The problem with potential ratings
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When building a talent pipeline within your business, the question many organisations focus on is ‘How many promotions has this person got in them?’. Typically this involves asking managers whether they feel the person has the potential to make one or two upwards moves.
The problem is, most of the managers you ask to make this distinction may not make good judgement calls on this question.
First of all, by definition half of your managers are performing below the median in their current roles. How confident are you that they are accurately assessing in their staff, the potential to be an above average performer at their own level? Many of them will be assessing ‘If promoted, will this person work in the way I do?’ – not always the best definition of potential for a promotion.
Secondly, while most managers will have a good understanding of what their own job entails, few of them will have a good understanding of what the next level up requires. Many of them may never make that leap, as while they are good at their current job, they don’t have the qualities required for a next level position. This means that they are making very dodgy assessments of the potential to move into roles beyond their own.
If you are using the 1 or 2 promotions definition, therefore, it’s arguable that 25-50% of your planning data will be inaccurate due to poor decisions made by the assessors. The percentage is probably higher if managers have not been carefully trained and coached in how to make this assessment (ideally with feedback on the decisions they make).
To circumvent this problem, the immediate manager’s rating is often moderated by the ‘grandfather’ manager, as they better understand the scope of the next two moves. However, this creates new problems – mainly because the senior manager rarely knows the individual well enough to make an informed decision about their potential.
Also, beyond who has the potential to make the next move, you’re also faced with the task of projecting when they’ll be ready to make those moves. And this too can be tricky to get right.
Firstly, the opinions you’ll get from your managers will be as much based on their own character as that of the staff member in question – naturally cautious managers may believe an individual needs 3 years before their next move when they could be ready in 12 months, and conversely a risk-taker could tell you someone would be ready in 12 months when they need three years. And of course, there’s the risk that managers will “extend” the period of time they suggest a key team member needs if they’re worried about the impact losing them could have on their own team.
In addition to this, you’ll often find that the ratings of potential you’re given don’t take into account an individual’s desire for more challenge. For example, many people make what we call ‘honorable choices’ that they don’t want to take on a challenging new role for a time – for a variety of reasons. They might wish to spend time with a young family or need to care for a sick parent. This can significantly impact the timescales you build into your talent pipeline – but how many line managers actually ask their people about their aspirations before they rate how quickly they’ll be ready for promotion?
We estimate that between 10 and 25% of most ‘high potential talent pool’ members are not actively seeking promotion at that time – but they’ve never been asked, and don’t want to turn down the opportunity to be in a talent pool, in case this sends the message that they are ‘not ambitious’.
The result of all this impacts seriously on your long-term succession plans. As one Director said “Some of the data we are working with is seriously flaky”.
So with that in mind, what’s the answer?
First of all, except in the minority of roles, you may have to accept that you can’t plan 5+ years ahead. Is it better to have a 5 year plan with dodgy data, or a 2 year plan with really good data?
In terms of traditional succession planning, the best approach is to ask your managers for a rating on a very simple question. Does this staff member have “the capacity and will to take on a bigger challenge for the business”?
Capacity is usually defined with 3 elements; mental capacity (judgement, learning, analysis); relationship capacity (credibility, influence, networks, political acumen) and drive (energy, goal orientation, engagement).
Will is determined by asking people how much stretch and challenge they currently want in their role, and when they would be ready to take on a bigger role.
All the capacity in the world will not supply your talent pipeline if there is no current will to travel up the pipe.
By asking managers simply to identify people who can do more and who want to do more, you’ll build a significantly better understanding of your current talent pool. You can then draw on support from more experienced partners – grandfather managers, HR, outside specialists – to narrow down your talent pipeline and build a much more accurate understanding of future moves across your employee population.
Take Away
Beware of being spuriously scientific. It’s better to have solid data about individuals’ next moves than five year projections based on unreliable data.