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Why isn’t talent management built on data?

June 21, 2023 | Hanover Team

Moneyball and leadership: winning against the odds

The
film Moneyball depicts characters who, against all odds, take a data-driven
approach to putting together a competitive baseball team on a shoestring
budget. And, of course, the team they put together wins.

 

If
data can be such a game-changer in baseball, where a bat, a ball, and athletic
prowess are the playing cards, how much more impactful could it be in business,
where the stakes are infinitely higher? 

 

It
certainly gives you pause for thought, but many businesses still don’t
consistently leverage data in making critical talent management decisions.

The traditional approach to leadership hiring

Historically,
companies have made leadership recruitment and talent decisions based on things
like past performance, gut feel and existing relationships. This approach,
though seemingly intuitive, falls short on several fronts. A Harvard Business
Review article highlights the limitations of the typical
“intuition-based approach” and emphasises the need for an
evidence-based decision-making process.

 

One
limitation of these traditional methods of hiring and promoting into senior
leadership positions is that they are prone to conscious and unconscious bias. According to one study, 85-97% of professionals rely
to some degree on intuition or a mental synthesis of information when making
assessments of people. 

 

Unreliable
management decisions can easily become the norm, and the detrimental
consequences of such bias ripple through the organisation, affecting
engagement, productivity and profitability. Combined, these factors can risk an
increased staff churn, affecting retention rates and overall work culture.

 

Despite
the evidence against this approach – an HBR analysis
found that a simple equation outperforms human decisions in applicant
evaluations by at least 25% – many companies persist in it due to the perceived
complexity of data-driven methodologies or plain inertia.

The case for data-driven talent management at
senior level

Embracing
a data-driven approach in the recruitment and talent management process offers
multiple benefits. At its core, it eliminates the bias and internal politics
that can influence promotions or new hires. This fosters an environment of
fairness and transparency, leading to better decisions and better staff morale.
It also provides impartial feedback, allowing companies to make informed,
objective decisions, and, in turn, this also supports robust succession planning.

 

An
essential aspect of data-driven recruitment is its role in fostering a diverse workforce, especially at leadership
levels. As organisations globally strive to build more inclusive
work cultures, data can serve as an impartial arbitrator, ensuring that all
potential candidates are assessed on their merits rather than any
discriminatory factors. With a diverse leadership team at the top, the trickle
down effect can be enormous.

 

But
data-driven decisions do more than just assess current performance or look at a
snapshot of where an individual is right now. They predict potential capability
as well as simply evaluating current capability. This aspect is
especially crucial when promoting internally, as it ensures the best fit for a
role based on the employee’s potential to grow, adapt and deliver results.

How Hanover can help

At
Hanover, we understand the critical need for data-driven decision-making in the
talent management process. We conduct comprehensive leadership assessments covering both personality and
behaviour because we know that leadership, though seemingly intangible, can be
quantified into measurable data.

 

This
process involves defining the behaviours that are most critical for a role or
leadership level. We then take individuals through a psychometric evaluation
followed by an in-depth  interview. This enables us to look for consistent
evidence of the key behaviours and assess an individual’s leadership capability
and potential.

 

Adopting
this rigorous, data-driven approach helps businesses quantify performance and
potential, manage risk and engage people in a meaningful way. It empowers
businesses to make the right decisions and build stronger, more effective leadership teams.

 

I
believe that companies must shift from an intuition-based approach to a
data-driven one for leadership hires and other critical talent decisions. And
just as in Moneyball, we can use data to get powerful insights that lead to
more effective and robust decision-making, particularly when the stakes are
high. 


Contact us

today to find out more about data-driven talent management  and how we can
help you to select and develop high-performing leaders and teams.