Q&A: Ram Charan

11 Jul 2017 By Georgi Gyton

The ultimate competitive advantage of an organisation is its talent – and specifically in identifying high-potential leaders, says Ram Charan

Ram Charan is best known in the HR community for his incendiary 2014 article, ‘It’s Time to Split HR’, which sparked widespread debate in the profession.

But the Texas-based speaker and author is also one of the world’s most listened-to voices on authentic leadership. People Management spoke to him about his new book, The High-Potential Leader, and HR’s role in encouraging new leaders.

What should organisations look for when identifying high-potential leaders?

The first signifier is that, whatever they do, they are high performing – they know they must deliver. Second, they are externally oriented and have an incessant drive to search for new, high-impact ideas. They will then select the ideas that will make a difference and get them executed. It doesn’t matter what level you are in an organisation, you have this mindset and drive and a dissatisfaction with the status quo. In terms of personal characteristics, these people are innovative in their own way, they are very attuned to outside changes and they look for better people to work with. They are driven to change the company and to change the world.

Why is it beneficial to develop high-potential leaders?

The ultimate competitive advantage of a company is talent – high-potential and high-performing talent. These people might make up 2 per cent of an organisation, but have 98 per cent of the impact. They also lead others, so, even if you only have a small percentage of employees with the characteristics of high-potential leaders, their values and energy become contagious as they bring people along with them.

The companies that are going to be the most successful are those that find these people, put them in the right jobs, keep them in those jobs only up to the appropriate duration, and move them into bigger jobs, faster.

What is HR’s role in developing them?

HR is the trustee of people, therefore identifying such high-potential leaders, shepherding them, finding out what they need and making sure they are in the right jobs with the right KPIs and incentives is one of the most critical tasks HR does.

In terms of identifying these people, there should be a process in place at the recruitment stage – either an interview or a questionnaire – that enables the company to judge whether someone is a leader or an individual contributor. What have they done in previous jobs and in school to show they have continued to meet the criteria for high-potential leaders – the search, selection and implementation of new ideas?

Why are the qualities needed for tomorrow’s successful leaders different from yesterday’s?

There are a thousand leadership qualities, from ambition, integrity and motivation to being a good communicator, and these have not changed for hundreds of years. But at certain points in time – because of economic, societal, technological and political change – some qualities become more important to organisations than others. For example, five or six qualities became more dominant in the 1960s, another five in the 1970s and a different five in 2007-08 when the recession hit.

One area where leaders could improve is in leveraging the most important thing in their organisation: the people. They should be investing as much, or even more, time on employees’ selection, assignments, recruitment and development, as they do on numbers. They go over the numbers every month, but they don’t do monthly reviews of how well they are developing and managing people.

Do you stand by your comments in 2014 – that most HR leaders don’t have what it takes to be the CEO’s sounding board and that the profession should be split into strategic and operational functions?

The HR profession is progressing, but it needs to progress more to be a partner of top leaders. HR leaders need to improve their understanding of the link between the business and its people. A lot of large companies are adapting to having a strategic partner in HR, and have separated out the transactional part of the profession. Much of what traditional HR has been doing will be automated. That allows HR leaders to focus on leadership, the organisation and on building the competence of its people – where the real contribution is.

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