Identify your future stars


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Future winners are investing in the right leaders today. As in past recessions margins are being cut, costs pushed down, currencies are shifting – and future winning organisations are starting to reposition themselves.

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Identify your future stars

  1. 1. Relationship counselling: Realising public-private partnership growth opportunities2 View Point ViewPoint I Reward in a downturn Identify your future stars F uture winners are investing in the right leaders today Cost-effectively identifying your future leaders using the Growth Factor Inventory Future winners are investing in the right leaders today. As in past recessions margins are being cut, costs pushed down, currencies are shifting – and future winning organisations are starting to reposition themselves. These winners invariably see the writing on the wall first, take Leadership development advantage of market movements and realign their resources to happens by design, not where they can make most money. This is the message from our by accident annual Best Companies for Leaders research which shows that these winners are already thinking about, and investing heavily in, Per cent Top 20 companies the future leaders they need to identify and grow. All 80 60 The big difference this time round is processes on their new success criteria. that they want to know the odds: to They also make sure they keep their 40 place bets on the right employees to next-generation leaders engaged 20 invest in and to do so at significantly and energized despite the difficult reduced cost. market conditions. That way, when 0 the economy swings back, they will Talent management driven by clear business strategy Formal processes to assess talent Formal program to accelerate leader development To put it simply, once they have worked be ready for repositioning growth and out how to re-organize and operate stealing a march on the competition. differently, they are investing heavily in redefining what that looks like for This article offers our best thinking the people agenda, particularly their on the most cost effective way leadership competency frameworks. to identify future leaders – those They see this as the first step in who should get the cream of your Source: 2008 Best Companies for Leaders study re-aiming their talent management development budget. ©2012 Hay Group. All rights reserved
  2. 2. 2 ViewPoint I Identify your future stars The Growth Factor Inventory (GFI) in brief Where is the GFI most helpful? The Growth Factor Inventory is based on our established The GFI is designed primarily to be used in entry to middle research on high potentials which began with the levels of an organization, to identify who best to invest publication of ‘Potential – for what?’. This research leadership development spend with – those most likely established four growth factors that best predict the to grow through such investments. fulfilment of potential: eagerness to learn, breadth of For clients who maintain a ‘high potential’ program with perspective, understanding others and personal maturity. accelerated development, this is an ideal tool to add to While similar in some ways to competencies, the growth their selection process and to provide feedback early in the factors are designed to predict success in benefiting from high potential program. learning experiences, particularly leadership development The tool is also particularly useful where there is a need experiences, rather than success in a specific role. They also to sieve a large pool of applicants such as in open access provide a solid foundation for the competencies that are HiPo programs. As a 360o survey it is only appropriate for likely to be needed in a wide range of leadership roles. internal candidates. An interview version can be used to measure external candidates. Improving your odds Readiness for growth Even if you’re in the regrettable position of needing to downsize, The four growth factors were identified through a combination of you still need to retain and develop the best people – the leaders of empirical research using our database of outstanding leaders and tomorrow who will take your business forward. Ironically our research a global team of executive selection and development experts. shows that, even during a recession, these are the people who are The research indicated that people who were stronger in the most likely to leave, just at the time when you need them most. growth factors consistently out performed over the longer term. These characteristics were seen to account for why they gained the But how do you identify those key individuals with high potential? most from accelerated development programs/role placements The norm has been to rely on line managers to place this bet. and why they delivered the greatest return on their organizations’ The problem is that while they tend to be reasonably good at investment in them. This contrasted with those individuals who did identifying current high performers, they can be notoriously not go on to achieve executive success, who showed weaknesses in inconsistent at picking out the longer term winners. This is, of their ability to grow through learning and experience. course, why organizations often make mistakes; appointing talented people to roles for which they turn out to be ill-suited. External partners can be brought in to establish whether The four growth factors someone shows high potential through a structured and detailed assessment process (assessment centers and organizational talent 1 Eagerness to learn reviews). But interviewing large numbers of senior and mid-level Willing to take a risk in learning something new managers is cost prohibitive at the best of times. To address this, Hay Group has developed a cost-effective online 2 readth of perspective B diagnostic to help organizations identify high-potentials quickly Taking a wider view on issues, bringing in and at minimum disruption to the business. additional points of view 3 Understanding others Accurate understanding of other people’s thoughts and experiences W hile managers are reasonably good at identifying current high performers, 4 Personal maturity they can be notoriously inconsistent The ability to take feedback and difficulties at picking out the longer term winners as a chance to learn and grow. ©2012 Hay Group. All rights reserved
