It's Not About Potential: Promoting Better Leaders With Data

According to research, 42% of identified “high-potential” employees (who should be in the top 25%) are below average (that’s in the lower half of ALL employees.) Nearly 15% of them are in the bottom 25% of their peers. Suffice to say, companies are bad at spotting whom to promote; primarily because they rely on biased opinion, not data. Here is a short parable on how and why things go wrong with traditional “best practices” like 9-boxing…and how you can make things go right with better data.

At the Starting Line

I worked on a great team for a number of years. When our manager left for greener pastures, the entire team speculated on who would get the job. We all knew who we WANTED to lead the team, and we knew who we DIDN’T want as a manager. From our perspective, those were the only two horses in the race.

The person we WANTED, let’s call her Brandy (because that was her name) was a quiet leader in the group. Brandy was smart, capable, trustworthy, respected by the team, and always willing to help, guide, or coach. Her flaw: she wasn’t always the most outspoken in meetings (something our Director appreciated), and when she did, it was usually to challenge the thinking of leadership. She rarely made a big deal about the things she helped guide the team towards. Brandy cared about the group.

The one we DIDN’T, we’ll call him Doug (because that was his name) was the loud voice in the room and tended to echo the thoughts of leadership (no matter how disconnected they were.) Doug was always drawing attention to himself when anything good happened and often claimed personal credit for things the team had done. He was relatively capable but always seemed to work harder on making sure his name was attached to things than actually doing them. When it came to providing help, Doug was always too busy…except when the Director was around. We knew he didn’t really care about the other members of the team and we knew he often threw us under the bus when things went poorly. Doug cared about himself.

A Slow Motion Crash

You probably know how this story ends. The person we DIDN’T want to get promoted, Doug, was…and it was as much of a train wreck for the team as you might imagine. He immediately claimed domain and vowed to “fix the team” (we weren’t broken.) Brandy, the quiet leader we all wanted, was pushed out within 4 months based on his argument that she was “creating a rift in the team” (he was, not Brandy.) Shortly thereafter, two others on the team left plus myself. I think two more of my colleagues left before the year was out. All told, that team lost 6 of 9 people (70% turnover!) within a year of Doug being promoted. The reasons we all gave for leaving were about the new opportunity: higher pay, more flexibility, yada, yada, yada. Those might be the reasons we took the new job, but the reason we all left, was Doug. I believe we all would have stayed (except for maybe Doug) had Brandy been promoted.

Sadly this is not a novel scenario to anyone. It happens all the time. I don’t even blame the Director. Well, maybe I do a little but I’d still say it wasn’t completely his fault, he was working with a bad process to determine whom he should promote.

All the Right Moves

The company did what all the books and “best practices” tell you to do. They used a “9-box” method to evaluate the team.

For the uninitiated, a 9-box method involves using a grid scoring system with “performance” on one axis, and “potential” on the other with a scale of “low/mid/high” on each axis. The result is a 9-box grid with the bottom left box indicating “low performer/low potential” and the top right box indicating “high performer/high potential."

They even used a leadership competency self-assessment for both. From what I understand they both did well, with Brandy slightly outscoring Doug on the assessment. They were both evaluated as high-performers, with Doug having a slight edge over Brandy. They had both been with the company for a couple years, with Brandy having a slight edge. And they had both lead projects on the team within the past year, again with Brandy having a slight edge on completion timeline and quality of outcome. So even if we are keeping score on that matrix, it still seemed like Brandy was ahead 3 to 1. But that was from our perspective.

In the end, the Director still chose Doug. Why? How could using seemingly objective criteria end up with the wrong person being promoted.

All the Wrong Assumptions

Simon Sinek advises us to “Start with Why” in order to create “a workplace in which vast majority of us wake up inspired, feel safe at work and return home fulfilled at the end of the day.” That’s good advice. So let’s look at why companies keep getting promotions wrong.

For better or worse, I got my undergraduate degree in Philosophy. And while I can of course have deep thoughts about being unemployed (to paraphrase fellow Philosophy degree holder, Bruce Lee) I can also dig deeply into root cause. A big part of effective root cause analysis is asking what assumptions we make. And in this case, that is where the trouble lies.

We assume people who are good at the job are good are good at helping others be better.

We assume leaders have all the information they need to make good decisions.

We assume leaders are aware of and can effectively regulate their personal biases.

