3 Tips for Breaking Bias in Succession Planning

In recent weeks, former Disney CEO Bob Iger returned to his post; Katrina Lake, Stitch Fix’s founder and former CEO did the same. This begs the question: what went wrong? Succession planning is arguably the most consequential activity in organizational life.

Organizations with good leadership outwit competitors and motivate cooperation to achieve goals. Conversely, bad leaders create toxic cultures and have poor judgment, like the narcissistic leader who breeds self-centeredness and makes poor judgments based on their own delusions. In every case, from Alexander the Great’s conquests to the transformative leadership of Satya Nadella at Microsoft, to the psychopathy of Elizabeth Holmes to the hedonism of Adam Neumann, leadership determines the fate of organizations.

So, how does leadership failure happen over and over again? Why are humans – including people in organizations – unable to spot good leadership? Choosing good leaders goes against human nature because the mind is stuck in the past. Meaning that poor leader selection is a symptom of an old mind weighed down by “the dead hand of the past,” a psychological glitch that reinforces bad leadership by choosing socially aggressive charismatics, regardless of their decision-making and ability to galvanize people toward a vision, goals, and objectives. Fortune favors the bold, so they say because these individuals achieve power. But, often, organizations have no fortune because charismatic narcissists achieve power and then run organizations into the ground.

Given that selecting leaders goes against human intuition, how can talent management overcome these biases to position their company for the future? Here are three suggestions:

Create strong values for rationality and fairness. High-performing C-level execs, boards, and organizations place objective truth and scientific knowledge over tribalism and self-serving ideologies. They care about rational, data-supported arguments that minimize bad ideas delivered with a silk tongue.

As Steven Pinker noted in his book Enlightenment Now, reason is the bright side of humanity that has given us the sum of human knowledge in our pockets, unrivaled access to food and clean water, the highest rates of literacy ever seen, the lowest rates of violence in human history, and the eradication of disease. Being data-driven when choosing the next best leader wins every time.

High-performing organizations also use cognitive diversity to canvas the full spectrum of ideas, allowing them to make good judgments in a volatile and uncertain world. They care about fairness, equity, and merit and therefore create cultures of competence instead of power politics. These groups not only perform better now, but they position themselves for the future as society becomes more and more boundaryless, diverse, and inclusive.

Use cutting-edge assessments to choose the best leader. Not a lot has changed in leader assessment over the last 50 years. A leader evaluated at Sears in the 1980s would recognize how organizations assess leaders today. They use resumes, personality surveys, cognitive ability tests, and manager nominations. But resumes are filled with exaggerations and poor predictors; personality surveys are not situated in a business context; intelligence tests discriminate and don’t predict well; and manager nominations are a political activity unrelated to leadership effectiveness.

The good news is this: AI-infused assessments powered by machine learning overcome these drawbacks. Resumes can be quantitatively analyzed rather than reviewed by a person. Personality surveys can be part of the assessment but supplemented with simulations and games that evaluate real-world skills. Intelligence tests can be situated in a business context, asking executives to make investment or people decisions like they do on the job. And manager nominations should not be used. Managers observe political skill; direct reports observe leadership.

Organize insights to scale succession planning. Organizations still use PowerPoint and Excel to manage succession plans because very few technologies focus on succession planning. HR technologies are spread thin with modules for benefits, recruiting, payroll, employee experience, performance management, and other activities. Organizations need a straightforward platform for succession planning because it scales talent planning across the organization and debiases leader identification at lower levels.

Here are questions to ensure you get the most from your succession planning technology:

• Does it integrate with your current HR technology?
• Does it match leaders with roles?
• Does it have a built-in executive assessment so your data is easily used for individual and group insights?
• Is it quick to set up and implement without consultants?
• Does it allow you to uncover hidden potential across the entire enterprise?
• Can it be used in a talent calibration meeting?

The world is moving to value-creating, decentralized systems where organizations are run by networks of people instead of a small group at the top with economic and hierarchical power. This is the greatest transformation of our time and goes against our old cognitive architecture trapped in the past, where humans organized in strict hierarchies and made decisions based on politics and ideology. To win in today’s world, organizations must create cultures of science and fairness, use predictive insights to decide who should lead, and leverage technology to talent plan at scale.