Change is inevitable and organisations need to plan effectively to ensure long-term success. Planning, however, is not just about what you are going to do – you also need to know who will be executing your plans, now and in the future. Most would agree that you cannot simply select leaders who will perform well in a certain position today and think your job is done.  Your current leaders are in the process of moving on to better opportunities and the ever-changing environment ensures that you will always have a fresh set of opportunities and threats to deal with.  What (and who) got you ‘here’, won’t necessarily get you ‘there’ – therefore, you also need to identify those individuals who have the potential to lead your organisation in the future.

Your leadership pipeline is a core component of your executing strategy

Talent management is about ensuring that the right individuals are in the right positions at the right time to deliver on strategy today and in the future. It is about identifying, developing and retaining individuals with the capabilities and commitment to be successful in a given position and it is to the benefit of the organisation and the individual. Those individuals that have been identified as having a high potential, comprise your leadership pipeline. Some might be further along, having been identified as immediately ready for leadership roles, whilst others are “on track” for leadership roles in the future.

What is potential?

Here follows two useful viewpoints:

  1. Hay Group views potential as “the capacity of people to learn and develop over time”.
  2. The Corporate Leadership Council (CLC) proposes that potential consists of three key elements:
    • ability (cognitive ability, emotional intelligence, and acquired skills),
    • aspiration (motivation to lead),
    • engagement (emotional and rational commitment with the organisation)

Rather than just looking at ability and how an individual is performing right now based on that ability, you can take a holistic view.

Ask yourself:

  • “Can this person perform in future leadership roles?”
  • “Does the individual want to develop and/or assume leadership responsibilities?”
  • “Are the individual’s “head and heart” connected to my organisation for a longer term?”

Identifying High Potential Employees

Identifying, coaching, developing, assigning projects, and retaining high potential employees are all critical activities requiring time and attention. This entry will only touch on the starting point: identification.

Determine your selection criteria

Some examples of criteria used to identify high potentials, may include:

  • experience,
  • education,
  • job-related knowledge,
  • job-related skills,
  • performance,
  • competency potential,
  • commitment,
  • ability,
  • aspiration.

In a formal process, assessments are often used to measure these criteria. Hay Group’s research findings show that high potential individuals can be characterised as understanding of other people, eager to learn, exhibiting emotional resilience in the face of a challenge and having a strategic perspective regarding their own work relating to the organisation and others (Hay Group, 2008). These characteristics, which are rather difficult to acquire, allow individuals to think of the bigger strategic picture, stretch themselves to work to the very best of their ability, and to help others do the same.

Challenges to identifying high potentials

Development Dimensions International, Inc. (DDI) points out five common challenges you must overcome when identifying high potentials:

  1. The evaluation of talent is buried in the larger talent review process: This could mean that you don’t have enough time to evaluate talent, making it hard to identify the right candidates for immediate development.
  2.  Too much time is wasted on rating too many:  Evaluating all direct reports may take away from the discussion around those to be seriously considered.
  3. Potential is poorly defined: There can be vast differences of opinions between raters’ assessments of high potential candidates if potential isn’t clearly and objectively defined.
  4. Potential is confused with readiness: Readiness is about determining the degree to which a high potential is ready to perform in a target job “when judged against specific business and leadership requirements.” Potential, on the other hand, needs to be aligned to motivation, development orientation, balanced focus on results and values, mastering complexity and other qualities required for more senior or strategic levels. Readiness and potential are therefore different things demanding different criteria.
  5. Managers are under-involved: The more assessments are used, the less manager input seems to be considered. Managers are typically the most reliable source of observed behaviour. It is critical that they too understand the criteria for selecting high potentials and that their involvement in the process is encouraged.

Do you face some of these challenges in your organisation? Addressing these challenges, could make it easier to identify the right talent.

Final thoughts

Many studies have revealed that effective leadership development improves bottom line financial performance, attracts and retains talent, drives a performance culture and increases organisational agility. The type of process used to identify your high potentials can lead to differences in their developmental experiences. This means that how you select and develop your staff has a big impact on how they feel about your company, which is vital to their future development and retention.

Ryan Davis and Kati Mhone are Senior Consultants at JvR Consulting Psychologists

References:

Campbell, M. & Smith, R. (2010). High-potential talent: A view from inside the leadership pipeline. Center for Creative Leadership. Center for Creative Leadership (2008). Driving performance: Why leadership development matters in difficult times. Center for Creative Leadership. Hanson, E. (2011). White Paper – The Talent Review and High-Potential Identification: Overcoming Five Common Challenges. Development Dimensions International, Inc. Hay Group (2006). Potential – for what? What every CEO should know – new insights into selecting the right leaders to secure your competitive future. Hay Group. Hay Group (2008). High potential employees: Your organization’s treasured asset. Hay Group. Ready, D.A., Jay, A.C. & Hill, L.A. (2010). Are you high potential? Harvard Business Review, June 2010. Retrieved 15 July 2012 on World Wide Web. http://www.hbr.org [Internet Document].