The coronavirus crisis has made clear that leadership matters, now more than ever. Leaders and their organizations are facing challenges that are exponentially more complicated than anything they have faced before, and many of those leaders are showing cracks.
Beyond the current crisis, leaders will continue to do business in a world that is characterized by more change and uncertainty, not less. Will our leaders be prepared to handle the challenges of tomorrow? Probably not.
That’s because although identifying the right leaders is incredibly important, we tend to hire bad leaders with alarming consistency. To wit, while 86% of leaders believe leadership succession planning is of utmost importance, only 14% think their organization does it well. And 60% of executives fail within the first 18 months of being promoted or hired.
Why are so many organizations so bad at choosing good leaders? Because most go about it in the wrong way. Here are the three worst ways organizations choose leaders.
1. Choosing People Who Seem Like Leaders
At the bottom of most organizations, there is a well-documented process around hiring. Yet, leadership selection at most organizations is ad-hoc. As a result, most organizations hire and promote people who “seem like leaders.”
The problem is, the qualities that make someone seem like a leader to most of us are misguided at best. Current talent pools are not only overwhelmingly dominated by white men, but those individuals also tend to be ambitious, narcissistic, and self-promoting. Organizations routinely select leaders “on confidence rather than competence, charisma rather than humility, and narcissism rather than integrity,” Dr. Tomas Chamorro-Premuzic, Chief Talent Scientist at ManpowerGroup and a member of AIIR’s Advisory Board, wrote.
2. Supervisor Recommendations
At 73% of companies, the most common method for identifying individuals as potential candidates for leadership positions was a single nomination by their direct manager. Unfortunately, supervisor ratings less often reflect leadership potential than they reflect the supervisor’s personal feelings toward that individual.
We often mistake political savvy for leadership potential. A study of 457 managers found that those who got promoted spent the majority of their time managing politics. Those managers who were most effective spent most of their time working with their teams and tended to go unnoticed when it came to higher leadership positions.
The main job of a leader is to build a team capable of outperforming the competition. But rather than individuals who are talented at building engagement, employee morale, and team performance, most leadership pipelines are filled with individuals who are talented at shaking the right hands.
3. Promoting Top Performers
Even if supervisor ratings weren’t influenced by politics, it wouldn’t make them any better a metric for selecting leaders. That’s because performance is not the same as leadership potential.
In the age of data, many companies are moving away from subjective supervisor ratings and diving into performance data to identify candidates for leadership positions. The problem with relying on performance to identify leaders is twofold. First, many talented salespeople, programmers, and engineers have little interest in managing others. Second, as Chamorro-Premuzic wrote in Forbes, “when you transition employees from individual contributors to managers, or from managers to organizational leaders, the competencies that drive performance change.”
In other words, the qualities it takes to be a great salesperson don’t necessarily translate when it comes to managing a team of salespeople. In fact, in a study of sales teams at 214 organizations, researchers found that when top salespeople were promoted to management positions, their teams’ sales declined an average of 7.5%.
The truth is, only around 30% of high performers have leadership potential. Most will struggle at the next level. When you promote based on performance, not only do you lose a valuable individual contributor, at best, you gain a mediocre manager.
Choosing the right leaders for tomorrow
The coronavirus crisis has given us a glimpse into a future characterized by complexity and exponential change. And because many organizations are using the wrong criteria to assess and select their leaders, many leaders aren’t prepared for the challenges ahead.
By eschewing intuition in favor of data, paying attention to the competencies that actually correlate with success, and re-centering their definition of leadership around employee engagement and team performance, organizations can reshape their leadership selection process and be better prepared for the challenges of tomorrow.