Smart companies are thinking strategically about succession planning as they face a wave of Baby Boomer retirements and a tight talent market where job seekers are in the driver’s seat. While employers tend to invest time and money into developing their workforce talent, whether through training, mentoring or 360-degree feedback, many haven’t taken the next step to finding the employees best qualified to become the next generation of leaders.
One reason for this is that current managers tend to be overwhelmed with meeting their own day-to-day challenges. For another, it’s not easy to spot intangible qualities like “leadership potential.” Fortunately, a crop of innovative technologies has emerged to identify the rising stars within your organization quickly and effectively. A growing number of organizations are turning to online assessments, simulations, Web-based games and exercises that measure an employee’s skills and competencies to determine his or her leadership potential. Such software can be particularly helpful for companies dealing with severe leadership shortages and looking to find promising people willing to lead very early in their careers.
“Assessments are broad measures of an individual’s likelihood of growing and succeeding at higher levels,” says Matt Paese, a vice president at talent management consultancy Development Dimensions International (DDI). “They help organizations determine how, and in whom, to invest their limited resources.”
For example, Paese knows of a large multinational corporation that had a pressing need to rapidly fill leadership positions. The HR team worked to develop an enhanced talent review protocol to gather self-reported assessments and management ratings of high-potential employees. After the rankings were gathered for each global division, HR met with managers to discuss individual development plans and tie them to learning activities.
“Having a common global process for identifying leadership potential led to greater efficiency and objectivity in the selection process and a higher rate of identifying hidden potential,” Paese says. “Individuals who had previously not been recognized were unearthed, increasing the supply of leadership within the organization.”
These technologies can help flag future leaders based on broad criteria such as employees’ propensity to assume bigger-picture roles, to navigate complexity and to be motivated by achieving results. They may also uncover aspects of an individual’s readiness to lead by capturing his or her experience, behaviors and personality.
The simplest tools for making leadership appraisals are brief assessments administered to wide swaths of the workforce. The goal is to channel employees toward the most appropriate development experiences and steer those with the greatest potential into higher positions.
However, if handled incorrectly, the process can be perceived by employees as a make-or-break career hurdle—which can seem demotivating. Some vendor solutions, such as those from DDI and the Center for Creative Leadership, counter this risk by having the capability to provide users with constructive personal feedback and developmental insights, while allowing managers to track an individual’s growth.
The cost for such software solutions depends on a variety of factors, including which skills and competencies are evaluated, the number of users, the volume of data, and the type of applications and number of languages required. Large-scale assessments for 250 employees or more are often well below $100 per person per assessment, according to several providers. Customization can come with a bigger price tag but may be needed to tailor results to unique business and cultural challenges, or to target specialized capabilities.
These tools can also provide a platform for hosting online employee surveys, in addition to a formal review, that allows managers to rate individuals against a series of evidence-based statements related to specific leadership qualities.
Employers are also tapping their talent management systems to create and share in-depth profiles of employees and managers that highlight previous job roles, skills and developmental goals. Some tools, such as those from Pilat HR and CompleteSurvey, offer features that automatically remind employees when to update their information and track when a task has been completed.
Maintaining up-to-date employee data ensures that talent managers and other business executives have a clearer picture of an organization’s criteria for selecting leaders and a deeper understanding of what motivates their top performers.
Gruma Corp., a Mexico-based multinational manufacturing company that includes subsidiaries Mission Foods and Guerrero brands, worked with its vendor, DecisionWise, to develop technology to evaluate leadership talent at more than 20 Mission Foods locations. The process began with operating plant managers completing talent assessments to determine areas of individual and organizational strength. Since then, the company has conducted talent assessments throughout Mission’s sales, human resources, operations, quality and executive teams. The results have been used for succession planning, individual development, organizational planning and performance management, says CHRO Miguel Trejo.
Furniture maker Steelcase Inc. began developing an organizational talent review of its workforce last year after upgrading its SAP enterprise resource planning and human capital management system. The Grand Rapids, Mich.-based company now rates employees based on overall performance and leadership potential using SAP SuccessFactors Performance & Goals solution. The data serve as a collective record for identifying talent for career development opportunities and promotions.
Succession Starts Here
Employers are increasingly integrating succession planning tools into their talent management systems in an effort to track and manage employees with strong leadership potential.
“HR practitioners tell us that they are creating internal talent pools and drawing on them as new positions become available,” says Ludwig Gerdes, content lead at G2 Crowd, which conducted a recent technology survey of HR executives. “This functionality is largely due to the quality of integration between performance management and corporate learning management system modules within HR management suites.”
Succession planning features are also gaining more prominence because they enable employees to chart nonlinear paths to positions that will maximize their value.
Integrated solutions such as those from vendors Halogen and APTMetrics typically assess an individual on a combination of core and job-specific competencies such as communication, teamwork and innovation, as well as job-related skill sets identified by department managers or directors.
When evaluating tools for your organization, consider how well the technology can meet the needs of your enterprise and if the data collected are valid and consistent across the organization. Experts also recommend selecting tools that are user-friendly and can evolve to support future workforce growth.
“Organizations, and leaders, must be in constant preparation mode, always readying themselves for the next surprise,” Paese says.
Drew Robb is a freelance writer in the Tampa Bay, Fla., area.