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A Smarter Way to Identify High Potentials: The Challenge Factor


“WANTED:  Future leaders to help our organization reach outrageous goals and face challenges we can’t even begin to imagine while using technology that doesn’t exist yet. Apply today.”

The truth is, we can’t predict what’s ahead for our organizations. That makes it a beyond-daunting task to prepare for the future with the right human capital. Many companies already work hard to identify the most promising employees and invest heavily in their leadership development. But could we improve that process? Could we use a slightly different “filter” to pinpoint those high potentials sooner—and with greater accuracy?

Based on an extensive literature review and research I completed while at The University of Texas at Dallas, I think the answer is yes.

Managers typically look at a number of attributes and competencies to determine whether an employee is a candidate for a high-potential track within an organization. Past performance is certainly an important indicator, but companies can increase their odds of success by looking at this metric from a different angle. I call it adding the Challenge Factor.

What is the Challenge Factor?

The results of my research confirmed that organizations could more quickly identify the strongest potential leaders by integrating more strategic challenges into their development programs. Not just tough projects or tight deadlines. I’m talking about giving them assignments that significantly test their strategic thinking, breadth of knowledge and collaborative scope. Sink or swim. Feet to the fire.

With that said, I realize not every organization has the luxury of taking on that kind of risk. Failure is a likely outcome on occasion. But for those that can, the Challenge Factor provides a way for them to rapidly separate the garden-variety high-potentials from those who demonstrate exceptional levels of resourcefulness, influence and innovation. Wouldn’t that be nice to know as you prepare for a future filled with uncertainty and unimaginable adversity?

Instead of just picking out the smart people who know how to “play the business game,” the Challenge Factor draws out those who can keep playing when the rules change. When new opponents show up. When the game itself morphs into something completely different. If organizations can successfully find, develop and motivate that breed of super-competitors, they essentially win the talent-management lottery.

How can organizations apply the Challenge Factor?

1. Start early. Provide strategic challenges early on in the career path to more quickly identify those who stand out as the rock stars of agile thinking and broad-based learning. If it’s appropriate for your organization, begin testing young talent as soon as possible after onboarding. By evaluating their challenge responses sooner rather than later, you can target your leadership-development investment dollars for a higher return.

2. Track differently. View the results of challenge assignments with a wide-angle lens, taking a more holistic view of each person’s abilities. Most organizations judge performance based on quantitative measures: increase in sales, improvement in client retention, shorter time-to-market, or reduced costs. While it takes more time and adds complexity, expand the measurement process with the Challenge Factor to analyze big-picture results as well.

Did you see evidence of thought leadership and insight? Did the project encourage teamwork across lines of business not previously connected?  Was there an unexpected impact on morale and engagement? What were the specific responses to roadblocks and disappointment? Did products, processes or procedures evolve through the project in a way that creates long-term value for the company even if short-term goals weren’t met? What were the other “side effects” of leadership that wouldn’t normally be calculated? Take a deeper dive in looking at the results.

3. Encourage risk-taking. Create a culture that systematically rewards those who are willing to accept challenges and take calculated risks. Within limits, try to minimize the fear of failure so that employees feel inspired to stretch and innovate. Establishing this type of supportive environment is essential for high potentials, but it can also reap benefits at every level of the organization.

When organizations incorporate the Challenge Factor to help identify premium-level high potentials—those who will know what to do when no one knows what to do—they move into the future with the distinct advantage of smarter, stronger leadership. I look forward to sharing more details about the Challenge Factor and my research in upcoming posts. Until then, I hope you’ll add comments about your experiences finding those agile learners who represent the next generation of great leadership.

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