How can organizations get a good picture of the individuals capable of leading others?
Most decisions about frontline leadership promotion (more than 80 percent) are based on manager recommendations. According to DDI’s Global Leadership Forecast 2011, only one in three organizations use validated tools to make leadership promotion decisions.
Surprisingly, only 60 percent of organizations are using interviews to help guide promotions. Even more curious only 26 percent of organizations are using leadership tests. Just 19 percent use simulations to make their selection decisions for frontline leaders.
Don’t get me wrong – manager recommendations are important. But placing too much emphasis on recommendations—especially in the absence of employee assessment tools with higher validity—can lead to poor decision-making. Successful employee selection decisions need to be based on more than recommendations. Studies show that 41 percent of companies using leadership tests reported strong bench strength compared to just 18 percent who report a weak leadership pipeline.
Hiring managers need to focus less on technical skills and consider people skills when selecting frontline leaders. Companies train and develop individual skills but don’t place enough importance on the skills for managing others. For example, a software engineer might receive training for project management and coding skills and may even be encouraged to gain certification in a number of software languages and applications. Because he has excelled as individual contributor, his next career rung is supervision. Unfortunately his expertise lies in the technical aspect of the job and at best he might receive one or two days of training on how to manage other people, build teams, engage multiple work styles, and empower employees. Unfortunately nearly nine out of ten technical experts promoted into leadership positions need development in managing relationships, 69 percent in coaching employees for improvement, and 68 percent in empowering and delegation. Over one half of all first-time leaders fail.
Business outcomes of promoting the wrong employee into a leadership role can be devastating. Sixty-nine percent admitted the promotion of the wrong leaders resulted in loss of employee engagement. Nearly two out of three experienced loss of productivity. One in four respondents indicated their business suffered a loss in profitability. More specifically the results showed:
Loss of team member engagement…69%
Loss of productivity…65%
Leader left organization…59%
Team members left organization…57%
Loss of leader engagement…40%
Forced to move leader back to individual contributor…32%
Loss of profit…26%
Source: Be Better than Average
The behaviors of mediocre leaders compared to high quality frontline leaders are well-documented. Managers who rated their pipeline and development quality as low described 62 percent of their organization’s frontline leaders as unprepared, 46 percent as indecisive, 28 percent as scattered. One in five frontline leaders were “scared.” On the other hand, organizations who consider their bench strength and development high described their frontline as confident, ambitious, innovative, and dependable.
It is worrisome that the most important skills for future frontline leadership success are also the skills in which leaders are least effective.
In addition to developing a larger and better leadership pipeline, leadership tests and assessments also help potential leaders to understand what skills they need to develop. This is critically important, as newly promoted leaders – especially technical experts – do not understand where their development areas are. Research has shown that nearly 90 percent of frontline leaders have at least one leadership skill where they rate themselves above their actual skill level (Finding the First Rung, DDI, 2010).