The future of an organization depends heavily on the quality of its leadership. Yet many high-potential programs rely on current performance instead of actual leadership potential. The problem: according to field studies such as those by Zenger & Folkman from 2017, 40% of participants in such programs turn out to be below-average leaders. Since a CEO can influence up to 55% of company value, wrong appointments can cause enormous financial and cultural damage.
The decisive difference lies between performance and potential. Performance describes how well someone acts in their current role – often shaped by subjective evaluations, interviews, or internal networks. Potential, on the other hand, shows how suitable someone is for greater responsibility, based on measurable personality traits, values, and abilities.
Additionally, a distinction must be made between emergent and effective leadership. Emergent Leaders appear charismatic, rise quickly, and seem leadership-strong. Effective Leaders, however, build high-performing teams and motivate people to achieve shared goals – a central success factor, since leaders strongly influence employee retention and thus productivity and business results.
To correctly identify future leaders, organizations should measure potential systematically and objectively. Scientifically grounded personality assessments can help evaluate traits such as team orientation, learning ability, resilience, and strategic thinking. Successful leaders are particularly characterized by self-reflection, willingness to learn, and the ability to develop others.
Given increasing top-management turnover and declining willingness among young professionals to take on leadership roles, a strong pipeline of future leaders is becoming more important. Companies that identify and develop potential in a targeted way secure better leadership in the long term – and therefore sustainable success.
As an expert in psychological personality diagnostics, RELEVANT offers effective, scientifically grounded measures that support leaders in their targeted development. Learn more now.
This post is based on an article originally published in the Hogan Assessments Blog.
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Dr. René Kusch
