Promoting existing employees into leadership roles has the benefit of generating an executive team with deep insight and institutional knowledge of your company. But identifying the best candidates for leadership development is not always easy. A reserved team member may turn out to be a more compassionate and collaborative leader than an apparent candidate who naturally takes charge.
The most effective way to identify good candidates for leadership development in your organization is with data.
The Leadership Dilemma
In today's fast-paced business world, organizations need strong, capable mid-level and senior leaders to drive performance and growth. Leaders are often chosen based on their ability to perform well at a certain task. The assumption is that, if they perform the task to an exceptionally high standard as an individual contributor, they will also be suited to lead a team performing this task.
But leadership requires a much wider set of competencies than this.
You may think, for example, that your top-performing salesperson is the ideal candidate for managing your sales team. By promoting them into this role, you put a massive amount of extra effort and responsibility on their plate. If it turns out that they are not able to provide effective leadership, you may lose performance and engagement in your sales team, and you’ve taken your best player out of the game by bogging them down with managerial duties.
Watch a discussion between Phil and Michelle Brown about how Pinsight uses data to identify leadership abilities.
Overcoming the Leadership Dilemma with Objective Data
A common challenge with identifying leadership acumen is that it is often a subjective call. We think about leadership acumen in terms of soft skills or as a personality type. We have a perceived intuition of someone as a good or poor leader. While “squishy” attributes like empathy, authenticity, self-awareness, and communication are important leadership qualities, they are hard to quantify.
In 2019 we asked 130 organizations how they evaluate leaders in their current position and identify candidates for leadership training. In the study, about 90% said they use opinion-based data. Their decisions are based on evaluations done by managers who themselves have biases around what good leadership and leadership potential look like.
Oftentimes, employees who perform well in their current role may be favored when an opportunity for promotion arises, or a bullish personality may seem like a good pick based on their natural tendency to take charge.
The trouble with a subjective process here is that great workers are not necessarily great leaders and natural authoritarians are not always good collaborators.
A much fairer and more effective way of determining leadership potential is by using crafted simulations in which employees can be rated based on set leadership metrics. By leveraging standardized simulated environments and assessment tools, organizations can indeed measure a program participant’s capacity to take on a leadership role. This insight can then be purposefully developed and used to unlock the hidden potential of employees and boost an organization’s overall performance.
What Makes a Leader?
If you look at popular media about leadership, you’d think must-have qualities of great leadership change on a month-to-month basis. This is not true. There are elements to consider depending on the stage of growth a company is in, or its strategy. But really the skill-set that effective leaders possess is based on sound fundamentals.
- Do they have the skills to help the organization move forward with its goals and objectives?
- Will they have a positive impact on employees and retain talent within their team?
- Will they drive results, inspire innovation, and motivate their team to do great work?
We need to understand the commonalities among high-performing leaders. Great leaders possess essential two pillars of skills.
The first is results leadership: Can they drive results to make the organization competitive in its given market? Can they think through critical solutions? Are they good at decision-making? Do they possess the organizational ability to make strategic changes and execute on this?
Equally important is the people leadership pillar: Do they communicate in a clear way? Can they inspire a team to deliver high-quality results? Can they delegate the right kind of task in the right way? Do they have good coaching skills? Do they care about people and the level of employee engagement on their team?
By identifying these specific behaviors that correlate with success, organizations can better understand what makes a great leader within their framework. Naturally, they would want to work towards developing those traits in their top-performing employees who are most suited to leadership in the most effective sense of the word.
With this knowledge, it is possible to do objective analysis and comparison of leadership behaviors within an organization’s existing employees. Thereby, the organization knows who their best candidates are in terms of leadership development and internal mobility. These insights may also point to a lack of leadership acumen, which tells you that the time has come to source leadership from outside the organization on a permanent or fractional basis.
This being said, the best traits for leadership also depend on the level of leadership. Moving from a frontline manager to a mid-level leader to an executive or C-suite role, you’d think leadership requires more of the same good stuff. This is not necessarily the case. You may find that someone who is a high performer in a frontline leadership role does well because of their exceptional delegation and people skills. The same person may be poorly suited to a mid-level leadership role where execution, communication, and a mentoring influence are desirable.
An executive, by comparison, needs to be much more comfortable with ambiguity and making decisions in the presence of uncertainty
To collect data points, data-driven leadership specialists analyze things like written communication and observe behavior in standardized simulated environments— similar to those used for training airline pilots or surgeons. The employees that demonstrate leadership qualities are the ones most suited to leadership development.
