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Recognizing Talent: How Data Helps Companies Identify Future Leaders

Which of your current employees are most likely to become outstanding future leaders?

While many human resources professionals and executives pride themselves on spotting potential leadership talent, fewer can list the criteria they use to make their decisions, Stacey Philpot and Kelly Monahan write in the MIT Sloan Management Review.

Instead, intuition often leads decisions about leadership. Unconscious biases and the halo effect — assuming skill at one task will translate to skill at another — can cause potential leaders to get overlooked while resources are spent on employees without the skill or drive to lead, Philpot and Monahan say.

Only 10 percent of people possess the talent to be good leaders, says Amy Adkins at Gallup. Fortunately, data can help recruiters and HR professionals identify this 10 percent and invest in their development.

The Top Traits of Future Leaders

Companies hire someone with the wrong talent for the role 82 percent of the time, Randall Beck and Jim Harter, Ph.D. write at Gallup. Leadership choices aren’t immune. While people with the potential for good leadership exist in every organization, Beck and Harter say, those people can be overlooked by recruiters and hiring managers who don’t understand what it takes to lead well within their organization’s culture.

Personality analysis isn’t always the best way to spot leadership potential because it won’t tell you why or how a person comes to a particular decision. Data, however, can be used to identify some of the key traits that indicate leadership potential.  

Applied Performance

While organizations frequently begin their leadership searches with their most productive employees, performance alone is at best a starting point, says researcher Andrea Tredrea of Novia University of Applied Sciences in Finland.

Instead, examine how your most skilled staff members apply what they know, Beth Kuhel writes at Forbes. For instance, an employee who takes the time to teach others on staff what they know about the company’s products or processes demonstrates a willingness to teach and build relationships, two qualities of a potential leader. Employees who bring in skills that aren’t in their job description, like their knowledge of foreign languages or web development, also demonstrate initiative, another trait shared by top leaders.

Orientation to Change

Change keeps a relentless pace. That’s why the ability to embrace change is a key trait for leaders, says Vaya Group consultant Tiffany Hiscock.

To spot people who possess the ability to adapt, choose metrics that track employees’ responses to change. For instance, tracking employee performance after their start dates and when they have changed positions within the company can help recruiters and managers determine how that employee has adapted to new responsibilities.

Aspiration

Measuring an employee’s aspiration is not simple. But by tracking employee participation in training and development, managers and recruiters can spot those who are particularly eager to develop their skills, says Darleen DeRosa, managing partner at OnPoint Consulting.

A carefully designed program for gathering data may even be able to determine which skills or levels of rigor the employee practiced during a particular training or development event, providing further insight into the employee’s commitment to learning and growth — an essential trait for leaders.

Multi-Metric Performance

Spotting employees with leadership potential means measuring their abilities across several different metrics, say researchers Saima Ahmad-Khan, Julie Atkinson and Bev Bryant. For instance, an employee may show extraordinary communication abilities but flounder when learning new skills, or may hold themselves rigidly accountable for results but fail to adapt to changing circumstances.

The more variables added to the search for potential leaders, the more complex the search can become. Here, tech tools that perform data analysis can help managers and recruiters understand an employee’s performance over multiple metrics, allowing for a more comprehensive picture of the employee’s potential.

a meeting of future leaders around a conference table

Tools for Spotting High-Potential Employees

You know you need to find and nurture your leaders more effectively, and you’re committed to changing your approach to hiring in order to do so. But where do you start?

“The best way to overcome these challenges and to find your talent is to combine internal and external methodologies,” says Jenny Straumers at HRZone. A method that combines clearly defined measurements and data analysis with practical application can help you find and cultivate the right people to lead your organization into the future.

Success Profiles

What does success look like in each leadership position? By analyzing available data from past and current employees and their performances, organizations can build a profile of the skills, actions and accomplishments that contribute to success, DeRosa writes at the On Point Consulting blog. By including input from those who hold these positions and those they lead, organizations can also understand how the patterns identified by data analysis are applied to create concrete, productive results.

Leadership Planning Models

Your data can help you spot patterns in your current employees’ skills and experience, and it can tell you which gaps you need to fill today. Through the use of predictive modeling, your data can also help you predict future needs — including the need for more leaders.

“Leadership planning models enable HR to create data-driven projections for the quantity of leaders needed, the skills they will require, and where they will be located,” researchers Evan Sinar, Rebecca L. Ray and Adam L. Canwell write in the Harvard Business Review.

The researchers found companies that employ best practices in using data to recruit and hire are more than six times more likely to have outstanding leaders. They’re also likely to have 50 percent more revenue growth than their less data-minded competitors.

Data-Focused Culture

To harness data for success in any business endeavor, including leadership growth, companies will need to incorporate data analysis and comprehension into their daily operations, executive coach Theodore Henderson writes at Forbes.

By teaching human resources staff to consider the data, a company creates an orientation to facts and strategies that can help recruiters and managers spot potential leadership more quickly.

business give advice to a future leader

Nurturing Your Future Leaders’ Potential

Data analytics can identify patterns and trends in your top leaders, illuminating which of your employees shares their potential. Once identified, these team members can also leverage data to cultivate their innate talents.

Righting the Value Balance

Often, an organization’s best potential leaders are the employees who are currently undervalued because they don’t self-promote, says Tomas Chamorro-Premuzic, professor of business psychology at University College London and vice president of research and innovation at Hogan Assessments. These employees may be curious, highly skilled and possessed of strong emotional intelligence, but they stick to their work rather than standing out.

“Your undervalued employees are those people whose values are perfectly aligned with your company’s culture, which means they have higher tolerance levels for staying in the job even when they are disengaged or they feel undervalued,” says Chamorro-Premuzic.

Data can help you spot these individuals. It can also help you see where they may be disengaged or undervalued, allowing you to reach out to them, tap into their passions and cultivate their leadership abilities.

Turning High Potential Into High Results

High potential (HiPo) programs seek to identify workers with the potential to succeed above and beyond their peers. These programs are increasingly popular, but they’re not always successful. Only 24 percent of senior executives believe their organization’s high potential programs deliver strong results, say Claudio Fernandez-Araoz and fellow researchers in the Harvard Business Review.

Using data to drive HiPo programs can turn these programs into spaces for cultivating identified potential leadership talent. By relying on data, current leadership can see how potential leaders respond to training and information tailored to their personal strengths and weaknesses. The program becomes not only a way to cultivate leadership talent, but to examine and correct its own mistakes in identifying potential leaders.

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