How do you identify people with the potential to be your future business leaders?

One of the biggest challenges for HR and L&D professionals relates to predicting the future. “Who has what it takes?” sounds straightforward and yet in reality it’s a more complex question to answer. Here are two main hurdles you’re likely to encounter along with the actions that, in our experience, help you to develop a credible response. 

Hurdle 1: What do we mean by potential?

There’s a wealth of research into potential and everyone has a slightly different interpretation and expectation of what it actually means [1]. For some, they’re thinking about helping everyone to bring more of their strengths and skills to the workplace. Others confuse performance with potential: they see those who deliver results and exceed targets now as the ones who will excel at future, unknown tasks. Moreover, as previously discussed, often an individual’s potential is viewed as a stagnant, rarely changing label, rather than an evolving and dynamic process. 

At Kiddy & Partners, we take an agile and future-oriented view of potential. It isn’t about what an individual has done in the past, but how they can develop and succeed tomorrow. Unlocking potential happens when an individual with the right qualities for success is provided with the right opportunities and support to leverage them. So, when identifying who has potential to be your future business leaders, you need to look at the specific characteristics that are required and how this is impacted by your unique organisational context. This means that ‘potential’ looks different in different companies, across different people and at different moments in time. 

Consequently, one of the first actions we recommend in pursuit of answering ‘who has what it takes?’ is to articulate specifically what you’re looking for. Aspects to consider in your definition of potential is discrimination and inclusion: are you inadvertently excluding a group of people by adopting a narrow or discriminatory perspective? 

Hurdle 2: How do you assess potential?

Once you’ve defined – and agreed – what you’re looking for, one of the next key hurdles you’re likely to face is how to actually measure it. There are some quick wins here. For example, using objective techniques (interviews over graphology!) and ensuring your assessors are properly trained, which helps to avoid bias and ensure consistency.  

The more challenging aspects of assessing potential are when you start to consider what the best methods are for evaluating the constructs of your definition. As an example: in our experience, one of the ingredients of potential that we see across organisations, roles and sectors is learning ability. By this we mean whether someone can pick up a new skill, how they respond to feedback and whether they can apply their skills in different ways. One approach to measure this is by using a personality profile (e.g. a scale such as ‘openness to experience’). Another possibility is to explore previous examples of learning within an in-depth interview. However, the challenge with both of these methods is they are self-report measures, so only give us the chance to hear an individual’s own perceptions [2]. As such, the output information we can gather is moderated by variables such as humility/modesty, arrogance, self-awareness and cultural differences. 

Instead, a stretching business simulation provides external observations within a safe and controlled environment. A business simulation is a carefully designed, realistically constructed ‘day in the life’ assessment that mirrors the challenges and opportunities of your future leaders. It involves a series of tasks for the leader to complete, all set within the same scenario. Like the simulators used as part of the training of new pilots, business simulations allow you to change the parameters according to the specific demands of your context. In the case of assessing the core ingredient of potential, ‘learning ability’, they create the opportunity to put an individual in a novel environment to see how they can apply their skills to a stretching challenge. Assessors can also provide feedback throughout the day, to test how the leader can take it on board and apply these learnings in subsequent tasks. One of the key benefits of using a business simulation is that it is forward looking rather than focused on past or current skills. This makes it an ideal assessment method for considering who has the potential to be your leaders of tomorrow.  

Of course, the hidden follow-up question to “Who has what it takes?” is “And how can you help them to get there?”. This next hurdle to overcome should be anticipated and shouldn’t be left to address until after you’ve got a shortlist of future leaders. Look out for upcoming articles in our series on unblocking talent pipelines to learn how to nudge leadership learning  and what coaching looks like that really accelerates development.