Why is it so hard to predict the success of leaders before we hire or promote them to the next level? We hear about the failure rate of new CEOs and senior leaders all the time, and hear from the “experts” how shortsighted and ignorant we are for not being able to get it right.
OK, now I’m one of those idiots responsible for identifying the next generation of leaders, so excuse me if I get a little defensive here. The reason our success rate is barely better than 50%, maybe worse depending on what study you’ve read, it that IT IS DAMN NEAR IMPOSSIBLE TO PREDICT THE FUTURE!
Sorry for shouting. I’ll give you two examples to make this point.
1. Drafting NFL quarterbacks.
Pro football has the most sophisticated succession planning and development system on the planet. Future quarterbacks are identified and groomed from the moment these little future stars play their first Pop Warner game. They are groomed and scouted through high school and college. The NFL spends millions on scouting departments, Wonderlic tests to measure intelligence, combines, and all sorts of ways to measure and assess a player’s ability. They watch hundreds of hours of tape, studying the player perform under pressure. You would think pure physical abilities would be WAY easier to assess than leadership ability, right?
Well, if it were so easy, how do you explain:
- Matt Leinhart
- Jamrcus Russell
- Ryan Leaf
- Akili Smith
- Art Schlichter
- Cade McNown
- Dan McGwire
- Steve Pisarkiewicz
- Todd Marinovich
- Jim Druckenmiller
Would anyone care to bet your mortgage on Colt McCoy or Tim Tebow?
These “can’t miss” quarterbacks were all taken in the first round and all turned out to be colossal busts! The failure rate of quarterbacks selected in the first round is so high that some teams are afraid to spend a first round pick on a quarterback.
2. Picking stocks.
Wall Street hires some of the best and brightest MBAs from the top schools and trains them to be stock market analysts. They spend millions on the more sophisticated modeling software, they study the industries and companies they are responsible for, and work their fingers to the bone on the behalf of their clients. Yet, some would say a blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.
When it comes to predicting the success of quarterbacks and stocks, it seems the best pickers in the world have about a 50.5% success rate. That’s just a little better than the odds of winning at roulette or blackjack at the casino.
Again – it’s impossible to predict the future. There are just too many variables. Call it chaos theory, call it whatever you want, but until someone invents a time machine, 50.5% may be the benchmark.
When it comes to leadership development, even the best companies don’t get it right all of the time. However, they do a better job at it than most of their competition and even a 20% improvement gives them a huge competitive advantage.
Before we turn to the blindfolded monkeys, are there some things we can do to stack the deck a bit in our favor? Sure – we can:
1. Cast a wider net and create an environment and infrastructure where everyone has the opportunity to reach their high highest potential. 50% of 1000 gives you a much larger pool of candidates than 50% of 100.
2. Improve our ability to recognize talent early and use all of the tools at our disposal to accelerate their development and prepare them for potential roles.
3. Use consistent, reliable criteria to select for potential, instead of strictly relying on past performance or meaningless criteria.
4. Support our high potentials once they are promoted and give them a better chance to succeed (give them a mentor, a coach, feedback, etc…)
Do these things, and do them well, and then roll the dice. Hopefully we’ll get it right slightly more than half the time, and be able to admit it when we get it wrong and minimize the damage.
What do you think? When it comes to assessing leadership potential and leadership selection, is 50.5% a realistic expectation, or can we do better?