Speaker A Methods that have been described so far are probably very accurate ways to make inferences about someone's potential. And a matter of fact, the methodology that Glenn just described was the basis used with the US earning Research Institute in being able to validate the judgment of potential and the measurement of information complexity correlating nearly one to one. So the question then is, when you're trying to help an organization implement consistently and across the entire organization a methodology for evaluating current and future potential, what methodology should you use? And I would like to answer the question in the following way.
Speaker B You need to answer the question based.
Speaker A On what is going to best support the accountability leadership system? And now I'll explain to you. I'd like to make some assumptions about potential similar to what's already been described. First of all, potential is a construct. It doesn't exist in reality, it's a construct. It refers to the possibility of becoming and the inference, the hypothesis that most of us have, it's determined by the brain's capacity, the brain's capacity to make novel connections that are necessary to solve problems.
Speaker B That's what potential is.
Speaker A Mental force.
Speaker B Now, potential cannot be directly measured.
Speaker A None of these three processes measure potential. What they do is they measure properties of potential or they judge properties of potential. Some methods look at the patterns that people recognize when formally tested.
Speaker B Some methods look at the types of connections that people exhibit. Context about what field. I'm finding now the value of assessing current potential.
Speaker A We've all been talking about it.
Speaker B If it determines the success in any.
Speaker A Particular role, if the Cynic quanone is having the raw potential to handle the complexity that is embedded in that role.
Speaker B Then we need that to significantly improve.
Speaker A The accuracy with which we fit the person to roll.
Speaker B If that were the only need, any.
Speaker A Of these three methods I think would.
Speaker B Be equally useful for me.
Speaker A On the other hand, of equal importance.
Speaker B Is the need to take managers through.
Speaker A The process of judging current potential subordinates once and twice removed.
Speaker B Because it's the hard mental work of thinking through that manager's experiences with those.
Speaker A Subordinates one and two levels down and.
Speaker B Comparing the way they sense and have.
Speaker A Experienced that person handling work against what they're learning about these levels of complexity.
Speaker B And what they mean, that that is what's necessary to sharpen the manager thinking about work itself.
Speaker A I don't believe managers get work. They really get it until they go through this process.
Speaker B It focuses their greater attention on all support capabilities. In order to judge people's potential, you've got to take a look at how effective they are and why in your gut it feels this person is not.
Speaker A Demonstrating the degree of effectiveness that you.
Speaker B Believe he has the potential. What does a manager mean when he says, I don't think he's working to his potential? A manager to say that that manager.
Speaker A Is implicitly saying, I believe this person has more raw capacity, this person could be more effective than he actually is demonstrating.
Speaker B I believe that getting managers to go through the process of doing this then.
Speaker A Helps them identify the source of the.
Speaker B Gap between their potential effectiveness and their demonstrated effectiveness. If you want managers to develop their people, managers need to accurately diagnose why they're not as effective as they could be. And then finally, that's a prerequisite for.
Speaker A Effective coaching and mentoring.
Speaker B When I have clients who are evaluating people outside the company, I now have.
Speaker A Real confidence in sending them to either of you. I'm really impressed with the presentations you do CIP better than I do. I'm very impressed with the quality integrity of the CPA process.
Speaker B So we then need to think of the value of assessing current potential, future.
Speaker A Potential, in terms of if we have.
Speaker B Confidence that we can translate strategy into.
Speaker A The organizational analog and we can then say, based on the organization's current requirements. If our strategy is successful, we will need to have this organization in two years. This one in five years. This one in ten years.
Speaker B Then you need to have some way.
Speaker A To evaluate your pipelines of potential so.
Speaker B That you can determine whether or not.
Speaker A You have sufficient people in tow to meet the requirements of that organization in two, five, and ten years. The same time, it helps the managers meet their own accountability, to be proactive.
Speaker B In making adjustments as they identify gaps.
Speaker A Or overages, and to begin to do the appropriate measurement to prepare the pool.
Speaker B Of talent for the requirements in the future.
Speaker A Now, for the employee, if the organization.
Speaker B Is committed to assisting each employee in.
Speaker A Being developed so that he or she.
Speaker B Has the potential, the opportunity to realize.
Speaker A His or her potential, then the mapping of that person's curve potential is a necessary part of the dialogue, and I think you talked beautifully about that. Okay, now, what are the practical issues in judging potential? And here's where this is now 15 years of experience. It's not theory. It's not scientifically based. This is my empirical understanding, is managers are not able to accurately judge people's current potential until they build in a.
