Given today’s dynamic business environment, how best can an organization prepare for the future? While companies manage to just about survive in the complex environment, are they thinking about the long term? Are they well prepared to take on upcoming challenges of the future?
Organizations often invest a lot of time in predicting the nature of these challenges – who will be the competitors, what new products should be launched and what kind of data or technology will lead to disruption; but not many invest or focus their time and energies in assessing their own capabilities and how well they are positioned to take on these challenges. In such a scenario, how can one prepare for an uncertain future, given that there is only one certainty and constant to the future - the need to change, innovate and overcome challenges? The answer is, by nurturing the right talent. For an organization, the strongest armour for the future is its people and how quickly they can change, innovate and build new capabilities. How does one then build a people-driven organization for the future?
Hire for attitude, not experience
Most companies have interview processes that filter out candidates based on skill-sets or a set of prior experiences. It is important to, however, step back and assess if these skills would continue to be relevant in the future. What if the business is confronted by a new challenge where your existing workforce lacks the required skill and their existing skill-sets prove to be irrelevant? It is during such situations that having a workforce with the potential or the right attitude to build and develop new skills quickly becomes necessary.
Firstly, organizations must design their interview process to find potential or the right attitude. Ask not what the person has accomplished in the past, instead, what is the toughest situation they have handled and how they overcame it? Young fast-growing organizations look for ‘energy and drive’ in people which often gets typecast by wrong personality traits. For instance, a candidate who is a strong communicator, can talk passionately and articulate their projects well, are misjudged to be the right choice.
Secondly, eliminate bias from the interview process. Team managers often say, “let’s hire this person as s/he has handled problems of the same nature before or has done similar work in her/his past role”. While that can get you the desired outcomes in the short run, what happens once that skill gap is bridged? Does the person have the right attitude to inculcate new skills as required? One way to take away this manager bias from the interviewing process is to have a cross-functional interview process/panel, where each panellist has an independent perspective and would not over-index a candidate on past knowledge or experience.
Thirdly, it is important to keep raising the bar with every new hire. In any organization, one of the core values should be to hire better people than themselves. It is a very deep and nuanced concept to understand and internalize for managers given that in traditional organizational setups, managers tend to feel insecure if their team member is better than them. Managers who understand and accept that hiring someone better than themselves will give them the bandwidth to take on greater responsibilities are able to scale up faster in their careers. And again, better doesn’t necessarily mean in terms of skills but attitude and potential.
Less is more
When solving business issues, we often tend to throw people at problems. In such situations, many organizations end up over hiring which becomes detrimental to the organization’s future and the individual’s personal development. How? Over hiring is the root cause of internal politics within the organization. Imagine a role for which two people have been hired. There will be dispersed accountabilities between the two and over time both will end up becoming insecure of their roles. The diluted role and responsibilities would lead to each wanting to create a different perception about themselves, thereby, leading to politics internally.
Most organizations fall prey to such internal politics. In organizations either logic can prevail or politics. When you think you need 100 people, hire 80. Leave room for people to stretch and do 20% extra. Let them build muscle and scale up.
Over hiring or overstaffing at different levels may help you in the short term but in the long run creates lesser accountabilities and a more insecure organization.
Reward potential, not performance
All organizations strive to create annual review mechanisms which are fair, meritocratic, help identify the right people and reward them well. However, most organizations don’t end up delivering these outcomes as desired.
Firstly, performance reviews have become an annual event where managers have to force rank their team members on a bell curve to help HR decide on how to spend their increment and talent budget. This defeats the entire purpose of performance reviews which should, ideally, be aimed at helping individuals develop and grow. Hence, annual reviews should be treated as a means to an end. The focus should be on continuous personal development. Even organizations such as GE who once pioneered the performance-based review system are now moving to continuous on-the-job feedback, development and review mechanism.
Secondly, this performance-based one-dimensional framework for assessing people is restrictive, as you are only reviewing and rewarding past performance. This doesn’t give us a view into how well the person is positioned to perform in the future. What if the person performed average in the past 6 months but has focused on the right inputs and has the right attitude to set her/him up for future success? Does it mean that every high performer will sustain high performance in the future when business environment changes? It is, therefore, important to add another dimension to performance assessment which takes the future into account. Let us call it the individual’s potential. The potential here is not the absolute potential of the individual. It is rather the individual’s ability, in the context of your organization, to take on larger, broader or more complex roles and responsibilities in the future. It is a mark of the individual’s scalability within the organization. How does one assess potential? Potential assessment needs to be objective like performance with clearly defined criteria and data. One way to measure potential is to assess the person against the organization’s values, given that these values drive behaviours which will help the organization build a strong culture.
At Rivigo, the Rivigo Leadership Principles (RLP) Score helps assess people on 9 leadership principles. How is this data collected? Live, real-time feedback on these leadership principles shared by individuals, peers, managers, team members through an internal mobile app. For instance, at the end of a project, your peer could give you a high score on ‘bias for action’ based on the actions and behaviours you exhibited during the project. This real-time on-the-job feedback not only helps you improve continuously but also prevents any bias if this were to be captured through surveys closer to annual reviews!
It is important to reward both performance and potential and perhaps over-index on potential as it is the true mark of preparedness for the future. Employee stock options can be a great way to reward and retain your high-potential employees or future leaders. High-potential people need to be aware that they are being prepared for future leadership roles.
Such a framework of performance and potential is a very powerful tool, not only in assessing people capability for the future but also businesses and even meetings. Even when a function or a team may be performing well, the real question we need to ask is, if the overall business is high on leadership score i.e. is it being set up well for the future? This also allows managers to have difficult conversations with team members who may be performing well today but may not be making the right investments for future roles. This framework gets further hardwired into the organization when it is linked to the interview assessment criteria itself.
Great team managers spend a disproportionately high amount of time in selecting and building their teams. The quality of a team is the biggest source of reliability for dealing with future challenges. Having the right people in the right places is a task no manager should delegate. Yet many managers fail to deal smartly with underperformance.
The future of an organization doesn’t happen by accident. It is the outcome of strong people processes and culture - having the right people in the right jobs, rewarding and developing them well. It is high time that organizations start thinking radically about people practices and evaluate if the current practices are readying them well for the unforeseen challenges of the future.