend development below senior levels are 4.2 times more likely to outperform financially than those that don’t. Organizations need diverse talent, both by promoting from within and hiring new perspectives and skillsets from the outside. However, research reveals that the benefits of developing and promoting from within versus hiring from the outside are plentiful, including significantly decreased costs and significantly increased productivity. Put succinctly: a wisely promoted insider will typically outperform an outside hire for at least three years and substantially lesser cost (see Wharton professor Matthew Bidwell’s Paying More to Get Less: The Effects of External Hiring Versus Internal Mobility ). This presents one of the most powerful research-backed arguments for promoting versus hiring only externally. THE CHALLENGE OF ACCURATELY IDENTIFYING LEADERSHIP POTENTIAL We find that many organizations lack a clear understanding or measure of leadership potential. The distinction between high performance and high potential is critical. We expect you can think of individuals who were stellar performers at one task, but
they actually failed when tapped for leadership. Several studies estimate that only two or three out of ten high performers are also high potentials in leadership. As recent neuroscience studies have demonstrated, managers are notoriously bad at identifying leadership potential in the ranks since their judgment is influenced and marred by various hardwired biases. We understand the dilemma. If your data predominantly reveals today’s performance, what can you depend on to evaluate someone’s potential? The most common error is believing that someone is “just like me” or that the individual is reminiscent of what you were like earlier in your career. When you feel that bias, you are more likely to believe someone has potential. Or the opposite— you may inadvertently overlook someone’s capabilities if they are unlike you. While these are problems in every industry, the tech sector adds additional complexity, uncertainty, and challenges. The introduction of new technologies, agile methods, and experimental work arrangements accelerate the way work gets done in the tech sector, arguably more than in any other industry. That means predicting someone’s leadership skillset for future success is even more problematic. IDENTIFYING LEADERSHIP POTENTIAL THROUGH THREE ELEMENTS Accurate identification of leadership potential is difficult, but not impossible. Three primary elements underlie leadership potential, plus an absence of “watch out” factors. These are practical intelligence, personal effectiveness, and aligned motives and values. We want to look
Our colleagues at MDA Leadership created a validated assessment and development experience called Bench Strength. The Bench Strength Experience™ helps organizations identify and accelerate talent development for roles at the Leading Others (front-line supervisor) and Leading Leaders (manager) level. These talent analytics allow organizations to gain critical insights into the breadth and depth of future leadership talent among individual contributors and early-career supervisors already in the organization. Insights guide differential investments in leadership talent. At the individual level, emerging leaders obtain detailed insights and feedback regarding their leadership potential and immersive development experience to strengthen and accelerate their readiness to lead at the Leading Others and Leading Leaders levels. The Bench Strength Experience™ bases results on several scientifically- validated inventories. These tools work in conjunction to measure an individual’s unique combination of motivators, personality characteristics, watch-out factors, and problem-solving capabilities. To learn more about effective succession management at all levels, join us for our upcoming webinar series at: www.mdaleadership.com/events. MDA Uses Data to Measure Potential.
30 | Identifying Future-Fit Leaders
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