Speaker B Very hard, personal way, a mental model.
Speaker A About what these levels of role complexity are really about.
Speaker B If you don't understand how work differs.
Speaker A From this level and this level and.
Speaker B This level, how in the heck are.
Speaker A You going to really say, I believe this person is big enough for work at this level or this level or this level? So when we work with clients, whether or not it's a full organizational project, or whether it is simply to help them map their talent pool, the first piece of work is getting them to understand how their existing organization max out against levels of well. This requires a fair amount of rigor.
Speaker B In role sizing and using time span.
Speaker A Initially, our experience is not completely you.
Speaker B Need to do enough time span information to have enough benchmark roles at each.
Speaker A Level so that you can establish with managers an understanding of why those roles are level five, high level five, low level five, why those roles are mid level four.
Speaker B And in that discussion, then after they.
Speaker A Get it about those 20 or 25 roles, then you can start piling on the hundreds of additional roles in a much more efficient way of sizing those roles relative to the others. I, quite frankly, have not ever found a client that would be patient enough or willing even to have time spans of 1000 roles or 10,000 roles. That's not reality.
Speaker B It's in these discussions where managers are actively debating discussing the underlying basis for.
Speaker A Complexity in each role, that they begin.
Speaker B To construct this dynamic model. They begin to feel what that complexity is about as they describe to each other how this kind of job requires dealing with more variables than that kind.
Speaker A Of job or this kind of job has more changing variables, then they start to really understand what that complexity is about.
Speaker B The problem is, these discussions will inevitably trigger hot buttons about status and turf protection.
Speaker A Because, see, if I evaluate the roles in my part of the organization low, that must mean I have a lower organization than you do. This requires firm admonition on the part of the consultant and on the part of the manager once removed, to exhort and explain and encourage and control managers to be mature and impartial and as.
Speaker B Objective as they know how, and to bring it to their attention when clearly.
Speaker A They'Re not doing so.
Speaker B The first time out.
Speaker A When you do this process, it's messy.
Speaker B And I finally concluded it must be.
Speaker A Messy because you're trying to break new ground in the wedding manager's thinking. It's very much what Herb said this morning. You're pulling people into an entirely different conceptual world. My argument is, without developing this model.
Speaker B Fully, asking managers to assess the potential.
Speaker A Of their people is far less useful, far less accurate. So what do we do? As I'm sure all of you do, you spend a lot of time training people about levels of complexity. You use one of Elliot's favorite expressions when he and I were talking with the CEO of Ford about twelve years ago about what organizational structure they needed to go to should they go from their current 13 or their current twelve, up to 13 like GM, or down to eleven like Toyota? Ali said. Did the CEO of Ford You can have any number of levels that you want as long as it's eight. But the key here is helping managers then understand the relationship between levels of complexity and different levels of mental capability. And I found it very useful to take a page from what Glenn was just describing. Book level one work. And the more you can do, it inductively, and you can get people to explain to you what is the nature of work?
Speaker B What kind of decisions do people need to make on the front line?
Speaker A And they'll say they're short, they're immediate.
Speaker B They'Re simple, and eventually someone says they're binary.
Speaker A And then, well, if that person gets.
Speaker B Stopped and has to go to a supervisor, what do we expect her to.
Speaker A Be able to do that we don't.
Speaker B Expect the subordinates to be able to do to solve the problem, even if she didn't have any more education.
Speaker A After a while someone says, well, you.
Speaker B Got to collect information and analyze it.
Speaker A And come up with some hypothesis about.
Speaker B What the problem is. AHA, and what is it that the.
Speaker A Department head or the unit head or.
Speaker B The superintendent needs to be able to.
Speaker A Do that the supervisor doesn't need to be able to do?
Speaker B Now they got a plan, they got to look backwards in time, they got.
Speaker A To project forwards in time, and they.
Speaker B Begin to describe the types of decisions they have to make.
Speaker A After we go through the model, which I won't bore you with, I say.
Speaker B Look, this is the tactical world.
Speaker A Bubble three is the unit in any business unit of where things get done. That's where current cash flow is generated. Current P L comes from level five, and that's the strategic world.
Speaker B And that's how I make the connection.
Speaker A About abstract conception, because the true strategic order, not everybody says I'm working on my strategy. But real strategic work is dealing with abstraction. Cash flow, asset worth. You can't measure asset worth. You have to develop models that will help you in the worth of the asset.