  3. 3. 3 ViewPoint I Identify your future stars Why gamble on current performance, when you can invest in long term growth? The data bears out what we know about high potentials from our wider research. High potentials tend to take a more in themselves and in their ability to to the next role; it identifies individuals intuitive, flexible approach. They tend achieve the goals and standards they who have the potential to become to involve others more; asking for input, set out for themselves and their teams. the leaders of the future. It provides prioritizing time for others and making In these increasingly straitened times, organizations with a quick and effective space for coaching. They tend to be it’s important to identify those people guide to where they should place their warm in their relationships with others; who can make a real difference to an bets when investing in their talent. And team members, peers or customers. In organization, both now and in the it allows organizations to do this in an addition, high potentials tend to have future. The GFI doesn’t just identify efficient and cost-effective way. a strong sense of ‘self efficacy’ – a belief talented individuals who can step up Climate created Leadership styles Per cent 100 80 Percentage creating different climates 80 60 60 40 40 20 20 0 0 High GFI scores Low GFI scores Affiliative Coaching Authoritative Democratic Coercive Pacesetting Motivating climate High GFI scores Demotivating climate Low GFI scores When we look at the leadership styles of those scoring high on the GFI, we can begin to see how they achieve this. The least common Those with high scores on the GFI were styles for those with high potential were coercive and pacesetting, much more likely to: whereas these were the most commonly occurring for the lower potential group. n lead using a longer term perspective and mindset Over all, those with high scores on the GFI, showed an ability (using all the styles) to focus on the task-in-hand, in the same way as the rest of n communicate a shared understanding of the team’s the group (using the coercive and pacesetting styles when purpose (using the authoritative style) appropriate). What differentiated them, however, was the ability to rise beyond the task and connect with each member of their n s et stretching but achievable targets team, responding to individual needs. (using the coaching style) n devolve appropriate levels of responsibility to T hose with high scores their staff (the democratic style) on the GFI showed an ability n and create a mutually supportive, congenial team to focus on the task-in-hand environment (using the affiliative style). ©2012 Hay Group. All rights reserved
  4. 4. 4 ViewPoint I Identify your future stars To summarise, ‘high’ and ‘low’ potential managers were seen to do the following: ‘High potential’ managers ‘Low potential’ managers Involve others Don’t seek others’ input Are engaging Focus on tasks not people Demonstrate warmth Tend to be colder Provide development-focused feedback Provide task-focused feedback Are directive and tough when required May be inappropriately directive and tough Using the Growth 4 Strengthening growth factors Factor Inventory In organizations with a well known high-potential program, it is likely that many individuals will wish to strengthen and demonstrate their growth potential. The GFI helps them focus their efforts on the right behaviors and take The ability to identify long term potential is what makes responsibility for their learning. the GFI such a valuable tool. If short term potential is the fit between a person’s current capabilities and a likely next 5 Preparing for development level role, the growth factors go one step further, taking into Using the GFI just before a leadership development account a person’s longer term capacity for personal growth. program can help participants shift into a growth mindset. It communicates the expectation that participants will play 1 Identifying potential their part in making best use of learning opportunities, and Managers often have difficulties in making the distinction clarifies the growth factors that allow them to develop and between performance and potential. The GFI helps them to demonstrate their potential. do this more effectively. It can be used as an input to talent review discussions to help establish how best to invest 6 Identifying organizational issues leadership development spend. Certain organizations, or parts of organizations, may have systemic issues that inhibit growth factor development. 2 Filtering candidates For example, an over-focus on immediate performance may The tool is particularly useful where there is need to sift inhibit breadth of perspective or even eagerness to learn. a large pool of candidates, such as in an open access Certain recruiting or hiring practices may select groups that, high potential program. As a 360o instrument it is most overall, are low in understanding others. The GFI spotlights appropriate for use with internal candidates. For externals these issues, so that they can be addressed and resolved. the same growth factors can be measured through the Growth Factor Interview. 3 Transparent communication There are significant dangers associated with simply labelling people as high potential. The GFI helps mitigate those dangers by making the behavioral components of high potential clear, both to those who end up in the high potential category and those who do not. Communication about the behaviors that get a person classified as high- potential helps ensure that people continue to use and develop these behaviors, rather than becoming defensive about the label (and thus decreasing the very qualities that that you’re looking for). ©2012 Hay Group. All rights reserved
