Hiring and Promoting: Gut Instinct, Fantasy Football and Assessment

It was a shocking thing to hear but also very true.

I was talking to the CEO of a midsize professional services company about the challenges he faced hiring and promoting people into leadership roles. It’s hardly a unique problem; most of the firms I work with face similar issues.

After examining the magnitude of his challenge, this CEO had come to a powerful realization. “You know, I have more information available to me when I make my fantasy football picks than I do about which employees to promote.”

I laughed at his comment, but I understood his frustration.

Many organizations hire and promote on little more than gut instinct. Hard data and analytics typically don’t factor into the equation, which is surprising considering most of these organizations rely on data analytics to understand their customers and market conditions. For some reason, however, they don’t use similar tools and insights to gain a better picture of their own talent.

The evidence of this pressing problem is everywhere. A 2014 Gallup study estimated that companies promote the wrong people into management roles about 80 percent of the time. Even though we can calculate down to the penny the cost of promoting the wrong person—figures that can reach more than a million dollars—we still fail to use objective data to make important talent decisions.

The consequences of promoting the wrong person go beyond the leaders themselves to the teams they manage. Studies have shown that working for a bad boss is often a top reason people leave their jobs. 

How do we get it wrong so frequently, and why has this trend persisted? 

In short, we just don’t know enough about the talent we hire or promote. Firms typically complete some level of assessment, like resume screens and basic interviews, when they place talent into roles.  However, they don’t always understand how to identify and measure the exact qualities and skills needed for their talent to drive business results.   

And, perhaps most important, many decision makers rely too heavily on gut instinct.

Senior leaders often categorize their employees into top performers or underachievers based mostly on word-of-mouth or what is visible to the naked eye. Or they assume that success in one role automatically equates to success in other roles in the organization that require different capabilities. 

When it comes right down to it, many leaders have no idea why people thrive in their current roles, and thus, cannot accurately predict if those same people will succeed in different roles.

Gut instinct often overlooks whether top performers have had enough exposure to training and development to make them viable leadership candidates.  It also fails to account for the fact that the skills and behaviors that make these top performers successful in their previous roles are not the same as the skills and behaviors required to be a successful leader.

Top performers also contribute to the problem by accepting leadership promotions because they think it’s the only way to advance their careers. They accept these positions, however, without understanding what skills they need to succeed. Subsequently, their work—and the work of their new teams—often suffers.

You may be wondering if there is a solution—a fantasy football-like app that can help you get a clearer picture of the potential of your own employees or future hires—that could inform hiring and promotion decisions. While it’s not an app, there is a better way to make informed talent decisions, identify appropriate and personalized development, and drive individual and organizational success: talent assessment.

Talent assessment is a simple, evidence-based strategy companies can use to quickly identify candidates—either internal or external—who have the capabilities, mindsets, motivations, and experiences that translate into success in leadership roles.

Talent assessment and analytics provide objective, actionable insight by determining whether your existing leaders and future leadership candidates have the right capabilities and the extent to which they can learn and apply new capabilities. You will discover if there is a need to invest in broader development or if you need to hire external talent to meet leadership needs.

With in-depth, objective information about your people, you can make smart, informed investments to help ensure your company has the right talent in the right roles. 

Here are four questions you can use to start identifying, promoting, developing, and managing talent to drive organizational success.

1. What are your company’s strategic imperatives?  First, identify your organization’s goals, both short- and long-term. These outcomes must be achieved, in some form, by your talent. If you are not clear on what your company needs to accomplish or the implications for your talent, you will have a hard time hiring, promoting, or developing effective leaders.

2. What type of leaders do you need?  Now that you understand your company’s strategic priorities, you should document the talent capabilities required to effectively lead. To do this, work backward to identify what leaders must do to achieve your organization’s goals and then pinpoint what capabilities will be required to do so. For example, if your company will be starting to shift its product set to grow in an evolving market, leaders should be able to drive and support innovation, lead through ambiguity, and hold themselves and others accountable for results, at a minimum.  

3. Do your existing leaders have the capabilities to meet those strategic imperatives? Once you know the kind of leader required to meet business objectives, you will need to evaluate your existing leadership bench to determine if you have the candidates with the right capabilities. Or, if not, whether they can be developed into the right leaders. This will involve using assessment tools and analytics to capture specific information about existing leaders. There are some key questions you will need to answer:

     --Do your existing leaders have the right capabilities to execute against your current and future strategic plans?

     --Do you have enough “ready-now” talent to fill leadership roles that will become open in the next 12-18 months?

     --Beyond leadership, how can you cultivate a talent pool ready to drive the transformation your company needs to stay relevant and fuel growth? 

4. How do you ensure your leadership development programs have impact and that they evolve with the organization? This is the most important, yet most overlooked, component of managing talent effectively. If you have linked your business and talent objectives through quantitative talent assessments and tracked business metrics, you can determine what impact your talent decisions have on business outcomes. You should be able to answer questions like these:

     --Which leaders increased new product revenue the most, and what capabilities do they have that less successful leaders lack?

     --Are leaders driving better results within their teams? 

     --Are you retaining recently promoted leaders or exiting them because they don’t measure up to expectations?

When you apply an evidence-based approach, you will be able to show the value of your talent programs. Link assessment data to business outcomes so you can see tangible dollar returns on investment. Doing so will tell you if there are ways to modify talent processes to improve outcomes. If you cannot find evidence of improvement, it may be necessary to go back and reassess your baseline metrics.

I’ve seen this approach work time and again when companies really commit to it. For example, another large client organization I worked with decided to move their marketing function in-house. It was a huge commitment with significant cost implications. The big question they faced was whether they had the right people in place to support the move.

I worked with the Chief Marketing Officer on a detailed global assessment of their existing leaders. The results showed where they had existing pockets of strength and where they had gaps within and across geographies. With these insights in hand, we devised a plan to fill those gaps through internal talent mobility, development, and where necessary, some external hires.

The client was skeptical in the beginning, but by the time we were done, he was convinced. 

“I didn’t believe in this stuff when we started,” the Chief Marketing Officer said. “Now I really understand how little we knew about our talent. You’ve really opened our eyes to the value of knowing versus assuming what talent we have.”

Those organizations that leverage talent assessment and analytics to find and develop the right people to drive success will win the war for talent and establish themselves as market leaders.