The new CEO of a leading organization set up a meeting with their CHRO and Chief Talent Officer (CTO). The CEO began the meeting with: “The Board and myself have a new growth strategy which will require a significant change of focus.” Fear and trepidation quickly set in for the CHRO and CTO.
The CEO went on to explain that although the organization had a reasonable focus on customers, their reputation was primarily built on operational excellence and reliability. With much enthusiasm, the CEO went on to share more about the new growth strategy, one with a laser like focus on significantly enhancing the customer experience, yet not losing sight of the need to maintain their operational excellence. This would require a major change in leadership thinking and behaviors.
It would also necessitate a major shakeup of the succession planning process whereby the key attributes of adaptability, flexibility and agility in the leadership team would be paramount to support the rapid transformation of the organization.
This change meant the characteristics of their senior executives and leaders needed to be quite different from those emphasized in the past pertaining to operational excellence. The key question was: “How do we assess the potential of our people to take on larger roles and be part of our succession plan in a rapidly changing business environment and with a new growth strategy?” Additionally, the CEO wanted a way to accurately identify “diamonds in the rough” who might not have been pinpointed through the traditional succession planning approach. No easy task, thought the CHRO and CTO.
Potential and succession planning
In a recent SHRM article, the authors do an excellent job of explaining the challenge associated with accurately identifying high potentials as part of the succession planning process. The authors defined “potential” as: “…how well you will perform in future jobs that you have never had and with demands that you have never experienced.”
However, traditional methods of measuring potential are usually subjective, as a manager often assesses someone’s potential based on their current performance, without access to what capabilities lay “under the hood.” As with financial disclaimers, “past performance is not a reliable indicator or predictor of future performance.” This places managers in a challenging, if not impossible position. Going back to the definition of potential, they would need a crystal ball to accurately assess an employee’s future performance.
The authors further comment that “research indicates that a person’s current performance rarely predicts their future performance in different, more complex, and/or bigger roles.” That is why a different approach is needed.
Brain science, measuring potential and succession planning
What can neuroscience and cognitive science bring to measuring potential and succession planning?
Think of the brain as an iceberg, with the conscious mind above the waterline and the subconscious brain below. The Cattell-Horn-Carroll Theory of Human Cognitive Abilities is a model that analyzes and categorizes cognitive abilities based on more than 50 years of research. To make the theory more understandable, I have adapted some of its terms:
Fluid thinking (street smarts and future orientation): Fluid abilities (Gf) drive a person’s ability to think and act quickly, solve new problems and encode short term memories. John Horn described it as what a person uses when they don’t already know what to do.
Fluid thinking supports a person’s adaptability, flexibility and leadership agility. It is a measure of how they think, especially when dealing with new and unfamiliar situations.
It’s underpinned by 10 subconscious thinking habits (or “mini-brain computing programs”), such as analytical thinking, innovative thinking, conceptual thinking, strategic thinking, abstract thinking, etc. Fluid thinking is also used to address VUCA situations, where a person cannot rely solely on past experience.
Fluid thinking peaks in young adulthood and then declines as the brain ages, but it can be enhanced as an adult by tapping into the brain’s neuroplasticity (Figure 1).
Crystallized knowledge (book smarts and past experience orientation): This is the knowledge a person has accumulated over their lifetime. It is what they know. It is language-based and includes:
- Subject matter expertise (domain knowledge) and
- Routine expertise (the ability to leverage off past experience).
Crystallized knowledge continues to increase with age as a person accumulates more knowledge. While knowledge used to equal power, it is no longer enough. In the AI Age, leaders need to lift their game by being more adaptable and agile – the domain of fluid thinking.
An innovative approach to assessing potential and succession planning
When managers assess a person’s potential, they mainly use the “crystallized knowledge” lens, and what the person has shown through their past and current performance. While this method of assessment is an important input to succession planning, it is not an effective way to predict future performance. Relying predominately on assessing crystallized knowledge to measure potential is like driving forward while looking in the rear-view mirror – a dangerous approach.
Therefore, an innovative approach to assessing a person’s potential would be to measure their fluid thinking capability and their related cognitive strengths and derailers. This provides much more insight into their future ability to handle broader and more complex roles, as well as their ability to positively contribute as leaders in a significant transformation process as desired by the previously mentioned CEO.
To understand how the CEO’s brief could be addressed, see the fluid thinking framework illustration (Figure 2).