  5. 5. 5 ViewPoint I Identify your future stars Connecting up the dots The data from our work with the professional services organization makes interesting reading, particularly when we compare the he tools and assessments T characteristics of those high and low on the growth factors, with the other data collected on leadership styles and climate of engagement we had used before the GFI created by the individuals with their teams of direct reports. weren’t able to pick up The table opposite shows the data we collected (with the names leadership potential in such changed). Only the top eight individuals were identified through a quick and accurate way the process as having high potential. They are separated from the others in the table with the red line. When we compared the characteristics of the high potentials Understanding Eagerness to to those with lower scores, there were a number of significant perspective Overall GFI Breadth of maturity Personal average points of differentiation. 85 per cent of those with high GFI scores others learn Name created engaging, motivating work climates with their teams; for Felix Leiter 6.1 6.6 6.1 6.6 6.4 those with low GFI scores this was only 15 per cent. Tilly Masterson 6.7 6.4 5.8 6.0 6.2 An additional point of differentiation was that 60 per cent of the Godfrey Tibbett 6.6 5.7 6.3 5.9 6.1 high potential group had three of more dominant leadership styles Rene Mathis 6.1 6.1 5.9 6.3 6.1 compared to only 13 per cent from the lower group. In particular, Bill Tanner 5.7 5.9 6.4 6.3 6.1 they are more likely to create a shared understanding of the Harold Strutter 6.3 5.4 5.6 6.4 5.9 purpose of the team; set stretching but achievable targets that Wai Lin 5.9 5.7 5.9 6.0 5.9 the team understand; devolve appropriate levels of responsibility Charles Robinson 6.1 5.7 6.5 5.1 5.9 to their staff; and finally to create a mutually supportive, congenial 85 Julius No 5.9 6.6 5.4 5.3 5.8 team environment. Rosa Klebb 5.4 5.7 4.9 5.8 5.5 Auric Goldfinger 5.4 5.1 5.9 5.3 5.4 Kamal Khan 6.0 5.4 4.8 5.4 5.4 Ernst Stavro Blofeld 5.1 5.6 4.9 5.4 5.3 Karl Stromberg 5.0 5.6 5.6 4.7 5.2 Derek Kananga 5.6 4.9 4.9 5.3 5.2 Max Zorin 4.7 6.1 5.9 3.4 5.0 Aris Kristatos 4.9 4.9 5.1 4.7 4.9 General Orlov 5.0 4.9 4.6 5.0 4.9 Emilio Largo General Koskov 5.0 5.3 4.1 4.1 4.4 4.8 5.9 5.1 4.9 4.8 per cent of those with Frank Scaramanga 4.7 4.4 4.9 4.4 4.6 high GFI scores created Hugo Drax Franz Sanchez 3.9 3.7 3.6 4.4 4.5 4.5 5.0 2.9 4.3 3.9 engaging, motivating work climates Key At 75 per cent or above of the norm group High Between 50 per cent and 75 per cent of the norm group Mid-high Between 25 per cent and 50 per cent of the norm group Mid-low Below 25 per cent of the norm group Low ©2012 Hay Group. All rights reserved
  6. 6. 6 ViewPoint I Identify your future stars Case Study – Identifying ‘high potentials’ in a Chartered Institute Hay Group worked with the HR director (let’s call him Tom) of a professional services organization. Tom came to Hay Group because he Tom was surprised to find that many had no doubt that Janine had the wanted to get an accurate picture of of the managers who had good capability to be a future leader. potential in his mid-manager population, performance ratings had low leadership However, although Janine was and identify future senior leaders. Like potential (14). He was most surprised undoubtedly a high performer, her many managers, Tom found it difficult by ‘Charles’, one of his team members, scores on the growth factors came out to distinguish between performance whom he’d previously labelled as being low (below 25 per cent of the norm and potential. In the past this led him to too ‘emotional’ to be considered as a group) for three of the four factors. promote highly performing individuals high-potential. Despite this, Charles to leadership roles, only to find that was strong on all four of the growth Tom admitted that the results had many of these individuals struggled factors. This suggested he had many come as a bit of a surprise to him. when faced with the challenge of key attributes which would help him Had he not used the GFI, he said he managing a larger team. to become a successful leader in the would have developed and promoted future. It was clear to Tom that his Janine, making the mistake of promoting 24 managers completed the short 3600 preconceptions of Charles had been a high performer as opposed to GFI survey. Feedback was also collected clouding his judgement of him. someone with longer term potential. from their direct reports on their styles ‘Janine’, an excellent manager, was of leadership and their impact on the another challenging case for Tom. She et an accurate picture G climate of engagement their teams experienced. We also looked at their had a high Emotional Intelligence score, of potential in your recent performance ratings as a measure used a variety of long term leadership mid-manager of how well they were doing in their styles and created an exceptionally current roles. motivating climate for her team. Tom population High potentials tend to take a more intuitive, flexible approach For more information: ©2012 Hay Group. All rights reserved