The future of work is here. It is fast-paced, complex, agile, digital and demands organizations be innovative, inclusive and purpose-driven. Chief learning officers play a crucial role in this new reality: identifying and nurturing employee potential.

Three key trends characterize this new business landscape:

The emergence of new business models. The era of professional managers in traditional hierarchies is over; a 20-year-old with a computer and an idea can build a multibillion-dollar company. Large iconic businesses of the past struggle to adapt while nimble start-ups respond quickly to new data or fresh opportunities. Sizable organizations are adopting agile methodologies in nondigital functions in an attempt to remain competitive. Self-assembling, self-organizing teams centered around key objectives are the new norm.

The growth of a gig economy and outsourcing. Organizations are choosing to outsource or partner rather than build their own core assets, meaning a large part of the organization consists of nonsalaried workers. A new generation of talent has a very different expectation of what work should be. Loyalty to one company is not just decreasing, it is an unreasonable request of a cohort that believes their lives will be worse than those of generations that have come before them. Millennials and their successors are coming to employers with an increased awareness of how stress impacts their health, a better sense of what gives them purpose and meaning, and a belief that businesses are about more than financial performance.

Technology is everywhere. Terms such as artificial intelligence, machine learning and predictive analytics have become part of our vernacular and experience (Amazon knows what you want to buy before you do). The technology function is no longer just the place to go when computers and tablets are not working; it has a significant voice in how organizations should respond to issues in all areas of the business. IT has firmly taken its seat in the boardroom along with the creation of new C-suite roles such as chief digital officer. With technology comes data. Sixty-nine percent of organizations now have a people analytics function with the ambition to provide ground-breaking analytics that generate sizeable shifts in a variety of workplace issues.

What does this mean for CLOs?

Having the right leadership in place is crucial to ensuring that businesses are equipped to cope with these shifts. CLOs are the architects and gatekeepers of the processes used to ensure the right leadership talent is identified, nurtured and deployed to help businesses thrive in this new world.

Performance Versus Potential

There is a longstanding debate about whether organizations should focus on managing performance or identifying potential. The former tends to be context-dependent and retrospective whereas the latter is independent of context and future-focused. Given the extent and pace of change businesses are facing, there is an argument to be made that focusing on an individual’s potential is more important than managing performance. Many technology and professional service firms have ditched the typical annual review cycle in recognition of a growing belief that its focus on the past and often administrative-heavy, arduous processes leave little space or energy for identifying and building talent for the future. The impact is empty succession plans, disengaged talent and an over-reliance on external recruiting.

However, identifying potential in people is not as easy as it sounds. Line managers have very mixed ideas of what constitutes potential and frequently have difficulty articulating those ideas as observable behaviors. Organizations faced with this issue often adopt models of potential to help their people understand what identifiable underlying traits or qualities will predict future capability and success. The model of potential we developed at YSC Consulting, for example, assesses a leader’s talent through the developable psychological characteristics of judgement, drive and influence. These types of models can help create a common language for organizations to measure potential and solve a range of talent challenges.

Even with the rise of technology, people become more important, not less. Replacing humans is not the aim. Giving them tools to help them make better decisions, be more productive and be more engaged is the objective. Organizations must find and keep the talent they need now and in the future. This means engaging employees in the right way and developing talent through learning and development in line with the ever-changing demands of the business context. Following are a few practical tips for how CLOs can utilize talent profiles derived from a potential model to deliver on these objectives.

Build Clarity Around Future-Leading Skills

Some leadership qualities are going to be more important in the future than others, and we believe there are nine skills in particular that can predict a leader’s future success.

Organizations should map out exactly the roles required to deliver the business strategy. For each role, identify the specific qualities that will enable success in that role. Organizations are then clear on the talent they need to find, either internally or externally, to ensure they are readying the business to deliver in the future.

Use Talent Profiles to Inform Team Composition and Development

Utilizing talent profiles when creating teams can help organizations understand the relative strengths and weaknesses of a specific team. With this data, it is possible to put a team effectiveness strategy in place that accelerates the performance of the team, thereby ensuring that the business benefits from teams can reach peak effectiveness much faster.

Embrace Data and Predictive Analytics

Technology enables businesses to scale like never before and gain greater insight into people across all parts of an organization. By mapping data on individuals against a model of potential framework and combining this with information on engagement and individual needs, it is possible for organizations to understand what they need to do to inspire and develop each person. Viewed in aggregate, this data can give insight into the relative strength of talent in differing functions or levels of the business and whether there are key areas for development that should be tackled on a programmatic level. Also, when combined with organizational data, it is possible to understand what leads to success in the organization and whether that is likely to be supportive or inhibitive of the business strategy. Organizations may discover that behaviors valued and promoted within the business are in direct opposition to those objectively needed to evolve.

Ultimately, the data demonstrates that seeing talent through the lens of potential is more beneficial to the business due to the extent of change it is operating within. Specific elements of potential, such as resilience, the ability to learn, and the ability to adapt and evolve, are especially important when finding future-fit talent.

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