See below for a summary of the fluid thinking key pillars and their related 10 subconscious thinking habits:
- Controlling attention: The CEO wanted a laser focus on customer experience.
- Focused thinking – research indicates employees are distracted 28 percent of their working day resulting lost productivity of $34,000 p.a. per employee on average.
- Complex problem-solving: With the change in growth strategy, the CEO highly valued the ability to solve complex problems quickly and effectively in a new and uncharted business environment.
- Analytical thinking – utilized to break down complexity and accurately define the problem.
- Innovative thinking – supports generating multiple creative solutions.
- Conceptual thinking – used to prioritize potential solutions, prior to selecting the optimum solution.
- Strategy, planning and execution: Developing a creative strategic approach to implement the optimum solution to address the over-emphasis on operational excellence.
- Strategic thinking – develop the overall high-level approach and path forward, plus the ability to clearly communicate the strategy.
- Abstract thinking – utilized to develop a detailed plan to implement the strategy, plus effectively delegating the associated tasks to the relevant people.
- Operational thinking – the ability to successfully implement the strategy and plan by executing the relevant tasks pragmatically.
- Social leadership: The CEO valued strong soft leadership skills as they would be paramount in bringing people along on the transformation journey
- Nonverbal thinking – underpins the ability to read body language and build rapport.
- Perspective thinking – the ability to see and feel things from others’ perspectives.
- Intuitive thinking – important in “reading the room” and having a strong gut intuition when dealing with people.
Fluid thinking, measuring people and succession planning in practice
The opportunity for the CHRO and CTO to pilot the fluid thinking assessment of potential arose quicker than expected due the departure of an experienced manager at short notice. Using a traditional crystallized knowledge assessment approach, two internal succession plan candidates were shortlisted. However, it was recognized that this would be a significant step up from where they were currently operating.
There was a dilemma on who to appoint, as although they were both respected, they were vastly different candidates. Candidate A was seen as driven, motivated, diligent and hard-working. They arrived early and left late, built a collaborative team environment, and were happy to do the heavy lifting when required. Candidate B was perceived to be more laid back, yet still delivered high-quality outcomes. They arrived on time and rarely stayed late, and their team was professional and delivered high-quality output with a minimum of fuss.
The selection committee found that both candidates seemed capable of undertaking the new role from a crystallized knowledge perspective. To help make the decision, the fluid thinking capability of both candidates was assessed.
The results of the fluid thinking assessment surprised the selection committee:
- Candidate A scored in the lower range of fluid thinking. This explained why Candidate A was always the first person to arrive in the morning and the last to leave. While the quality of their output was fine in their current role, due to their slower thinking and information processing capability, they needed to work long hours to deliver the required outputs. They were lower in the complex problem-solving pillar and the strategy/planning/execution pillar. They were already pushing themselves to their limit in their current job, so leading in a much larger, broader, and more complex role would have been difficult for them.
- Candidate B scored in the moderate range of fluid thinking. They were able to work more effectively and efficiently, so didn’t need to work long hours. They were also higher in the complex problem-solving and the strategy/planning/execution pillars. In fact, they were probably underutilized in their current role and would be well-positioned to thrive in the new role. In addition, they were well-rounded in the social leadership pillar, which was important for leading the transformation process.
The decision was made to promote Candidate B and provide a program to enhance their fluid thinking to an even higher level given the importance of the new role. While Candidate A was disappointed in the outcome, during the fluid thinking assessment debrief, they confided that they were bordering on burnout and would have probably struggled if they took the new role. Because they were well-respected, it was decided to also upgrade their fluid thinking so they were much better equipped for the next promotion, which they duly received.
The CHRO and CTO were pleased that they had decided to assess the candidates’ fluid thinking capability as part of the decision-making process. They were concerned that if Candidate A had been promoted, it would have been a case of the Peter Principle where the person was promoted to one level above their current capability – a disaster for all concerned.
The business world is changing at an ever-increasing pace; the half-life of crystallized knowledge is rapidly decreasing, and AI/digital disruption will require faster and more agile leadership adaptation. In this environment, taking an innovative approach to measuring potential by assessing fluid thinking is paramount for an optimized succession planning approach – how well this is undertaken could very well decide the organizational winners and losers of tomorrow.
The figures presented in this article belong to the author and are provided for illustrative purposes within the context of the content.