Idea in Brief
The Problem
In the past few decades, organizations have emphasized “competencies” in hiring and developing talent. Jobs have been decomposed into skills and filled by candidates who have them. But 21st-century business is too volatile and complex—and the market for top talent too tight—for that model to work anymore.
The Solution
Today those responsible for hiring and promotion decisions must instead focus on potential: the ability to adapt to ever-changing business environments and grow into challenging new roles.
The Tools
Managers must learn to assess current and prospective employees on five key indicators: the right motivation, curiosity, insight, engagement, and determination. Then they have to help the best get better with smart retention and stretch assignments.
A few years ago, I was asked to help find a new CEO for a family-owned electronics retailer that wanted to professionalize its management and expand its operations. I worked closely with the outgoing chief executive and the board to pinpoint the relevant competencies for the job and then seek out and assess candidates. The man we hired had all the right credentials: He’d attended top professional schools and worked for some of the best organizations in the industry, and he was a successful country manager in one of the world’s most admired companies. Even more important, he’d scored above the target level for each of the competencies we’d identified. But none of that mattered. Despite his impressive background and great fit, he could not adjust to the massive technological, competitive, and regulatory changes occurring in the market at the time. Following three years of lackluster performance, he was asked to leave.