Speaker B But you can measure cash and you.
Speaker A Can essentially infer directly cash flow. Those are different levels of complexities within the normal adult symbolic world. Level four, that's universal joint, that's your operational transducer. That's where the general managers of the functions within a level five business unit are taking the model and driving it into tactical elements that their subordinates need to implement. That's where the parallel processing comes from. That's where the critical path analysis is.
Speaker B Then I start to talk about information.
Speaker A So then I build up gradually to the rosetta system. Every manager has a big rosetta stem in his or her life as we go through this process because the objective.
Speaker B Is to get managers to feel in.
Speaker A Their bones how these different roles are different from each other in terms of the degrees and levels of complexity. So we developed software originally based on Access now on SQL Server using Visual Basic and out Visual Studio, in which we could build the tree in the organization in the software, and then pull up any part of the organization as dynamic icons.
Speaker B And then we start with the benchmark roles and get them established.
Speaker A And then we start to examine the.
Speaker B Additional it's in the discussions where you.
Speaker A Start to see the light bulbs turn on, not simultaneously. The real bright high mode post, they're already on and then the next group starts to turn on and there's always a group that's low. Now this, when they're done, is about, first time out is about 85% accurate in terms of what they eventually arrive.
Speaker B At because they're still not clear what this means. So now you have to have a model.
Speaker A We have a four by four model that we define a role by its size, level, role complexity, by the types.
Speaker B Of work inherent in the role, the functions, the processes, the practices, the nature.
Speaker A Of work in the role. Is it an individual contributor role? Is it an analytical role? Is it one that has a high degree of interaction with other people? Is it primarily a managerial role?
Speaker B And what are the role relationships?
Speaker A Our role specifications follow this model. What's the size of the role, the.
Speaker B Type of work in the role, the.
Speaker A Nature of work in the role, and what are the working relationships?
Speaker B Because if people can begin to translate.
Speaker A The roles accountabilities into those dimensions, we.
Speaker B Can then say okay, the first question is, does this person possess the cognitive capacity so that you feel confident he.
Speaker A Could do the work at this level?
Speaker B If he knew enough and cared, could.
Speaker A He work at this level?
Speaker B And if he could, does the person possess sufficient skilled knowledge for the types.
Speaker A Of work that he can do the work of this role? And if she could, does the person.
Speaker B Value the nature of work enough so that she will apply herself to get.
Speaker A The results required by this role?
Speaker B And finally, does the person possess the.
Speaker A Maturity so that he or she will work well in this role given the working relationships required by the role? This model works as well with CEOs of Fortune 100 companies as it does with that long in the tooth first line shop manager who has been there for 40 years. For us, the major breakthrough in being able to deal with small groups company with 1000 people, 150 managers, where we could do the post ups to dealing with a company with 10,000, 50,000, 10,0000 people was the development of our software.
Speaker B Because what this does is it allows.
Speaker A Managers to have these calibration sessions which are wonderful raw, compare their judgments about.
Speaker B Subordinate current and future potential against the.
Speaker A Judgments that have already been made about other folks.
Speaker B Because it's in that trying to they squint at the wall, they're trying to see the raw potential and then they had discussions.
Speaker A And the more opportunities managers had to.
Speaker B Review and compare and discuss their assessments.
Speaker A Of people against other people, the more subtle is their ability to make the.
Speaker B Distinction about why that person is a.
Speaker A Low level poor guy and that gal is a high level poor gal.
Speaker B So this allows managers then to further.
Speaker A Refine their judgments and improve the accuracy of the judgments.
Speaker B But then we're also able in real time to say now if this is.
Speaker A What you think people's current potential is.
Speaker B Then by career end.
Speaker A This is what empirical data suggests their.
Speaker B Career ultimate potential would be. So the impact of seeing immediately what happens if you change current potential on.
Speaker A That person's career potential or vice versa, allows for further correction.
Speaker B In particular, empirically, we began to see.
Speaker A That the young, high potential people always.
Speaker B Have a halo effect.
Speaker A Some of it may be the high mode. Some of it may be the question that we ask, which is imagine this person fully experienced. If you got a 23 year old.
Speaker B And you start to imagine them fully experienced, it's ten years from now.
Speaker A And so they literally project them forward in front anecdotally our experiences first pass. This is before we've reorganized, because we have to do this in order to reorganize and figure out who goes in what role. The first timers, the beginners the assessment.
Speaker B They end up with is 85% to.
