Redefining Executive Potential: The New Paradigm for Identifying and Developing Future-Ready Leaders

February 10, 2025 – Selecting and developing successful leaders has never been easy. But today, the cost of identifying the wrong leader is rapidly increasing, as complex economic, talent, technology, and geopolitical changes seed uncertainty across the global business environment, according to a recent report from Russell Reynolds Associates. Research published in Harvard Business Review shows that excessive leadership turnover at the top destroys significant value—close to $1 trillion a year among the S&P 1500 alone. Strong executives can be the difference between becoming a market leader in a fast-changing, dynamic landscape, or falling out of step with the change curve and losing market share.

In this tumultuous, high-stakes environment, how can organizations identify leaders who are both adept at predicting and preparing for change and keeping their organization steady through the day-to-day? By measuring the executive potential of their leaders at the top, the Russell Reynolds report explained.

While existing assessment models successfully identify rising talent, they have been less effective at differentiating leaders who are already succeeding at the executive level. To help organizations understand the best predictors of success among leadership teams within this changing business context, Russell Reynolds Associates created Leadership Portrait.

Built upon years of proprietary research, the Leadership Portrait model encompasses an executive’s readiness to meet immediate challenges—their relevant experience and leadership competencies—as well as their future potential—their growth factors and their ability to realize their full potential. While Russell Reynolds has leveraged relevant experience, competencies, and growth factors in executive assessment and development for years, the addition of potential realization has evolved our understanding of organizations’ senior most leaders.

Global organizations spend more than $60 billion annually on leadership development programs. But the returns on these investments for leaders and their teams are not always clear. This expansion of Russell Reynolds’ leadership assessment and development approach aims to help organizations identify executives with the agility to stay in front of the change curve, the self-possession to accelerate their own learning in the face of uncertainty, and the vision to lead enterprise-wide transformation.

What’s Different Now?

“Identifying high potentials gained significant traction in the 1970s, as industrial psychologists, management consultants, and human resources practitioners developed a host of theories and models to help businesses spot rising talent,” the Russell Reynolds report said. “Then, in the early 2000s, these models evolved to measure growth potential factors, aiming to identify those most likely to “close the gap” between their current abilities and more senior level demands. Though business conditions have changed considerably over the past decades, the predictors of high potential have remained remarkably consistent—including learning from experience; navigating novelty, ambiguity, and complexity; demonstrating persistence and resilience in the face of challenges; and building strong, collaborative relationships and teams. These well-researched qualities are typically seen as predictors of someone’s ability to ascend the leadership ladder and step into increasingly demanding roles.”

Yet while these models have been helpful in identifying rising talent and developing future leaders, they have been less effective at differentiating leaders who are already succeeding at the executive level, according to the Russell Reynolds report. “Organizations now face pressure to identify sitting senior executives who can stay in front of their own learning curve and effectively lead through organizational transformation,” it said. “Yet the qualities that differentiate future-focused, transformational senior executives from their less change-ready peers have not been clearly delineated or systematically measured, and very few organizations know how to define, justify, or support a selection decision to meet these criteria.”

Related: How to Maintain Remote Employee Engagement

Evolving from traditional potential measurements to a more nuanced, fluid understanding of executive potential requires a fundamental paradigm shift that looks beyond past achievements and current competence to gauge a range of progressively less-tangible factors that accelerate or hinder an executive’s ability to flourish in an ever-evolving leadership landscape, the Russell Reynolds report explained. “Because the qualities that unlock an executive’s full potential are multi-faceted, layered, and often deeply personal, we no longer view potential as static or innate,” the study said. “Rather, a leader’s potential is dynamic and evolving, influenced by a variety of factors. Where traditional trait-based potential models deemphasized the role of development, our model identifies clear developmental pathways for unlocking a leader’s capacity to thrive through change, and creates dialogue around purpose, meaning, and self-alignment to drive sustainable career choices.”

