Two weeks ago I began a discussion of the complex process of evaluating potential chief executives, with a look at the so-called Big 5 personality traits on which many such evaluations are based. These five traits in turn have a total of 21 secondary characteristics. I looked at how all of these traits are evident in a group of 20 top executives of the listed manufacturing company in question.
Following a thorough analysis, it is now time to focus more on the two CEO candidates, Mr Metha and Mr Suwan. I begin by reminding the CEO that no two people are alike, so the person he and the board choose isn't going to do the job the same way he has. Therefore, we should look at the candidates, their skills and personalities and what and how they can contribute to the company in the capacity of CEO.
Mr Metha is strong in terms of extraversion, which makes him an outstanding negotiator. A pleasant manner and a high degree of diplomacy have made him well accepted by his team as well as by the board of directors. He has high ambition to expand the business, supported by extremely high innovation and analytical thinking skills. These enhance his ability to create a new business model that may not be easily understood by others at first. He is also a bit low on self-confidence. Hence, he may worry too much and struggle to cope in a pressure situation.
Mr Suwan also can be a good negotiator but tends to talk too directly most of the time. However, since he has a moderate degree of emotional self-awareness, he knows where to draw the line. This same awareness means he also knows how to play with others' emotions in order to get the job done. He has a low degree of analytical thinking, which puts him at odds with Mr Metha on some occasions since he has less ability _ compared with the larger management group _ to see new patterns, especially new business models.
'9 Box' analysis: After offering the above brief analysis, I ask the CEO how he sees the advancement potential among his top two lieutenants. He provides me with information on business performance and actual behaviour in the workplace. He may favour one person over another, which is normal human behaviour. In order to approach the succession issue systematically, I draw him into a well-established concept called "9 Box talent management".
The process calls for each individual to be evaluated based on two matrices: performance and potential. "Performance" measures how well a person has performed in his or her current role in the past year. "Potential" measures potential for future performance contributions, without knowing exactly what roles he or she will be assigned.
Here's where it gets tricky, and where many companies struggle to use and interpret the analysis properly. People often appear and disappear from the high-potential list based on ratings of current performance than on their potential for future performance.
True meaning of 'potential': Reasonably, "potential" is the combination of an individual's intelligence, business exposure, training, development, relationship effectiveness and other factors that, after a period of time, don't change much from year to year. Potential should be a relatively stable factor. So why would the assessment of an individual's potential change so easily from year to year?
New theories state potential should be considered based on two important factors: cognitive ability (how much mental capacity the individual has) and certain personality facets that can be bundled into another domain called "behavioural growth potential".
We know CEOs and other top executives typically have above-average IQs. When this is combined with certain behavioural (personality) traits, we can begin objectively to identify future growth potential. We know smart people are more likely to succeed but that intelligence alone is not enough. It has to be combined with certain aspects of personality that allow the individual to leverage intelligence to develop strategies, lead, inspire discipline and motivate an organisation to follow an accepted vision and set of goals.
Only recently have we been able to measure the combination of these human qualities and traits dependably. Ongoing research shows that by combining cognitive ability and up to 10 facets of personality, we get a measurement tool that can help us to identify the relative potential score of individuals and compare them with others.
This allows an organisation objectively to measure potential separately from performance. The organisation enters the individual performance rating on the performance axis, and Advancement Potential is located in the 9 Box grid at the intersection of the separate measures of Performance and Potential, as the illustration shows.
A final word on advancement potential: In this respect, both Mr Metha and Mr Suwan have been asked to take a cognitive ability test. The results of this Applied Reasoning Test combined with their previous personality assessments are brought to put into to the 9 Box analysis in order to complete the picture.
As the illustration shows, Mr Metha has a higher degree of advancement potential than does Mr Suwan, with the highest potential to be a "top talent" (top cell above his score of 72), although he also could be a "developing top talent" or even a "diamond in the rough". Under these three conditions, it is up to him and a performance assessment from his direct boss, the CEO, to locate him where he truly belongs.
On the other hand, the 42 rating for Mr Suwan indicates just two scenarios: "high" or 'modest" performer. Again, it is up to the CEO and the board to review his performance thoroughly in order to plot him to the actual cell.
At the time of writing this article, the process was still under way. Now the ball is in his court, and the CEO has to call the shots. Who does he want to propose to the board as his successor? It will be interesting to see the outcome, and you may have comments as well.
Sorayuth Vathanavisuth is a former chief executive of the Thailand Management Association. His areas of interest are leadership development, talent management and executive coaching. He can be reached at email@example.com
About the author
- Writer: Sorayuth Vathanavisuth