Benefits and Compensation

Looking for Great Talent? Look for Potential

Fernández-Aráoz says that potential is the fourth era of talent spotting. Here are the previous three:

  1. Physical attributes. For thousands of years, people looked for the biggest, strongest, and healthiest people who could handle the physical aspects that most jobs required.
  2. Intelligence, experience, and past performance. For much of the 20th century, education and experience were in vogue as the growth in white-collar jobs demanded a new type of worker.
  3. Competency-based hiring. This is still the primary way used to spot talent today. Employers test employees for specific characteristics that can help predict performance on the job.

Beginning the Fourth Era

According to Fernández-Aráoz, we now are at the beginning of the fourth era in talent spotting, and our attention “must” shift to finding people who possess potential. The rationale for his thesis is that the world is changing so fast that competencies can become obsolete, rendering a great talent suddenly useless.

In some cases that might be true, but it also depends on what type of characteristics you’re testing potential job candidates for. Test for the right competencies, and you’ll be able to discover which candidates possess the most potential. If you test only for specific competencies that allow a person to fill a certain role and that role becomes obsolete, the competencies might be irrelevant.


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But let’s allow Fernández-Aráoz to make his case. In the article, he explains that potential is, indeed, more difficult to identify than competencies. And there are three factors that are making it more difficult to hire enough of the best and the brightest:

  • Increased globalization. This has created more competition for employees. International companies now routinely reach into the United States to hire workers, when they used to be more limited in their choices.
  • Good old demographics. There are fewer people to choose from who are rising through the ranks than we had with the Baby Boomers.
  • Failure to develop. Companies aren’t developing their own future leaders. This might have to do with the mobility of today’s worker, but employers aren’t making the effort to develop the next generation of leaders.

All of that means there is an increasing demand for talented people. This is where Fernández-Aráoz’s argument comes in. In a world where the demand for qualified leaders outpaces the supply, managers must become really good at spotting potential. And once you’ve spotted it, you must keep those who have it and invest in them to make sure they reach their full potential.

So How Do You Spot Potential?

According to Fernández-Aráoz, here’s what you look for:

  • Motivation. Fernández-Aráoz is very specific here. It must be the right kind of motivation, which he describes as “a fierce commitment to excel in the pursuit of unselfish goals.” The key is being unselfish. A person who is driven for purely selfish reasons probably won’t change and isn’t well suited for a leadership position.
  • Curiosity. You want to hire people who are constantly looking for new knowledge, ideas, and experiences to improve themselves. This allows them to learn, adapt, and change with an ever-evolving world.
  • Insight. The ability to gather and process data to make informed, forward-thinking decisions is a critical skill for a person with potential.

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  • Engagement. A person must have not just personal engagement but also the ability to communicate a vision that allows others to become engaged with the purpose and the leader. This requires a certain emotional intelligence that, when coupled with logic, can elicit real followership in others.
  • Determination. Those with potential set high goals and then do what’s necessary to reach them. They know how to fight for what they want, and even when they fall short of their goals, they don’t give up. They figure out how to keep on fighting to reach them.

I’m not sure that trying to determine potential in our employees really represents a new era in spotting talent, but I can’t argue with the five characteristics Fernández-Aráoz lays out for determining which candidates possess it. As managers, each of us should be looking for people inside and outside our organizations who possess great potential.

Strong leaders understand that if they don’t surround themselves with others who have potential, they themselves will be limited in what they can achieve. How many people who work for you possess the potential to replace you? Answering that question is a great place to start in your search for talent.