Future winners are investing in the right leaders today. As in past recessions margins are being cut, costs pushed down, currencies are shifting – and future winning organisations are starting to reposition themselves.

1. Relationship counselling: Realising public-private partnership growth opportunities
2
View Point
ViewPoint I Reward in a downturn
Identify your
future stars
F
uture winners are
investing in the right
leaders today
Cost-effectively identifying
your future leaders using the
Growth Factor Inventory
Future winners are investing in the right leaders today.
As in past recessions margins are being cut, costs pushed
down, currencies are shifting – and future winning
organisations are starting to reposition themselves.
These winners invariably see the writing on the wall first, take Leadership development
advantage of market movements and realign their resources to happens by design, not
where they can make most money. This is the message from our by accident
annual Best Companies for Leaders research which shows that
these winners are already thinking about, and investing heavily in,
Per cent Top 20 companies
the future leaders they need to identify and grow. All
80
60
The big difference this time round is processes on their new success criteria.
that they want to know the odds: to They also make sure they keep their 40
place bets on the right employees to next-generation leaders engaged
20
invest in and to do so at significantly and energized despite the difficult
reduced cost. market conditions. That way, when 0
the economy swings back, they will
Talent management
driven by clear
business strategy
Formal processes
to assess talent
Formal program to
accelerate leader
development
To put it simply, once they have worked
be ready for repositioning growth and
out how to re-organize and operate
stealing a march on the competition.
differently, they are investing heavily
in redefining what that looks like for This article offers our best thinking
the people agenda, particularly their on the most cost effective way
leadership competency frameworks. to identify future leaders – those
They see this as the first step in who should get the cream of your Source: 2008 Best Companies for Leaders study
re-aiming their talent management development budget.
©2012 Hay Group. All rights reserved

2. 2 ViewPoint I Identify your future stars
The Growth Factor Inventory (GFI) in brief Where is the GFI most helpful?
The Growth Factor Inventory is based on our established The GFI is designed primarily to be used in entry to middle
research on high potentials which began with the levels of an organization, to identify who best to invest
publication of ‘Potential – for what?’. This research leadership development spend with – those most likely
established four growth factors that best predict the to grow through such investments.
fulfilment of potential: eagerness to learn, breadth of For clients who maintain a ‘high potential’ program with
perspective, understanding others and personal maturity. accelerated development, this is an ideal tool to add to
While similar in some ways to competencies, the growth their selection process and to provide feedback early in the
factors are designed to predict success in benefiting from high potential program.
learning experiences, particularly leadership development The tool is also particularly useful where there is a need
experiences, rather than success in a specific role. They also to sieve a large pool of applicants such as in open access
provide a solid foundation for the competencies that are HiPo programs. As a 360o survey it is only appropriate for
likely to be needed in a wide range of leadership roles. internal candidates. An interview version can be used
to measure external candidates.
Improving your odds Readiness for growth
Even if you’re in the regrettable position of needing to downsize, The four growth factors were identified through a combination of
you still need to retain and develop the best people – the leaders of empirical research using our database of outstanding leaders and
tomorrow who will take your business forward. Ironically our research a global team of executive selection and development experts.
shows that, even during a recession, these are the people who are The research indicated that people who were stronger in the
most likely to leave, just at the time when you need them most. growth factors consistently out performed over the longer term.
These characteristics were seen to account for why they gained the
But how do you identify those key individuals with high potential?
most from accelerated development programs/role placements
The norm has been to rely on line managers to place this bet.
and why they delivered the greatest return on their organizations’
The problem is that while they tend to be reasonably good at
investment in them. This contrasted with those individuals who did
identifying current high performers, they can be notoriously
not go on to achieve executive success, who showed weaknesses in
inconsistent at picking out the longer term winners. This is, of
their ability to grow through learning and experience.
course, why organizations often make mistakes; appointing
talented people to roles for which they turn out to be ill-suited.
External partners can be brought in to establish whether The four growth factors
someone shows high potential through a structured and detailed
assessment process (assessment centers and organizational talent 1 Eagerness to learn
reviews). But interviewing large numbers of senior and mid-level Willing to take a risk in learning something new
managers is cost prohibitive at the best of times.
To address this, Hay Group has developed a cost-effective online
2 readth of perspective
B
diagnostic to help organizations identify high-potentials quickly
Taking a wider view on issues, bringing in
and at minimum disruption to the business.
additional points of view
3
Understanding others
Accurate understanding of other people’s
thoughts and experiences
W
hile managers are reasonably good
at identifying current high performers,
4 Personal maturity
they can be notoriously inconsistent The ability to take feedback and difficulties
at picking out the longer term winners as a chance to learn and grow.
©2012 Hay Group. All rights reserved