We assume employees want to be promoted.

We assume performance reviews are supporting data.

We assume leadership assessments predict success.

Those are all false.

Assumption 1 - Good Performance = good leadership

Good performance = good performance. That’s it. Especially when you are talking about a competitive environment for compensation. Typically, pay for performance structures or commission based structures encourage individualism, not team collaboration, and certainly not self-sacrifice. Two essential elements of good leadership. Good leaders need to leverage the strengths of the team and make decisions that benefit the group even when it is not personally beneficial. In fact, an ongoing Harvard study shows that promoting the best performer on the team, actually makes team performance worse.

Assumption 2 - Managers are well informed

Managers do their best but the modern workplace has them working on their own objectives more than managing a team. 30 years ago, 80% of a manager’s job was managing the team, now they average only 25% according to a McKinsey study. Which means we are asking them to make high impact decisions with very little empirical information. It’s not their fault. The modern workplace is more dynamic, dispersed, and distributed than ever. It’s no wonder they struggle.

Assumption 3 - Leaders manage biases well

They don’t. This is just a function of psychology. Managers think they are good at managing biases, but like anyone else, they are subject to the Dunning-Kruger effect where we think we are better at something than we actually are. Everyone is biased. That doesn’t make it okay, it just makes it a reality. With a single rater, bias will always effect a decision.

Assumption 4 - Everyone wants to be promoted

Nope. Not even close. Hell, according to a 2011 Barrett Koehler study, only 32% of your current managers want to be managers. Even some of the best leaders are reluctant to take on the new role. The reality is, most people want to be paid well to be good at their individual contributor jobs, that’s it. Promoting someone who really doesn’t want to lead is a recipe for low engagement…both for them and their team, and ultimately, high attrition. You can train management skills, but you can’t make someone care about others. Wanting to help others succeed (even if they surpass you) is the heart of leadership.

Assumption 5 - Performance Reviews are evidence

Traditional performance reviews are a written opinion. Let me repeat that, a written opinion. And likely (as we noted earlier) a written opinion of someone who never wanted to be a manager (and judge people’s performance) in the first place. Additionally, most managers have received little to no training on how to do their new jobs. Performance reviews are not evidence of anything other than the manager’s biased (see above) opinion.

Assumption 6 - Assessments are good predictors

Research is great and learning the commonalities of successful leaders is helpful…but it is also a reverse stereotype and a logical falsity (thank you Philosophy degree.) The assertion is that all successful leaders share XYZ qualities - the false logic is that all people who have XYZ qualities will be successful leaders. This is like saying all apples are fruit so that means all fruits are apples. It’s a false logic. Additionally, Harvard (and others) provide guidance on how to take and score well on leadership assessments (so essentially, they are gaming the test.) Regardless, such assessments have seen a loose correlation at best. And correlation is NOT causation. (for more fun with correlation visit - http://www.tylervigen.com/spurious-correlations)

A better way

Surprisingly, picking better leaders for a team is easier than most companies make it. Despite all the leadership assessments, performance reviews, 9-boxes, and other instruments in place; the easiest (and most effective) way to determine who would make the best new leader for the team…is to ask the team.

Your team knows who they trust, who they respect, and who they would follow. They also know who they don’t and wouldn’t. Gathering feedback data from the people most impacted by a new manager over time is the most effective way to determine whom will be most successful in the role. Lazlo Bock, former SVP of People at Google, suggests “taking the power AWAY from managers to hire and promote and instead use data to make more effective promotion decisions.” We couldn’t agree more.

That’s not to say you need to completely democratize succession planning, but it you aren’t heavily weighing the sentiments of the team, you are ignoring a HUGE chunk of data that can reliably predict leader success.

A Path Forward

Ohos was designed with this express purpose, to aggregate data from multiple perspectives on how well individuals do their job and how trusted they are to lead others…all of it over time. It is anonymous (to ensure honest feedback devoid of power dynamic) and it is from everyone who someone interacts with (to provide unbiased aggregate).

Our “why” is we believe everyone deserves a great place to work and great leaders to work with. “How” we do that is by providing a simple, easy, and fast tool to collect honest and unbiased feedback so companies can make more data driven decisions and help managers. That is “what” we do. Care to join us?

If you would like to learn more about turning your company into a feedback and data driven organization, contact us. We’d love to help you get started.