What Predicts Leadership Potential?

Predicting leadership potential is becoming more critical with the anticipated post-pandemic economic growth, significant labor shortages, and continued acceleration of digital transformation. Due to these trends, the employees who you hire now will probably have to grow with your company quickly. Similarly, the jobs you’re hiring, for now, may look very different in a couple of years as digitalization and automation take over. Furthermore, the current labor shortages may force you to promote your existing employees into management much sooner than anticipated. In today’s post-pandemic climate, accurately predicting leadership potential can create a competitive advantage for your organization.

The Problem with Predicting Potential

Perhaps the biggest problem with predicting potential lies in the concept itself – how do you define potential and measure it? The most common approach is to understand Potential as a subjective assessment from management and count it as a potential rating (high – medium – low) on a 9-box. However, managerial ratings of Potential are full of unconscious bias, such that women and racial minorities tend to receive lower scores. Any predictive model of such a biased measure of potential risks inaccurate prediction and adverse impact.

At Pinsight, we think that there is a better and more objective way to measure leadership potential – we call it Career Advancement. Career Advancement is the speed with which employees move up through the ranks to more strategic leadership roles. So, for example, a person who reached a C-suite strategic role at a younger age is understood to have higher Potential than a person who reaches the same level of position at an older age.

What Predicts Leadership Potential?

Like other research, we found that combining two predictors successfully predicted leadership potential: learning orientation and learning aptitude. Learning orientation refers to one’s attitude and approach to learning. High scorers tend to be more curious, open to change, and they usually enjoy solving problems. They also approach learning more methodically and diligently, usually with a well-thought-out plan. Low scorers tend to be less curious and struggle learning with less structure. 

Learning aptitude refers to the natural ability to learn. High scorers quickly recognize patterns, absorb new information, and apply it to their jobs. Low scorers may require more time identifying patterns and absorbing further information. Therefore, they may prefer roles where they have time to process new information and learn at their own pace.

How well does Pinsight’s measure of Potential predict important employment outcomes?

According to the U.S. Department of Labor Employer’s Guide to Good Practices, validity coefficients above .35 are considered very beneficial.

Not only does the combination of Learning Orientation and Learning Aptitude predict career advancement, but it also predicts job performance and job engagement. That means that high scorers on Pinsight’s measures not only show more Potential to move into leadership roles, they also tend to be stronger performers and more engaged employees. Additionally, Pinsight’s estimate of potential doesn’t show significant group differences, so it isn’t very likely to adversely impact. Our analyses of over 2,500 participants have confirmed this.

These are the People You Want

For your next hire, promotion, or talent review, consider bringing in Pinsight’s leadership assessment and get an objective read of your future or current employees’ Potential. The people who learn quickly and approach learning with curiosity, openness, and structure move up faster through the ranks into higher and more strategic leadership roles. And these are the people you want in the post-pandemic world when the economy is expected to grow, labor markets are tight, and digital transformation continues to accelerate.

Learn more about Pinsight’s assessments for leadership potential.