Finding strong members for your team is one of the most important skills needed to succeed and a recent Harvard Business Review article, “21st Century Talent Spotting” by Claudio Fernandez-Araoz, provides some strong insights on how to optimize your talent search. With skills and competencies now the key to finding employees, rather than past experience, you must become skilled at judging potential. This situation is exacerbated by the rapidly changing nature of the tech and game spaces, what worked yesterday are not necessarily the skills you need today.
In the last millennium, workers were selected for physical attributes which readily translated into higher success at physical labor, from building a canal to fighting a war. Business then evolved to judge candidates on intelligence, experience and past performance. Much work was standardized, so if you were looking for an engineer or an accountant or a CEO, you would find somebody who has already succeeded in such a role and there was a high likelihood they would replicate this success. Then hiring evolved to the competency model, which stipulated that managers (and other workers) be evaluated on specific characteristics and skills that would help predict outstanding performance in the roles for which they were being hired. Hiring managers would decompose jobs into competencies and look for candidates with the best combination of these skills.
In the Fernandez-Araoz article, he shows we are in a fourth era were the focus much shift to potential. In a volatile, complex and ambiguous environment (which describes most tech companies I have worked for), what makes someone successful today probably will not suffice tomorrow as the company’s strategy or situation changes. The key issue now is not whether your team has the right skills but whether it has the potential to learn new ones.
Top talent is rare
The first problem with this approach, though, is that potential is much harder to determine than competence. Senior quality talent is also becoming more difficult to find as its value is magnified by globalization, demographics and weak internal leadership pipelines. Globalization forces companies to reach beyond their home markets and to compete for the people who can help them do so.
The impact of demographics on hiring pools is also strong. The sweet spot for rising senior executives is the 35-44 age bracket, but the percentage of people in that range is shrinking dramatically.
Third, companies are not effectively developing their pipelines of future leaders. 63 percent of CEOs surveyed by PricewaterhouseCoopers responded that they were concerned about the future availability of key skills at all levels. Other studies have confirmed this shortfall. Related, over 50 percent of senior leaders will be eligible for retirement in the next two years yet half of them do not have a successor in place.
As Fernandez-Araoz points out, when you combine these three factors you get a war for leadership talent. Although a potentially huge issue, it is also a great competitive advantage if you can identify and recruit talent with potential.
Better hiring criteria
The first step is to get the right people into your company. There are five strong indicators to leaders’ potential:
- Motivation. The first indicator of potential is the right kind of motivation, a commitment to excel in the pursuit of unselfish goals is crucial for potential. High potential candidates have great ambition but also aspire to big, team goals, show deep personal humility and invest in getting better at everything they do. Motivation is crucial because it is a stable quality.
- Curiousity. The second indicator is curiosity, which manifests itself in people seeking out new experiences, knowledge, and open feedback an openness to learning and change.
- Insight. The third indicator is insight, the ability to gather and make sense of information that suggests new possibilities.
- Engagement. Next is engagement, a flair for using logic and emotion to communicate a persuasive vision and connect with people.
- Determination. Finally, yet incredibly important, is determination. Determination manifests itself in the wherewithal to fight for difficult goals despite challenges and to bounce back from adversity.
Someone who incorporates all five indicators is much more likely to be successful in the future than someone who had simply been successful in the past.
A challenge you then face is how do you know if a candidate has these traits. This is where their history is crucial, have they exhibited these traits in past jobs (more importantly than their win-loss record). You also should conduct in-depth interviews or career discussions, while spending time on reference checks rather than just using them to check off a box.
Regarding the in-depth interview, Fernandez-Araoz proposes several great questions:
- How do you react when someone challenges you?
- How do you invite input from others on your team?
- What do you do to broaden your thinking, experience or personal development?
- How do you foster learning in your organization?
- What steps do you take to seek out the unknown?
- Provide concrete examples for these questions.
- Go deep in your exploration of motivation, insight, engagement and determination.
Companies that emphasize the right kind of hiring vastly improve their odds of finding talent with great potential. A key is to have everyone involved in the recruitment process focused on assessing these traits.
Smart retention
As anyone in the Bay Area knows, recruiting the right people is only part of the battle, as employees are quick to move on to other opportunities. Thus, it is also important to focus on retaining the talent with the most potential. You cannot train and build leaders if the top people constantly leave. The strongest way to keep people is to understand and consider what your high potentials want most from your company. Fernandez-Araoz cites Daniel Pink’s book Drive
- Autonomy. The freedom to direct our lives. Give high potentials autonomy over what they do, when they do it, whom they do it with and how they do it.
- Mastery. Our craving to excel. Help your high potentials achieve mastery by setting difficult but attainable goals and eliminating distractions.
- Purpose. The yearning for our work to serve something larger than ourselves. Engage your high potentials in a greater team, organizational or societal goal.
While compensation matters, autonomy, mastery and purpose are the driving forces for keeping high potential happy and retaining them.
Stretch development
While recruiting and retaining high potentials is critical, the third key element is offering development opportunities that push them out of their comfort zones. While you do not want to push people beyond their limits (and thus have them fail), you want well-rounded, values-focused leaders who see the world through a wide-angle lens and the appropriate stretch assignments are what helps people get there.
Pushing your high potentials up a straight ladder toward bigger jobs, budgets and teams will continue their growth but not accelerate it. Diverse, complex, challenging and uncomfortable roles will. Place your highest potential leaders rotating through mission critical roles. Then move them into permanent roles with a focus on gaining geographic, cultural, product and customer facing experience.
Key takeaways
Finding and growing the best leaders in critical for success in today’s volatile business environment. Only those leaders with high potential will thrive in this business environment. There are three steps crucial for success in creating a great company
- Recruit talent with high potential, rather than simply a strong track record. You can judge their potential by looking at their motivation, curiosity, insight, engagement and determination.
- You must retain your high potential talent by focusing on autonomy, mastery and purpose.
- You must stretch your high potentials by offering them development opportunities that push them out of their comfort zone.
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