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Why You Should Hire for Potential, Not Experience.


When you’re hiring, look past the experience candidates come with, to the potential for them to grow into the perfect fit for your company.

An electronics retailer hires a CEO who seems to possess the ideal credentials and skills, only to find him ill-prepared to handle changing market dynamics.

A small brewery, in contrast, picks a project manager lacking in relevant industry experience, based on a hiring consultant’s feeling that the man will succeed. The new hire quickly ascends to a key role in a strong management team that turns the company into a conglomerate.

What’s the difference in the two hires?

Potential–specifically, “the ability to adapt to and grow into increasingly complex roles and environments”–says executive search adviser Claudio Fernández-Aráoz, who was involved with both scenarios. This type of potential is the hallmark of likely success, he says in a recent Harvard Business Review article based on his book, It’s Not the How or the What but the Who.

“Having spent 30 years evaluating and tracking executives and studying the factors in their performance, I now consider potential to be the most important predictor of success at all levels, from junior management to the C-suite and the board,” Fernández-Aráoz writes.

“As business becomes more volatile and complex, and the global market for top professionals gets tighter, I am convinced that organizations and their leaders must transition to what I think of as a new era of talent spotting–one in which our evaluations of one another are based not on brawn, brains, experience, or competencies, but on potential,” he says.

For the past few decades, employers have focused on competence, breaking down jobs into “competencies” and seeking candidates with the right blend of them, according to Fernández-Aráoz, senior adviser at executive search firm Egon Zehnder. Competency-based hiring, however, is becoming insufficient in “a volatile, uncertain, complex, and ambiguous environment,” he says.

“The question is not whether your company’s employees and leaders have the right skills; it’s whether they have the potential to learn new ones.”

HOW TO HIRE FOR POTENTIAL

While it’s easier to measure past performance, it’s also possible to evaluate potential, he says. Zehnder looks for indicators such as the right kind of motivation: great ambition to leave a mark in the pursuit of greater, unselfish goals. “High potentials … show deep personal humility and invest in getting better at everything they do,” he says.

Four other hallmarks of potential, he adds, are curiosity, insight, engagement, and determination.

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