Leaders prefer gut instinct to metrics

When Giles Turrell took on the role of chief executive at Weetabix Food Company four years ago, he says it was “like entering the lion’s den”.

He explains: “I had to get the correct strategy and people in place for the business challenges ahead, and I knew this called for a powerful leadership team.”

Rather than analyse company data or academic knowledge of what works in the quest for the best people, he used his own “career stretch moments” to define the way ahead. “Someone took a chance on me, and I try to do the same in all my roles,” he says.

He thinks that — despite ever increasing reams of data and academic analysis — the traditional model for developing talent is broken.

Others agree. A survey by PA Consulting found that 69 per cent of chief executives prefer to allow their own career-defining moments to shape the workforce needs of their organisation, particularly when finding and nurturing future leaders.

PA came to that conclusion after interviewing 71 global chief executives about their own careers and their views about developing people.

The results make difficult reading for human resources departments and explain why so many of them struggle to implement effective strategic programmes for hiring, developing and retaining staff.

In short, company heads have lost confidence in leadership programmes, says Lesley Uren, head of PA’s talent practice and author of The Future is Fluid: CEOs’ views on their talent management challenges and PA’s response.

“It is time to rethink the role of the formal development programme and place greater emphasis on making bold appointments that give future leaders the chance to learn by doing,” she says.

It is a view that goes against that of many others. But John Holland Kaye, chief executive of Heathrow Airport Holdings, agrees, noting the importance of his own career-stretch moments.

Having spent his first 12 career years in strategy roles, he was given a very different challenge while working for a previous employer.

“It would have been easy to be typecast but Peter Swinburn, who was sales director at Bass Brewers, felt I had potential and gave me a big sales role,” he recalls. “I was never a great salesman, but put together a team who were, and I just needed to give them direction.”

Other chief executives also favour more intuitive approaches. Richard Gelfond, head of IMAX, says: “I have one metric — I am results-oriented.”

Meanwhile, Brian Harrison of furniture maker Swoon Editions says the more we rely on metrics to evaluate people, the less we rely on our intuition “and the more we avoid accepting responsibility for our own decisions”.

Others, however, strongly believe that such a personal approach is the reason behind many companies’ problems, creating blind spots, groupthink and erecting career barriers for women, ethnic minorities, less advantaged people and members of the LGBT community.

Jean Martin of CEB, the management consulting company, says making personnel decisions based on hard data makes much better business sense. “Just think of the workforce as the majority cost for an organisation,” she says. “You would not buy and operate a company machine that costly and manage it just on intuition.”

She warns: “The danger of not applying bespoke data to leadership planning is you risk replicating the career paths of those at the very top — often white males. Without careful analysis, how can you increase your competitiveness in the next five years? How can you respond to the different needs of the millennials or the boomers?”

A 2013 CEB survey found that 95 per cent of HR leaders plan to boost investment in workforce data and analytics.

Chris Martin, chief executive of food group Musgrave, believes his sector needs more than intuition: “We’re stepping into a new world, so traditional thinking is no longer acceptable. I need to make judgments and work out where the organisation needs to be.”

For him, this can only come from applying hard measures to performance. Six years ago, a company engagement survey helped identify those most committed to the business and how the company needed to change to thrive.

Data were also paramount when Musgrave bought another business, and needed to assess how people were adapting to new roles.

As with many issues, the answer lies in the balance: executives need both well-analysed data and intuition to make good decisions, including those about the development of their workforce and its future leaders.