3. 3 ViewPoint I Identify your future stars
Why gamble on current performance, when you can invest in long term growth?
The data bears out what we know about high potentials from our wider research.
High potentials tend to take a more in themselves and in their ability to to the next role; it identifies individuals
intuitive, flexible approach. They tend achieve the goals and standards they who have the potential to become
to involve others more; asking for input, set out for themselves and their teams. the leaders of the future. It provides
prioritizing time for others and making In these increasingly straitened times, organizations with a quick and effective
space for coaching. They tend to be it’s important to identify those people guide to where they should place their
warm in their relationships with others; who can make a real difference to an bets when investing in their talent. And
team members, peers or customers. In organization, both now and in the it allows organizations to do this in an
addition, high potentials tend to have future. The GFI doesn’t just identify efficient and cost-effective way.
a strong sense of ‘self efficacy’ – a belief talented individuals who can step up
Climate created Leadership styles
Per cent
100 80
Percentage creating different climates
80
60
60
40
40
20 20
0 0
High GFI scores Low GFI scores Affiliative Coaching Authoritative Democratic Coercive Pacesetting
Motivating climate High GFI scores
Demotivating climate Low GFI scores
When we look at the leadership styles of those scoring high on the
GFI, we can begin to see how they achieve this. The least common Those with high scores on the GFI were
styles for those with high potential were coercive and pacesetting, much more likely to:
whereas these were the most commonly occurring for the lower
potential group. n lead using a longer term perspective and mindset
Over all, those with high scores on the GFI, showed an ability (using all the styles)
to focus on the task-in-hand, in the same way as the rest of
n communicate a shared understanding of the team’s
the group (using the coercive and pacesetting styles when
purpose (using the authoritative style)
appropriate). What differentiated them, however, was the ability
to rise beyond the task and connect with each member of their n s
et stretching but achievable targets
team, responding to individual needs.
(using the coaching style)
n devolve appropriate levels of responsibility to
T
hose with high scores their staff (the democratic style)
on the GFI showed an ability n and create a mutually supportive, congenial team
to focus on the task-in-hand environment (using the affiliative style).
©2012 Hay Group. All rights reserved

4. 4 ViewPoint I Identify your future stars
To summarise, ‘high’ and ‘low’ potential managers were seen to do the following:
‘High potential’ managers ‘Low potential’ managers
Involve others Don’t seek others’ input
Are engaging Focus on tasks not people
Demonstrate warmth Tend to be colder
Provide development-focused feedback Provide task-focused feedback
Are directive and tough when required May be inappropriately directive and tough
Using the Growth 4 Strengthening growth factors
Factor Inventory In organizations with a well known high-potential program,
it is likely that many individuals will wish to strengthen
and demonstrate their growth potential. The GFI helps
them focus their efforts on the right behaviors and take
The ability to identify long term potential is what makes responsibility for their learning.
the GFI such a valuable tool. If short term potential is the
fit between a person’s current capabilities and a likely next 5 Preparing for development
level role, the growth factors go one step further, taking into Using the GFI just before a leadership development
account a person’s longer term capacity for personal growth. program can help participants shift into a growth mindset.
It communicates the expectation that participants will play
1 Identifying potential their part in making best use of learning opportunities, and
Managers often have difficulties in making the distinction clarifies the growth factors that allow them to develop and
between performance and potential. The GFI helps them to demonstrate their potential.
do this more effectively. It can be used as an input to talent
review discussions to help establish how best to invest 6 Identifying organizational issues
leadership development spend. Certain organizations, or parts of organizations, may have
systemic issues that inhibit growth factor development.
2 Filtering candidates For example, an over-focus on immediate performance may
The tool is particularly useful where there is need to sift inhibit breadth of perspective or even eagerness to learn.
a large pool of candidates, such as in an open access Certain recruiting or hiring practices may select groups that,
high potential program. As a 360o instrument it is most overall, are low in understanding others. The GFI spotlights
appropriate for use with internal candidates. For externals these issues, so that they can be addressed and resolved.
the same growth factors can be measured through the
Growth Factor Interview.
3 Transparent communication
There are significant dangers associated with simply
labelling people as high potential. The GFI helps mitigate
those dangers by making the behavioral components of
high potential clear, both to those who end up in the high
potential category and those who do not. Communication
about the behaviors that get a person classified as high-
potential helps ensure that people continue to use and
develop these behaviors, rather than becoming defensive
about the label (and thus decreasing the very qualities that
that you’re looking for).
©2012 Hay Group. All rights reserved

