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Assessing potential
16 December 2011:
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Measuring individuals’ current performance is relatively straight forward, but assessing whether they have the potential to take on greater responsibility is far more difficult, participants in the round table discussion agreed. One participant pointed out that potential is partly to do with individuals’ desire or ambition to lead or at least to move up the organisational hierarchy. “But then the question is, do they have the capability to do this, and we are struggling to answer that question and identify the people with potential,” he said.
An organisation’s success in identifying potential reflects the competencies of its managers, according to Paul Swinscoe, Director of Business Development for Raytheon Professional Services. “Managers must have job-level competencies to assess an employee’s current performance, as well as his or her potential for other roles,” he said.
Individuals with potential are not necessarily ready to step into leadership roles or to take on more responsibilities straight away, Swinscoe added. What they do need, however, is a capacity to learn and grow, demonstrated either in their day-to-day work or their performance on learning programmes. Another participant observed that as the business environment becomes increasingly uncertain, judgement has become the most important quality her company looks for when identifying its future leaders. Several of those taking part in the discussion had used psychometric tests to measure potential – but with mixed results. “We still have a long way to go in relation to assessing potential rather than performance, and we’ve found that some parts of the business are more attuned to it than others,” said one senior HR professional. Another, who had also been experimenting with psychometric testing, noted: “It’s easy to identify the very high potentials – the people who can move up two levels in five years - but it’s identifying the people who can move one level in five years that we find most difficult.”
The engineering group ABB uses the leadership assessment framework developed by a well-known international search and assessment consultancy to measure both the capability and potential of its top 1,100 managers worldwide. The 150 most senior members of this population are assessed every three years and the rest every five years. “It’s a full three-hour behavioural interview with about 20 separate 360 degree references, so it’s a very rigorous process,” said Peter Bedford, Group SVP and Head of Talent at ABB. A performance appraisal process covering the rest of the group’s workforce ranks employees on what they do and, increasingly on how they do it. But ABB also uses more subjective ways of identifying and measuring potential. Bedford said that people tend to stay in ABB for a long time, with the average length of service being 20 years. But 45 per cent of those who have been with the company that long have been in their current roles for less than two years. “So we have this huge internal churn, which means that there are lots of people who are able and prepared to give a subjective but well informed view of individuals’ potential to progress,” said Bedford.
The temptation for companies attempting to identify potential is to play it safe and assume that if people have not done particular types of jobs in the past, they are incapable of doing so in the future. It’s up to talent professionals to challenge this risk-averse attitude, said one such professional. “I think our role is to push CEOs or other leaders a bit - to encourage them to take more of a risk.”
