First published in theHRDIRECTOR magazine, Issue 156, October 17. Reproduced with permission.
For most companies, succession planning remains a subjective process, prone to all the vagaries of human inconsistency and bias. At the heart of the problem is a lack of understanding about how to assess an individual's potential -- how to predict an individual's performance in a role they have never filled.
The consequence of getting it wrong is placing people in jobs they aren't suited for, so they make poor decisions with huge implications for your revenue, customer relationships and brand.
Most succession planning perpetuates the Peter Principle, where candidates are selected for new roles based on performance in their current role, rather than on abilities relevant to the intended role. This results in people being promoted up to the point where they can no longer perform effectively, given their talents.
To avoid this, organizations need to abandon their reliance on subjective feelings and gut instincts about candidates' potential and adopt a more analytical, scientific approach.
One of the biggest problems is senior executives often inadvertently select successors who are a lot like themselves. This is further exacerbated by the effect of "confirmation bias" defined as the process by which someone accepts data that supports their original belief or gut feeling and unconsciously rejects data that does not. In the absence of overwhelming data pointing to the best solution, executives tend to put more weight on their gut feeling than the available data in making promotion decisions.
Leading HR departments are already adopting a more analytics-driven approach, using consistent methods to identify, measure and match the talents of individual candidates with the attributes that are critical for specific leadership roles.
At Gallup, we have studied and predicted talent for more than 40 years. We believe four elements of an individual's potential can be assessed and measured against the requirements of any given leadership role. They are:
- Natural talents: Does the candidate have the talents required for the role in question? Innate talents like empathy, honesty or strategic thinking are difficult to develop if they're not part of a person's natural makeup.
- Leadership ability: Can the candidate multiply their efforts through others and build winning, engaged teams?
- Self-awareness: Does the candidate recognize his or her own strengths and weaknesses? Can they be smart about how they get things done?
- Critical skills and experiences: Has the candidate acquired the kind of experiences that are vital for success in this role? These are the breakthrough experiences that really matter for specific roles, as demonstrated by people who were successful in those roles.
Analyze your existing leadership pool to identify the characteristics that differentiate the very best performers from the rest. These are the traits that lead to success in a role.
High-performing individuals who present as high potential still have to possess talents that match the needs of the role. At Gallup, we define "talent" as naturally recurring patterns of thought, feeling or behavior that can be productively applied. The very best succession planning should predict for which role each high-performing, high-potential individual is best-qualified. Similarly, low-performing individuals with high potential may simply be talented people in the wrong role.
Here are some practical steps you can take to turn your succession planning from an imprecise art into a more exact science:
- Introduce broad-based objective performance measures. Objectively measure critical performance elements, such as sales, productivity, accuracy and timeliness, alongside employee and customer engagement metrics.
- Develop an effective talent-prediction tool. Use a consistent talent-prediction process (mapping people's innate talents against the requirements of leadership roles) -- it will allow you to forecast an individual's potential in a specific role more accurately.
- Research breakthrough experiences for success. Understand the breakthrough experiences that current successful executives in a role have been through to create clear definitions of the experiences that really matter.
- Conduct targeted leadership development. Your leadership development programs must be specific and targeted to the needs of individuals and the company. One of the most critical traits to develop in future leaders is self-awareness, followed by how to fully leverage one's strengths.
Once you have a reliable data set against which you can assess a candidate's potential in any given role, your succession planning process becomes consistent and transparent. Everyone can see what they need to achieve to gain promotion, and individual promotions can be objectively judged as appropriate and deserved.
Identifying and developing emerging leaders requires the investment of time and resources. But this will be repaid many times over by the talented, high-potential people you will be able to promote to lead your company into the future.
Gallup supports development at all levels within an organization. We help you select your emerging leaders and position them for success.