5. 5 ViewPoint I Identify your future stars
Connecting up the dots
The data from our work with the professional services organization
makes interesting reading, particularly when we compare the he tools and assessments
T
characteristics of those high and low on the growth factors, with the
other data collected on leadership styles and climate of engagement
we had used before the GFI
created by the individuals with their teams of direct reports. weren’t able to pick up
The table opposite shows the data we collected (with the names
leadership potential in such
changed). Only the top eight individuals were identified through a quick and accurate way
the process as having high potential. They are separated from the
others in the table with the red line.
When we compared the characteristics of the high potentials
Understanding
Eagerness to
to those with lower scores, there were a number of significant
perspective
Overall GFI
Breadth of
maturity
Personal
average
points of differentiation. 85 per cent of those with high GFI scores
others
learn
Name created engaging, motivating work climates with their teams; for
Felix Leiter 6.1 6.6 6.1 6.6 6.4 those with low GFI scores this was only 15 per cent.
Tilly Masterson 6.7 6.4 5.8 6.0 6.2
An additional point of differentiation was that 60 per cent of the
Godfrey Tibbett 6.6 5.7 6.3 5.9 6.1
high potential group had three of more dominant leadership styles
Rene Mathis 6.1 6.1 5.9 6.3 6.1
compared to only 13 per cent from the lower group. In particular,
Bill Tanner 5.7 5.9 6.4 6.3 6.1
they are more likely to create a shared understanding of the
Harold Strutter 6.3 5.4 5.6 6.4 5.9
purpose of the team; set stretching but achievable targets that
Wai Lin 5.9 5.7 5.9 6.0 5.9 the team understand; devolve appropriate levels of responsibility
Charles Robinson 6.1 5.7 6.5 5.1 5.9 to their staff; and finally to create a mutually supportive, congenial
85
Julius No 5.9 6.6 5.4 5.3 5.8 team environment.
Rosa Klebb 5.4 5.7 4.9 5.8 5.5
Auric Goldfinger 5.4 5.1 5.9 5.3 5.4
Kamal Khan 6.0 5.4 4.8 5.4 5.4
Ernst Stavro Blofeld 5.1 5.6 4.9 5.4 5.3
Karl Stromberg 5.0 5.6 5.6 4.7 5.2
Derek Kananga 5.6 4.9 4.9 5.3 5.2
Max Zorin 4.7 6.1 5.9 3.4 5.0
Aris Kristatos 4.9 4.9 5.1 4.7 4.9
General Orlov 5.0 4.9 4.6 5.0 4.9
Emilio Largo
General Koskov
5.0
5.3
4.1
4.1
4.4
4.8
5.9
5.1
4.9
4.8
per cent of those with
Frank Scaramanga 4.7 4.4 4.9 4.4 4.6 high GFI scores created
Hugo Drax
Franz Sanchez
3.9
3.7
3.6
4.4
4.5
4.5
5.0
2.9
4.3
3.9
engaging, motivating
work climates
Key
At 75 per cent or above of the norm group High
Between 50 per cent and 75 per cent of the norm group Mid-high
Between 25 per cent and 50 per cent of the norm group Mid-low
Below 25 per cent of the norm group Low
©2012 Hay Group. All rights reserved

6. 6 ViewPoint I Identify your future stars
Case Study – Identifying ‘high potentials’ in a Chartered Institute
Hay Group worked with the HR director (let’s call him Tom) of a professional services organization.
Tom came to Hay Group because he Tom was surprised to find that many had no doubt that Janine had the
wanted to get an accurate picture of of the managers who had good capability to be a future leader.
potential in his mid-manager population, performance ratings had low leadership However, although Janine was
and identify future senior leaders. Like potential (14). He was most surprised undoubtedly a high performer, her
many managers, Tom found it difficult by ‘Charles’, one of his team members, scores on the growth factors came out
to distinguish between performance whom he’d previously labelled as being low (below 25 per cent of the norm
and potential. In the past this led him to too ‘emotional’ to be considered as a group) for three of the four factors.
promote highly performing individuals high-potential. Despite this, Charles
to leadership roles, only to find that was strong on all four of the growth Tom admitted that the results had
many of these individuals struggled factors. This suggested he had many come as a bit of a surprise to him.
when faced with the challenge of key attributes which would help him Had he not used the GFI, he said he
managing a larger team. to become a successful leader in the would have developed and promoted
future. It was clear to Tom that his Janine, making the mistake of promoting
24 managers completed the short 3600 preconceptions of Charles had been a high performer as opposed to
GFI survey. Feedback was also collected clouding his judgement of him. someone with longer term potential.
from their direct reports on their styles
‘Janine’, an excellent manager, was
of leadership and their impact on the
another challenging case for Tom. She
et an accurate picture
G
climate of engagement their teams
experienced. We also looked at their had a high Emotional Intelligence score, of potential in your
recent performance ratings as a measure used a variety of long term leadership mid-manager
of how well they were doing in their styles and created an exceptionally
current roles. motivating climate for her team. Tom population
High potentials tend to
take a more intuitive,
flexible approach
For more information: www.atrium.haygroup.com
©2012 Hay Group. All rights reserved