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Great Organizations | Great Leaders

Is Your Hidden Potential Really Hidden?

The secret to your organization’s success is probably in plain sight—if you know what you’re looking for.
Is Your Hidden Potential Really Hidden?

It’s an all-too-common refrain among organizations across industries and locations: “We don’t have enough leaders.” But the need for leaders is about more than numbers. It’s also about the commonly held belief that what’s really in short supply is the “right kind” of leaders—the ones required to meet the whiplash-inducing change and disruption that define both today’s business landscape an uncertain future.

There is certainty in the truth, however. And the truth is this: Most organizations have much more leadership potential than they are tapping into; hidden potential that isn’t really hidden at all. It’s in plain sight, obscured only by the organization’s inability to see it and, by extension, to identify, activate, and accelerate it for the organization’s benefit.

To understand the reality of this overlooked truth, consider these common scenarios, which might mirror what might be happening in your organization:

  • A manufacturing organization promotes into general manager positions only leaders who have been in the role of plant manager—a job traditionally held only by men.
  • A financial services organization invests heavily in its high-potential pool but doesn’t have a leadership development program for other capable leaders who aren’t included in the pool.
  • A B2B organization considers for leadership roles only those individuals who “raise their hands” for promotions, while not actively considering those who would be equally or even more capable, but who aren’t given to self-promotion or calling attention to their own abilities or accomplishments.

Situations like these point to a troubling tendency: organizations either refusing to see—or outright neglecting—rich stores of talent that include individuals who may not have been identified as high potentials and those who may not fit traditional leadership profiles.

And when organizations overlook leadership potential, they may also be creating potentially costly risks.

The Risk of Overlooking Potential

To understand why overlooking potential is so risky, you need look no further than the fierce competition for talent impacting seemingly every organization. While, traditionally, many industries have been defined by low employee retention rates and high turnover, the challenges associated with finding and keeping good people—especially capable leaders—are now commonplace.

One important key to attracting and keeping those with leadership potential is to identify and develop their potential. It appears, however, that organizations are failing miserably in this area. In a DDI survey of more than 250 leaders, we found that more than half believe their potential was not properly identified or developed, even though they may have already been promoted into a leadership role. This feeling of neglect isn’t limited to those who haven’t been identified as high-potential leaders. Almost one-third of identified high-potential leaders still say they feel overlooked and underdeveloped.

On their own, these number are certainly alarming. But more troubling still is what they mean for organizations. After all, what do talented people do when they feel overlooked and underdeveloped? They leave, taking their talent and potential elsewhere. In our same study, a whopping 68 percent of leaders who felt their potential was overlooked said they had either left or considered leaving their organization. And when these leaders leave, among the places they may be drawn are the greener pastures of your competitors!

Indeed, it’s not an understatement to conclude that your organization’s overlooked and underdeveloped “hidden” potential is your competitors’ greatest advantage.

Seeing Your Hidden Potential

In order to unleash the hidden potential in your organization, you must understand where to find it. That means seeing potential where you may have not looked for it before. The scenarios mentioned above illustrate the narrow focus that can lead organizations to miss out on rich sources of leadership potential. They also point to a major symptom of not tapping into hidden potential: a lack of diversity in the organization’s leadership ranks.

Diversity can connote a wide variety of differences in people, but it can be expressed in terms of two major categories: cognitive diversity, which includes differences in thought, personality, and job function/ experience, and identify diversity, which refers to gender, age/generation, and racial/cultural diversity. Organizations need to pay attention to both kinds of diversity, yet there is a lot of evidence that too few are doing so:

  • A 2018 Deloitte study revealed that 43 percent of millennials plan to leave their jobs within the next two years, in part because of their organization’s lack of commitment to diversity.
  • A McKinsey study found that people of color remain grossly underrepresented in senior leadership ranks: men of color hold only 12 percent of C-level roles; women of color hold just 3 percent.
  • According to a 2015 study published in the Academy of Management Journal, firms tend to hire new CEOs with functional backgrounds similar to the outgoing CEO.
  • The 2018 Global Leadership Forecast from DDI, The Conference Board, and EY, showed that while women make up 47 percent of the U.S. workforce, they hold just 22 percent of senior-level, executive roles.

