Since the 1997 publication of McKinsey’s War for Talent study, leaders of corporations have increasingly recognized the importance of talent to their firm’s success. For the past seven years, our HR@Moore Survey of Chief HR Officers has asked about the CEO’s top two-to-three priorities for the HR function. Every year talent, in one form or another (e.g., talent, talent management, succession, leadership development, etc.) tops the list of priorities. Clearly, talent has emerged as one of the pressing priorities for firms.
One area in which firms differ deals with who they consider “talent.” Some firms define talent as the high potentials that will evolve into the next generation of the firm’s leaders. Others consider talent as the scientists or innovators who will discover the next generation of products and services. Finally, some broadly consider as talent any individual who can have an important impact on the firm’s success. While different firms define talent differently, to me the bigger issue is defining what truly comprises someone who should be considered talent.
In my experience, firms too often focus on the performance or potential of individuals and tend to overlook or even ignore their character. The Center for Executive Succession just completed a study interviewing 23 board members regarding their experiences with CEO succession. These 23 members had been part of over 90 CEO successions, and they reported that approximately 30% of them were judged to be failures. While the focus of the study was not on the cause of the failures (but rather the reasons the boards picked someone who ultimately failed), three causes of failure began to emerge from the discussions. First, they described CEOs who seemed to display far more arrogance than humility. Second, these failed CEOs tended to ignore feedback, rather than seek it out. Finally, they tended to be focused much more on their own personal outcomes in terms of money and status than in the outcomes for the larger organization.
Interestingly, some of the board members who were part of the process that resulted in such failed CEOs noted that they had seen those dysfunctional behaviors BEFORE they decided to promote or hire the individual. However, the belief was that the board could put enough external controls in place to keep these behaviors from derailing the individual and the firm while being able to capture the value that came from the “talent” these individuals possessed. They admitted they had been wrong.
I have always had reservations regarding very “talented” leaders who seemed to be rather narcissistic or opportunistic. It seemed to me that they might be able to successfully lead organizations in the short term, but that sooner or later these characteristics would result in failure for both the leaders and the organizations they lead. While I am sure that some very successful leaders may not be described as having great character, I am increasingly convinced that ignoring character in favor of “talent” may be making a dangerous bet.
Read more 2017 talent predictions by other thought leaders.