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book excerpt

Reprinted by permission of Harvard Business Review Press. Excerpted from It's Not the How or the What but the Who. Copyright 2014. Claudio Fernandez-Araoz. All rights reserved.

The first era of people decisions lasted millennia. For thousands of years, humans made their choices about each other based on physical strength. If you wanted to erect a pyramid, dig a canal, fight a war, harvest a crop – even partner with someone to raise a family – you chose the fittest, the healthiest, the strongest you could find. These attributes were easy to assess, and, despite their growing irrelevance in today's world, we still unconsciously look for them: Fortune 500 CEOs are on average 2.5 inches taller than the average American, and the statistics on military leaders and country presidents are similar.

I was born and raised during the second era of people decisions, which emphasized intelligence, experience, and performance. By the early twentieth century, IQ – verbal, analytical, mathematical, and logical cleverness – had justifiably become an important factor in the selection process (particularly for white-collar roles), with educational pedigrees (if not tests) used as a proxy for measuring it. Much labour also became standardized and professionalized. Workers such as engineers and accountants could be certified with reliability and transparency, and since most jobs (from company to company, industry to industry, year to year) were relatively similar, we all thought past performance was the best predictor of future performance. If you were looking for an engineer or accountant, a lawyer or designer, even a CEO, you would scout out and interview the best, most experienced engineers, accountants, lawyers, designers, or CEOs.

I joined the executive search profession in the 1980s at the start of the third era of people decisions, which was driven by the competency movement still prevalent today. David McClelland's 1973 paper "Testing for Competence Rather Than for 'Intelligence' " proposed that workers, and especially managers, be evaluated on specific characteristics or skills proven to differentiate typical from outstanding performance in the roles for which they were being hired. The time was right for such thinking because technological evolution and industry convergence had made jobs much more complex and unique, often rendering experience and performance in previous positions irrelevant. So instead, we started decomposing work into competencies and looking for candidates with the right combination of intelligence, skills, and other attributes to match. For leadership roles, research also began to show the importance of emotional intelligence over IQ.

I believe we're now witnessing the dawn of a fourth era of people decisions, in which the focus is rapidly shifting to potential, or our ability to grow and adapt to fundamentally different and increasingly complex responsibilities. Geopolitics, business, industries, and jobs are changing so rapidly that we can't predict the competencies needed to succeed even a few years out. It is therefore imperative to identify and develop those with a strong motivation to be the best they can be and contribute to something larger than themselves; an insatiable curiosity that propels them to explore new avenues and ideas; keen insight that allows them to see connections where others don't; a high level engagement with their work and the people around them; and the determination to overcome setbacks and obstacles. (That doesn't mean forgetting about factors like intelligence, experience, performance, and specific competencies, particularly the ones related to leadership; but potential should now be higher on your priority list.)

Potential is, of course, much harder to gauge than all those other attributes. And it can be harder to find, not least because of the "other GDP" factors causing talent pools to shrink. But when you are deliberate about looking for it, determined to overcome all the obstacles your brain, education, organization, and society put in your way, energetic about developing and leading the talent you've identified, smart about putting the right mix of teammates together, and willing to bring this rigor to every people decision you make in every realm of your life, you will put yourself at a huge advantage. Not only will you be able to identify and surround yourself with the best, you'll also be able to bring out the best in them, in yourself, in your organization, and in your world.

So let me end this book with a call to action. Your quest going forward is to consider everyone around you with fresh eyes, to tirelessly search for and diligently nurture potential, and to enthusiastically direct those with whom you've surrounded yourself toward collective greatness. This is the surest path toward personal and professional fulfillment and prosperity.

Claudio Fernandez-Araoz is a senior consultant with global executive search firm Egon Zehnder.

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