Setting a Process for Leadership Development
Answering the question, “What is a good leader?” is situation-dependent, and so is the development plan of your leadership pipeline. Some considerations are:
- The context of the organization and current leadership teams
- The immediate needs for leadership
- A candidate for leadership development’s current position in the leadership pipeline
- The requirement of a given leadership position
This controlled approach allows for objective analysis and comparison of leadership behaviors in employees. The insight derived is then used to accurately identify high-performers, and potential areas for improvement in their leadership development process.
You may wonder whether, if a person displays a lack of natural leadership abilities, they are doomed in terms of career advancement. This is not the case. There is always the potential for personal growth. People can change dramatically. That’s why decisions on leadership acumen should be made based on data from current performance, as well as potential. Individuals possess untapped strengths and "superpowers" that can be unleashed with the right feedback and professional development.
A person who receives quantified data regarding their leadership skills and room for development is in a position to focus on their professional development and drastically improve. However, in a scenario where they’ve been in an organization for many years or their own manager is not very skilled at coaching, they may never receive this information without formal leadership assessment initiatives.
The Benefits of Identifying Leadership with Data
A company’s culture, and by extension its employee experience, stems from its leaders. When it comes to empowering your leadership team, you want the best possible people lined up for promotion, succession planning, and growth. A measured approach makes it easier to spot individuals at various levels of the organization that are a good fit for leadership.
Implementing data-driven insights into an organization's leadership development efforts can lead to increased employee retention, productivity, and overall performance among its people. Moreover, it can help organizations uncover hidden talent and address biases that may exist in their current evaluation processes.
The validity of data is blind to bias— a factor that may otherwise favor certain people (like the top performer or the authoritarian) for leadership, or negate others based on race, gender, or age.
Running data-driven leadership development programs means you focus on identifying high-potential employees through recognizing codified behavior. You then provide these individuals with targeted development opportunities to develop their leadership competencies and track their progress over time.
By investing in the development of leaders, your organization can ensure a strong leadership pipeline of talent to drive future success.
How to Determine Leadership Acumen with Data
Objective metrics for determining leadership acumen might vary, depending on your industry, but the following are examples of tried and trusted indicators:
Vision and Strategic Thinking
A good leader should have a clear vision for the future and the ability to create and communicate a compelling strategy to achieve that vision.
How do we measure this?
Success in creating, implementing, and executing long-term plans that align with the organization's vision and goals.
Effective communication is essential for a leader to convey their vision, goals, and expectations clearly to their team and stakeholders.
How do we measure this?
Evaluate how effectively the person communicates the strategic vision and plans to the entire organization.
Assess whether they actively seek input from team members, stakeholders, and subject matter experts when formulating strategies.
Leaders should be capable of making informed and timely decisions, considering relevant information and potential outcomes.
How do we measure this?
Do they consider multiple options, potential risks, and future implications before making choices? Do they base decisions on data and analysis?
In a dynamic and ever-changing world, a good leader should be adaptable and able to handle unexpected challenges and uncertainties.
How do we measure this?
A range of problem-solving exercises can offer insight into how far out of the box a person’s thinking goes.
By nature of the vastness and importance of the task, leadership assessment should ideally not be a manual process. Purpose-built leadership assessment tools offer more accuracy and efficiency than any manual process ever could.
Using Technology for Leadership Assessment
For organizations interested in implementing data-driven insights into their leadership development processes, selecting the right assessment tools is crucial. When evaluating potential tools to assess leadership potential, consider the following factors:
Choose tools backed by research and with a proven ability to accurately measure the desired traits and behaviors of leadership. Validated tools provide more reliable results and help ensure that you are making informed decisions based on accurate data.
It is essential to select assessment tools that do not negatively impact people based on their race, gender, age, or other protected classes. Ensuring that your tools are fair and unbiased will help create a more inclusive and equitable leadership development process.
Cost and Time Efficiency
While it is important to invest in high-quality assessment tools, organizations should also consider the cost and time required to implement these tools. Choose options that balance quality with efficiency to make the most of your resources and achieve the best results.
Putting an inadequate person in a leadership position can lead to disengagement, toxic management practices, high employee churn, and a number of other negative repercussions. Developing effective leaders is therefore critical for organizational success.
By leveraging data-driven insights, organizations can objectively analyze leadership behaviors, identify areas for improvement, and unlock the hidden potential for great leadership within their employees.
The power of data-driven insights can have a profound impact on both individuals and organizations. By embracing these insights and investing in the development of your company’s leaders, you can achieve greater success, improve retention and productivity, and build a more inclusive and equitable workplace.
For more on data-driven leadership, check out our interview with Michelle Brown.