The concepts of meritocracy and diversity are sometimes perceived as being at odds with one another. Some people believe that a focus on merit is not inclusive, nor does it achieve diversity, while others feel that D&I initiatives dilute merit-based decisions. This thinking has created divisions between those who have supported D&I efforts and those who question it.

But what if we could improve meritocracy and unlock real, sustainable diversity and inclusion?

One of the ways we can improve both meritocracy AND diversity and inclusion is to proactively spot and develop your hidden talent in your organisation.

From experience and from what I have heard from people in organisations, some of the best talent, including leadership talent, is hidden in plain sight.

In appointing people into leadership roles, we’ve long assumed confidence equals competence—a dangerous assumption given studies show the overlap of confidence and competence to be only 9%!

As Dr. Tomas Chamorro-Premuzic highlights in his research, people who emerge as leaders are not always those who excel at leading. Dr. Martin Guttman also suggests that the best leaders may be the reluctant leaders.

If we’re serious about merit, we need to close the gap between leadership emergence (who gets promoted) and leadership effectiveness (who leads well) by deliberately searching for hidden talent.

People who are overlooked may be the ones who are more ‘coachable’ and open to feedback than those who may be overconfident and seen as leader-like. Developing hidden talent effectively can expand the talent pool with actual leadership potential.

If you were to harness even 10% of this hidden talent pool, you could lift the overall quality of leadership, resulting team culture and engagement, and innovation and problem-solving capacity from diversity of thought and styles. AND you could make progress on diversity and inclusion goals without creating divisions based on categories of minority groups.

Why Hidden Talent Stays Hidden

Too many organisations lose out on exceptional people because of outdated beliefs and systems that weren’t designed to see them. Hidden talent is often obscured by:

• Narrow definition of talent, merit and good leadership: Our mental models may fail to acknowledge the range of skills, perspectives, attributes and experiences that contribute to success in the role. For example, appearing confident, being visible and outspoken, and self-promotion are often seen as showing potential more than attributes such as substance, listening and deep thinking, and humility.
• Biased evaluation frameworks: Evaluation frameworks and approaches are skewed by the narrow definition of talent. Interviews and leadership assessment centres, for example, ensure the assertive people stand out. Assessors do not get opportunities to observe and measure actual performance for what the role requires, especially for knowledge based work or complex work where measuring every aspect of the role is difficult.
• Cognitive biases: Unconscious preferences for those who look, speak, or act like the status quo benefit people with similar styles and from privileged groups. This includes overreliance on first impressions, where we get caught in the “awestruck effect” that hinders rational assessment of substance due to style.
• Environmental blind spots: We rarely account for the role of access, opportunity to showcase strengths, and systemic barriers in shaping someone’s career trajectory.
• Internalised marginalisation: People who have been overlooked and/or faced systemic barriers can internalise the message that they are not good enough, that they need to fit in, and may hold onto self-doubt, stay invisible, and hold themselves back.

These gaps in our merit systems don’t just exclude minority groups; they also disadvantage some personality types such as introverts and those with high emotionality, neurodivergent people, career-switchers, non-native speakers, and anyone who doesn’t “fit the mould.”

How to Spot and Develop Hidden Talent

To create a more accurate and inclusive version of meritocracy, leaders and organisations must proactively evolve their systems. Here’s how:

• Redefine what counts as merit: Look beyond surface-level traits. Expand beyond the narrow view of merit such as credentials, years of experience, self-promotion abilities, or a confident performance in a high-pressure interview. Develop frameworks based on real competence needed, which is often multifaceted and context-dependent.
• Build bias-aware processes: Introduce bias interrupters—blind CVs, diverse interview panels, and bias spotters—so that different kinds of excellence can shine through.
• Train leaders to spot their hidden talent: Help managers become talent-spotters—not just for those who advocate for themselves, but also those whose contributions are quieter but equally powerful.
• Develop hidden talent without ‘fixing’ them: Some of the hidden talent feel that they need to ‘fix’ themselves, which stops them from contributing their authentic strengths. Carefully designed development based on valuing their unique traits and developing additional skills is critical.
• Create transparency and accountability: Require decision-makers to articulate why an appointment or promotion was made, grounded in clear, role-relevant criteria, as well as the potential biases they considered.
• Measure progress: Don’t just track demographic diversity. Ask: Are the best people in the right roles? Are we leveraging the full potential of our workforce? Have we spotted any hidden talent that we may have overlooked in the past?

Meritocracy and Inclusion: Two Sides of the Same Coin

True meritocracy doesn’t compete with diversity and inclusion—it delivers them. When we spot hidden talent, reduce bias, and elevate overlooked capability, we don’t just level the playing field. We raise the game.

By upgrading our definition of merit, we unlock a powerful feedback loop: better decisions lead to stronger, more diverse leadership teams, which in turn fuel innovation, engagement, and growth.

This isn’t about lowering the bar. It’s about seeing clearly enough to recognize that the bar was in the wrong place all along.

Let’s stop asking whether we should have meritocracy or diversity and inclusion. Instead, let’s spot our hidden talent to build a meritocracy that makes diversity inevitable.

How well does your organisation spot hidden talent? Can you see how you could enhance both meritocracy AND diversity and inclusion?

Written by Megumi Miki, with Anna Reeve and Leigh Gassner, co-founders of Leaders who Listen. We aim to develop leaders who create a listening environment of safety and space within their organisations to enable better decision making, drive growth and innovation, enhance collaboration and inclusion, and manage risk. If you’d like to understand how your leadership team can engage in productive disagreements, contact us about our Leaders who Listen assessment tools, presentations, masterclasses and development programs.