Especially troubling about these numbers is the degree to which they run counter to the benefits organizations reap when they embrace diversity. The Global Leadership Forecast found that organizations with more women leaders post significantly greater profitable growth. Another study, published in Economic Diversity, showed a link between innovation and cultural diversity.

A lack of cognitive diversity also points to an opportunity on which organizations are failing to capitalize. Leadership talent can be found in all corners of an organization, yet DDI research shows that some functional areas, especially finance and operational backgrounds, tend to be overrepresented when it comes to promotions. This is the case even though leaders from other functional areas—e.g., sales, marketing/advertising—display the strongest leadership skills.

If organizations want to begin reaping the benefits of diversity—and hang onto their valuable, if not always valued, leadership talent—they cannot keep looking in the same places for leadership and tapping the same kinds of people.

They need to take a different approach.

Practices to Promote Diversity—and Unleash Hidden Potential

If you want to promote diversity and, in turn, unleash the hidden potential in your organization, there are some specific practices you should adopt. They include the following:

Consciously rooting out and reducing unconscious bias.

Unconscious bias are stereotypes or prejudices that can influence one’s thinking and decision-making without the individual being consciously aware of them. Predictably, unconscious bias can have a negative impact on hiring and promotion decisions, which is why recognizing it is critical.

While unconscious bias can impede diversity efforts, it’s especially problematic because it can be nuanced and grounded in personal experience. For example, if an interviewer had in the past hired an individual who previously worked for a public relations agency, but the individual proved a poor fit with the team, the interviewer may then be unconsciously prejudiced against hiring another candidate with agency experience.

Organizations can minimize unconscious bias by having clear, documented definitions of what’s required for success in a job. This entails building a Success ProfileSM that captures the key competencies and personal attributes needed for the target role, as well as the desired skills and experience—and using it as the definitive standard against which all candidates are evaluated.

Structured behavioral interviews that seek specific examples of past behavior—and provide interviewers with a common, specific list of job-relevant questions to ask—help interviewers maintain focus on the criteria that should matter most when it comes to selecting the right person—and keep their unconscious bias in check.

Making promotion and development more objective.

One reason decisions about whom to promote or whom to include in development programs lead to opportunities for some individuals or groups while others are excluded is that these decisions tend to be highly subjective in nature. To some degree this is to be expected, as people are making decisions about people, but the all-to-common result is that potential is overlooked.

Assessments can level the playing the field and introduce much-needed objectivity into these decisions. A job level-specific behavior-based assessment, such as an assessment that evaluates readiness for a first-level leader role, or similarly appropriate assessments for leaders at higher organizational levels, makes it much less likely those with potential will slip through the cracks. Ideally, these assessments will include some form of simulation to provide opportunities to see how the individual would perform when faced with the tasks and pressures associated with the target role or level.

In addition, managers need the skills, tools, and insights to become better talent scouts who can spot potential in their direct reports and advocate for their careers by helping identify or create opportunities for growth and advancement.

Proactively focusing on underrepresented groups and individuals.

Attaining greater diversity demands that organizations make real efforts to meet the needs of groups not properly represented in the organization’s leadership population. For instance, women may be less willing than men to declare themselves ready for an assignment or promotion. Individuals from other cultures, meanwhile, may be introverted and not given to calling attention to their own abilities and accomplishments.

These groups can benefit from developing skills and insights to help them enhance their profile and better position themselves for opportunities. It also may make sense to create high-potential initiatives specifically for women or those from certain ethnic or culture backgrounds.

Coaching and mentoring represents a tremendous opportunity for individual leadership growth, as well. In one DDI study, while two-thirds of women view mentorship as highly important, more than 60 percent say they have never had a formal mentor.

Taking a Closer Look

While the practices detailed above point a way forward for organizations to begin unleashing more, if not all, of their leadership potential—including their hidden potential—the most important first step is seeing that potential. Or, more accurately, seeing that potential for what it is: a valuable competitive advantage that may not be hidden at all, but which is most assuredly underutilized.

Mark Busine is Vice President, Product Development, at DDI.
Tacy M. Byham, Ph.D., is DDI’s CEO.
Stephanie Neal, M.A., is Senior Consultant, Product Development, at DDI.

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