By Mike Hoban
What if your company’s rigorous, high profile and well funded talent management system had only a 50% success rate in predicting whether your top five managers—the VERY best in the company—would perform well at the next level up? Well, whoever was in charge of such a system, where predictability is no better than the flip of a coin, would probably be looking for another line of work. Yet, that’s the success rate for one of the most followed and most vaunted talent management systems in the public eye: the NFL draft.
Last June, in this very blogspace, I wrote a piece about the high failure rate of highly drafted college basketball players and the difficulty the professional scouts have in accurately assessing potential for success at the next level up (the pros). Because of some new academic research, we now know that the performance vs. potential conundrum in athletics is not limited to the world of basketball.
Last week, the National Football League held its annual draft drama, where college football players are selected by teams according to their talents. It would seem to be the pinnacle of meritocracy and like in basketball, literally millions of dollars are spent by the professional teams in analyzing and scrutinizing the talent at the collegiate level. Some of the top players have been under the talent scouts’ microscopes since they were in high school.
Yet, all of that due diligence apparently doesn’t pay off for teams. An article in the Wall Street Journal last week described a study conducted by a Yale University School of Management professor which concluded that in the period 1991 – 2004, fully half of the top five drafts (70 players) were either disappointments or actual flops in the professional league. And we’re talking about big money and big stakes here - last year’s top five players in the draft got $168 million in guaranteed money. The shape of the balls might be different in the NBA and the NFL, but the success patterns for star players are nearly the same.
Interesting statistics, but what’s the learning point for those of us not in the world of professional athletics? That replacement planning or succession management doesn’t work and is therefore not worth doing, since the professional talent scouts with their data bases, game films and personal observations don’t get it right any more than random chance?
No, good readers, that is definitely not the leaning point about this news story. While there are several reasons why the “can’t miss” college players often do “miss” at the next level up, I think there are some important differences in the organizational world which explain why corporate efforts at succession management have a higher success rate.
Let’s say “Mary” is a senior executive who is considered a potential successor to the CEO position. Mary’s development plan to make her more “ready” likely includes activities and assignments which give her exposure and experience in CEO-like situations. An important board presentation. A key role in leading the strategic planning session for all of the senior leaders. Leading a high profile turnaround situation. An interview with a national business magazine, perhaps.
Experiences and exposure like that provide the current CEO and the board with information and insights about whether Mary does indeed have the right stuff to become CEO at some point. But there is no equivalent of those “CEO work samples” which can be applied to professional athletics. A hotshot college quarterback can’t play a few sets of downs in the NFL to prove he’s got the goods. And there’s no flight simulator equivalent to indicate how he would perform at the professional level.
All the collegiate all-stars can do for the scouts and the owners is to demonstrate their skills at the same (collegiate) level, again and again. That provides information but it’s not the same as playing in professional game conditions against professional competition, something that aspiring CEO Mary can better approximate in her performance trials. And that means athletes will continue to be judged more on performance (same level) rather than on potential (next level up), because that’s all the data that can be obtained. That makes it more difficult to gauge talent trajectory.
So that’s why the NFL and NBA will continue to rely as much on serendipity as on data-driven judgment: They make draft decisions based more on performance than on potential. And as a result they’ll continue to drop the ball often with regards to talent.
Make sure your organization works the performance/potential issue effectively in order to minimize your talent fumbles.
Mike Hoban is a senior consultant for Development Dimensions International (DDI).
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