Increasing market and organization complexity can make it challenging to know what good leadership looks like. As a result, many organizations’ leadership pipelines are lacking, which can affect their chances for success. Organizations that understand the emerging drivers behind leadership potential and know how to effectively identify them can position themselves competitively in the market.
The Corporate Leadership Council’s global research study “Driving Breakthrough Performance in the New Work Environment” revealed three emerging trends driving the evolution of the work environment and associated requirements for leadership success. The first is an increase in frequent, significant organizational changes.
Leaders experience everything from market shifts and changing strategic objectives to ever-evolving work teams and reporting relationships. High-change environments erode the link between established processes and achieving goals, which can reduce performance. Constant change also creates uncertainty as leaders’ experiences become less relevant.
A second emerging trend is the increase in knowledge-based work. Today’s workplace is defined by process automation and outsourcing routine tasks, resulting in work that is more information intensive and novel. In turn, more employees are becoming knowledge workers focused on collecting, analyzing and making decisions using information. Leaders who struggle to effectively use information reduce their teams’ performance and increase organizational risk.
Finally, organizations are becoming more matrixed, which requires leaders to share responsibilities and accountability. Informal working relationships always have been important, but being effective today requires collaboration across broader, more diverse sets of people. This increased interdependency can be frustrating and derail leaders who cannot lead in the absence of formal authority.
These emerging trends are driving a need to redefine leadership success profiles. In the past, leaders had more formal authority to make critical decisions, which afforded them some control over their individual and teams’ successes. That more consistent environment also made identifying leadership potential easier.
The emerging drivers behind leadership potential are not new concepts or behaviors, but their relative importance and how they must be deployed differ from characteristics portrayed in traditional leadership models. Traditional models link leader potential to individual characteristics, such as strong business acumen or high need for achievement. Reliance on outdated leadership indicators can misidentify individuals thought to have leadership potential or fail to identify those who can succeed.
As the workplace continues to evolve, leader potential will be defined through three sets of characteristics, including:
• Possessing the right abilities and experiences.
• Being motivated by factors that define leadership.
• Demonstrating commitment to the organization and people.
According to the aforementioned Corporate Leadership Council research, core abilities that drive leader success include adapting and leading change, working collaboratively and effectively applying judgment. As frequent change and matrixed structures become the new normal, successful leaders will be able to quickly adapt to market and organizational shifts and work more collaboratively to understand interdependencies their teams must navigate to succeed. It also means leaders must influence without direct authority, share resources, and hold themselves and others accountable for achieving objectives.
Leadership success requires that individuals improve team effectiveness by reaching across organizational boundaries and be committed to the organization and its people. In relation to leader potential, commitment is defined as demonstrated effort to learn and model behavior that supports the organization’s vision, values and objectives. Leaders who are committed act with integrity and create cultures that reward behavior aligned to organizational objectives. They value talent and share it rather than keep it for themselves.
Tonya Baker, senior manager of organizational development at Advance Auto Parts, said she saw firsthand how evolving markets are driving organization change and complexity. “We recognized that failing to focus on these aspects of leadership could derail the success of our leaders and their teams.”
For instance, changes brought on by recent economic upheaval forced leaders to adapt to frequent restructuring while retaining accountability for business plans. Understanding the impact of these changes, Advance Auto Parts linked its competency model to critical business challenges to identify the capability to adapt and address them.
Gabriele Eaton, senior manager, leadership and organizational development at medical supply company Hollister, said she also recognized the need to define leadership potential through the lens of strategic objectives.
“Achieving our long-term goals requires new and different competencies,” she said. “Aligning competencies with these goals enables us to identify the right talent and creates a direct link between our corporate strategy and people’s performance.”
What Makes a Leader Great?
Understanding leadership potential is half of the battle, but consistently identifying individuals with the right mix of skills, motivation and commitment is also challenging. Traditional methods to measure leadership potential range from reviewing performance to conducting interviews focused on accomplishments. These methods possess a fundamental disconnect because they focus only on performance, not on potential. Organizations should combine traditional approaches with objective assessments that measure multiple factors of potential to consistently identify leaders.
“Due to the complex and ever-changing nature of the pharmaceutical industry, we need leaders who are self-aware and able to adapt to change,” said Tanya Clemons, chief talent officer for pharmaceutical company Pfizer. “We also want to identify future leaders who will be comfortable operating in an increasingly complex environment. At Pfizer, we take a multi-faceted approach to identifying leadership potential. By assessing an individual’s learning agility, calibrating their performance history and understanding career aspirations, we are able to differentiate our talent and our investments.”
Assessments for leadership potential range from psychometric tests to simulations of leadership challenges, and many are available online. Online assessments measure candidates’ leadership abilities, experiences, interests and the extent to which these characteristics match different leadership career paths. Simulations also offer realistic previews of business challenges candidates might expect to face. Thus, assessments provide organizations a view of candidates’ skills, motivation and commitment, while providing candidates a preview of job requirements and expectations.
As technology advances, so do the capabilities and innovation built into online assessments. For example, candidates can complete one or more computer adaptive tests that measure leadership style and ability along with simulations that require negotiating with peers for resources or delivering a business case to create programs that address critical issues. These assessments can be administered on-site to candidates, and technology allows for secure, virtual delivery via the Internet. Regardless of delivery method, online assessments provide powerful measurement and fast access to results.
Advance Auto Parts’ executive assessment program takes a holistic view of leadership potential to hire and promote leaders. It measures core leadership competencies, experiences and motivation primarily using online assessments. Some are completed remotely, while others are completed on site as part of a deeper experience that includes interviews. Assessment results are integrated into a report detailing candidates’ readiness for the target role and potential for future movement. All internal and external candidates hired receive a development report that highlights areas where new leaders can focus effort to maximize their potential. The report also recommends resources they can tap to gain needed knowledge and experiences.
“Providing results in our competency framework really facilitates understanding and use of assessment results,” Baker said. “The development reports also are essential for helping new leaders succeed and providing internal candidates who are not promoted important feedback to keep them engaged and help them prepare for the next opportunity with us.”
The Impact of Assessments
High-quality assessments can help create business and financial impact. But finding the right assessments does not start with technology, it begins by confirming organizational strategy and linking it to leadership requirements. These requirements serve as the assessment blueprint. Quality assessments should have validity evidence, but as part of an implementation strategy, organizations should consider locally documenting validity and business impact as well as developing administration, decision-making and follow-up steps that are standardized, easily executed and fair.
Organizations using quality online assessments to identify leadership potential can realize tangible benefits. Effective leaders drive improved operational efficiency, revenue, profit and employee engagement. Using assessments as part of a broader strategy can fill leadership pipelines, prioritize individuals ready to lead now versus those ready to lead in the future, and provide a basis to create targeted development planning.
“We had to make an investment in our process from a time and cost perspective, but its return has more than paid us back when we look at quality of hire, improved retention and overall strength of our leadership bench,” Baker said. “The process also reinforces to candidates these roles’ importance to our organization, and it helps them by providing targeted development feedback during their onboarding.”
Organizations that understand emerging drivers of leader potential can use holistic, technology-based assessments to measure leadership skills, experience and motivation. This approach enables them to consistently identify leaders who can drive tangible business and financial outcomes to help their firms succeed in a rapidly changing business environment.
Matthew Such is director of professional services at SHL, a global talent measurement company. He can be reached at email@example.com.