What talents matter for executive-level candidates? It turns out that no single set of characteristics defines executive leadership capability; rather, it is a blend of factors. We all know highly effective leaders, and the one thing they have in common is how different they are from each other. A credible talent assessment needs to reflect that reality. So although we have identified 19 different characteristics that predict high executive performance, no leader will possess all 19. No leader in our database is good at everything, although a few think they are. We need leaders to possess sufficient talent for our performance prediction to hold true.
Here’s how it works.
Imagine we assessed a candidate for a CEO or executive-level role and they scored at or above the top quartile in our database. Meta-analytical studies (of initial research, and concurrent and summative criterion validity testing) predict they will have about an 8 out of 10 chance of being a top-quartile performer. And the measures we use for predicting performance relate to financial, process, efficiency, compliance, revenue, customer and employee engagement metrics; in other words, a balance of extremely important, objectively measurable performance criteria. If these candidates score at the mean of our database, the performance prediction drops significantly to about 4 out of 10 who could become top-quartile performers.
Of course, if you lower your performance demands and want candidates who have the potential to be a little bit better than average, then many more candidates will be qualified. But I have never seen an organization become world-class by bringing slightly-above-average candidates to lead key executive functions. And here’s the problem. It is relatively easy for well motivated and sophisticated candidates to build up an impressive résumé—they check all the key boxes and are often strongly advocated by the search firms who find them. But without an objective, predictive assessment, too many fail.
Two final thoughts to consider:
First, every time we have assessed the executive talent levels of high-potential candidates in companies (and every company has such a list), we find they always conform to a normal curve of distribution. This attests to the inherent bias that afflicts our assessment of future leaders. It also highlights the ineffectiveness of so-called “calibration” efforts, where executives meet together in an attempt to retrospectively find evidence to support the decisions they have already made. As serious as these executives are in trying to get it right, these discussions are a process in advocacy and support rather than clinical evaluation. Second, we find very little difference in executive talent levels between candidates who are sourced by internal talent acquisition functions and those sourced by expensive and prestigious executive search firms.
In one company we built an entire executive leadership team without using an executive search firm at all and this company is achieving class-leading revenue and GM performance. This saved in the region of US$2 million in search fees.
We need to shift focus and place weight on the assessment of talent characteristics that have been shown to have predictive power.
This information should be the most important consideration, and all of the information on a résumé—skills, experience, motivation, knowledge, track record—is additive. This additional information increases our confidence that a candidate will be highly successful, but it doesn’t predict it.
