Are Best Practices Harmful?

“That’s the way we’ve always done it.” This statement, one you have likely heard more than once in your career, should be a warning. Best practices may not be the tried and true processes we’ve relied on but rather outdated ideas that should be re-examined. Continue reading

Can Potential Predict Executive Success?

It's Not the Why book“A great team is the key for success. The main difference between Vale’s practices and those of others was our huge discipline when making senior appointments. We would never hire or promote someone who was not a high performer, highly passionate, and committed to our long-term strategy and demanding objectives.”

Roger Agnelli, former CEO of Companhia Vale do Rio Doce

How can today’s executives achieve the success of Roger Agnelli or Jeff Bezos, Amazon CEO, who also extols the virtues of team achievement? As Agnelli says, it is the team that is the key to success: surrounding yourself with innovative thinkers and top performers. There has been more coverage in business publications about hiring professionals for their potential, not experience, even at the C-suite level. This may seem like a risky prospect, but Claudio Fernández-Aráoz makes a compelling case in his book, It’s Not the How or the What But the Who.

One of Aráoz’s most interesting points is that we make hiring decisions based on a brain that is, from an evolutionary perspective, 10,000 years old. For our prehistoric ancestors, decision making was a life or death skill and so we learned to make “safe” choices based on what was familiar. This notion is still pervasive in our hiring culture as we have based decisions on past experience and competency rather than incorporating other information such as potential to predict the success of a candidate.

What are good predictors of success? How do we quantify “potential”? There are three fairly static qualifiers that can first be examined: intelligence, values, and motivation. Generally, these qualities do not change in adulthood and can help to narrow down a pool of candidates. Intelligence is self-explanatory, but values are important to consider when it comes to the right “fit” for an organization and motivation can indicate an individual’s willingness to innovate, push through difficulty, and maintain momentum.

Gaining insight into an individual’s way of approaching different (and difficult situations) can also prove helpful during the selection process. Questions about how that person solicits feedback from their teams, how they encourage development within their organizations, and finally, how they approach their own personal growth may point to potential for success.

Getting more specific, Aráoz points to portable skills and lists eight competencies that predict the success of CEOs:

Broad analytic and conceptual thinking

  1. Market insight
  2. Results-oriented
  3. Enthusiasm for customers
  4. Collaborative
  5. Organizational capability
  6. Skilled at building teams
  7. Shaping an organization around new goals or ways of thinking

The very notion of hiring for potential seems vague when compared to specific measurements such as experience or competency. But with an aging workforce making talent a scarcity, and the rapid pace with which technology is remaking the way business is conducted, embracing a soft evaluation tool such as potential may be essential as business leaders wade into uncharted waters over the next decade. As Aráoz points out, the “sweet spot” for rising executives falls in the age range of 35-44 years old. But with baby boomers aging out of the workforce and a smaller generation right behind them, this might spell a dearth of leaders in coming years.