Speaker A 90%, consistent with their third assessment a year and a half later.
Speaker B So there's some variability. Well, we start with definition.
Speaker A This is a screenshot from our software that shows the final judgments of people's current potential. What you don't see on the screen is the person's current role.
Speaker B But as a way of explaining to.
Speaker A Managers, this is headroom. This says that this person has a whole level of headroom. He's got one level of potential greater than the size of multi tangent. And these are biological maturation curves that aren't theoretical, they're empirical. And this is where interpolating this person.
Speaker B Ought to be in ten years.
Speaker A And you've already confirmed that you believe it's consistent with this person being there by career end.
Speaker B The difference between his current potential and.
Speaker A His career potential, that's runway. We've been finding language that works for people headroom and runway words.
Speaker B I get that. Now, the problem is that all organizational.
Speaker A Processes for evaluating potential and effectiveness is that the peers doing the evaluating are reluctant to confront each other's judgments, their biases, the different standards they have, both because in Canada, because you're also polite, and also because casting the first stone, I don't want you to challenge my judgment.
Speaker B So for that reason, the mor must be held accountable by his own manager.
Speaker A That was not in the room for.
Speaker B Ensuring the process with that mor.
Speaker A Subordinate managers is one that holds those.
Speaker B Subordinate managers accountable for making honest and accurate judgments and encouraging a debate and.
Speaker A A discussion that surfaces the biases and the different stakeholders. It's got to be within an accountability framework to work.
Speaker B So since this involves judgments, the mor has to set the expectations and model.
Speaker A Open discussion, honest discussion, encourage debate, and.
Speaker B Must be willing to challenge people's judgments.
Speaker A Not to say I overrule you, but.
Speaker B Gee, I have a different sense of.
Speaker A Jane, tell me what you see, and.
Speaker B I'll tell you what I see. And to encourage that kind of deception.
Speaker A This is an equilibrium process, not a.
Speaker B Vote, not a consensus.
Speaker A My belief that the mor that's accountable for the final judgment of his subordinates once removed and her subordinates once removed. But it's in the context of the discussion.
Speaker B What's the question?
Speaker A Very simple.
Speaker B Imagine this individual in this size role, as bright as she is, but having had a whole different set of life.
Speaker A Experiences in a role that she gets speeding tickets on the way into work in the morning. She's so excited about it.
Speaker B And imagine throwing a cocktail of Prozac.
Speaker A And lithium and psychotherapy to get rid.
Speaker B Of the dysfunctional behavior under those hypothetical conditions.
Speaker A How big a role do you believe this person could handle? And so software pops up first where.
Speaker B Their current roles are and then they start doing editing.
Speaker A They go back and forth and comparing people to people.
Speaker B After they make the first task, we.
Speaker A Ask them to look in the crystal ball. And where do you think this person could operate by career end? Not is it likely? Not will we break the glass ceiling? But could this person operate at a role of what size?
Speaker B So now we have current and age.
Speaker A 65 compared against each other.
Speaker B And then we start saying.
Speaker A Does this track, does this track, do these people.
Speaker B Look like they're going to be passed from the same mold?
Speaker A Do these people appear to have the same current potential?
Speaker B And it's an iterative discussion.
Speaker A So now you end up with your pipelines of potential.
Speaker B If at the same time you want to now say which of these people are underemployed and which of those people are innocent, we can superimpose that. All of a sudden managers eyes play.
Speaker A That begin and the folks in HR that are accountable for staffing and succession plan.
Speaker B All of a sudden things start to make sense.
Speaker A You start zeroing in on the earnings.
Speaker B Here's someone who's got current potential at.
Speaker A Mid four but is in a role that size won't match.
Speaker B Here's someone else well, mid five, but.
Speaker A He'S in a row low for this person's. Got a huge amount of headroom. Very important implication. Or you can organize by structure business unit A, business Unit B, business unit.
Speaker B C, and all of a sudden you see why business unit A is much.
Speaker A More effective than business unit B and.
Speaker B Business unit C. They're beginning to correlate very strongly.
Speaker A The medium level of effectiveness of the employees in the business should even correlate very closely with their actual business.
Speaker B Or you can look at the pipeline of effectiveness.
Speaker A And you can then what.
Speaker B Elliot calls minus the we call the.
Speaker A X factor, the experience of dysfunctional behavior. This happens to be an offshore oil drilling where they breed a lot of dysfunctional behavior. I think I'll stop at this point.