7 Things CEOs Must Do to Boost Team Performance

In today’s rapidly evolving business environment, a CEO’s ability to enhance team performance is more critical than ever. It’s no longer just about setting goals—it’s about inspiring teams to surpass them through visionary leadership, clear communication, and a strong organizational culture. According to a recent report from The Taplow Group, here are seven essential strategies every CEO should implement to drive their team toward exceptional results.

The key paradigm shift: Making it to the top job is not the realization of potential. As the world grows more complicated, roles will continually change, and the bar will continually reset. As such, potential realization is an ongoing journey that even the most senior executives must contend with as the context and challenges around them change.

Understanding Executives’ Readiness

Two factors inform an executive’s current readiness for a top job: relevant experience and leadership competencies. Russell Reynolds assesses these factors every day. A leader’s relevant experience is self-explanatory—our leadership experts evaluate a candidate’s career history, notable achievements, and leadership experience to intuit whether they can fulfill the job specification.

Related: Creating a Positive Corporate Culture for Employee Engagement

Through years of collective research, the firm has uncovered that the most successful senior executives are able to strike a critical balance between two kinds of change-readiness that predict potential—growth factors and potential realization.

Growth factors

Which continue to be established and deeply meaningful measures of leadership potential—include:

• Systems Thinking: These leaders think systemically, operating well with complexity and ambiguity.
• Curiosity and Adaptability: These leaders are highly curious students of the world, constantly learning, adapting, and evolving.
• Drive and Resilience: These leaders are ambitious, tenacious and driven, displaying high levels of resiliency and sustainability in how they operate.
• Social Intelligence: These leaders are interpersonally attuned, insightful and mindful; successful with a range of stakeholders.

Potential Realization

The new component of Russell Reynolds assessment approach—embodies the following three elements:

1. Self-knowledge: These leaders display insight around both their strengths and limitations. This involves realistic expectations for the role, a high level of awareness about how to manage one’s potential derailers, and where one is on their own development path. This also requires a high degree of attunement to the conditions in which one is likely to thrive and grow.

2. Values and aspirations: Leaders who experience long-term success display a high degree of clarity around their personal values, motivations, and ambitions. They have a personal set of morals, principles, and non-negotiables that underlie their decisions and actions, effectively balancing principles with pragmatism, setting clear priorities, and making mindful compromises where appropriate.

3. Wider impact and legacy: These leaders can look beyond themselves, offering a well-articulated view of their professional purpose and desired impact on the wider ecosystem (including their teams, organization, industry, society, and the world). They are cognizant of the long-term impact of their leadership and can clearly articulate the steps they are taking now to shape their legacy.

While leaders may index more on growth factors or potential realization, the two are intrinsically intertwined, according to the Russell Reynolds report. “If growth factors indicate the height of an individual’s ceiling, potential realization is the sturdiness of the supporting walls,” it said. “To be sure, executives should not be expected to display all these markers simultaneously. Rather, a mark of sound judgment is a leader’s ability to leverage the right approach at the right time. For example, early in an organization’s transformational journey, executives may demonstrate agility, place big bets, and push their team towards innovation. As the journey continues, leaders may be more effective when demonstrating patience and aligning their team around core values and long-term purpose to sustain them through stress, turmoil, and setbacks.”

The Russell Reynolds report concludes by stating that decisions around executive leadership placements and transitions rely on a close evaluation of an executive’s readiness and fit for a specific role. “However, as the speed of change accelerates and leadership context becomes more complex, it is no longer sufficient to look at a leader’s readiness for a role in the short-term,” the search firm said. “Instead, organizations need to understand a leader’s ability to adapt, flex and grow along with their role, to hold on to a sense of direction amidst setbacks, and to operate effectively in first-time conditions. Thriving in that unknown future will require a strong learning orientation, resilience, and emotional intelligence. It will also require leaders who are deeply connected to the why behind their actions and decisions; leaders who take an honest, insightful approach to their own growth path; and leaders who understand the legacy and impact their leadership will leave behind.”

Related: How to Maintain Remote Employee Engagement

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor – Hunt Scanlon Media