Brad Zomick

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The ‘Staggering’ Struggles of Workplace High-Potentials Programs

Articles

Businesses are often misidentifying their most promising employees and losing the chance to develop future leaders

Spotting and training employees who can best lead a company into the future is one of the most important tasks facing businesses today. It may even top the list.

“The most critical talent management activity for HR leaders to get right this year is identifying and managing High Potential (HiPo) talent,” CEB Global says.

But many — perhaps even most — businesses are on the wrong track. In an extensive analysis, CEB found:

“Organizations with stronger leaders can show twice the revenue and twice the profit growth. Yet a HiPo program, seen by many organizations worldwide as the feeder to its leaders of the future, is statistically more likely to fail than succeed — 50% of HR managers lack confidence in their programs and a staggering 5 in 6 HR managers are dissatisfied with the results of their programs.”

And CEB is not the only bearer of bad news. Leadership consultant Jack Zenger co-authored a report in the Harvard Business Review that found 40 percent of people in High Potentials programs may not belong there. “We were shaking our heads, saying, ‘Oh my gosh, from all the data that we have, these would not have been the people whom you would predict will excel,’” Zenger told Pathgather.

To understand what’s going wrong, and what it means for Learning & Development, we need to start with what a HiPo is.

What is a High Potential employee?

“Broadly speaking, High Potentials are the pool of future organizational leaders,” the Center for Creative Leadership (CCL) explains.

The organization defines “High Potential talent as an employee who is assessed as having the ability, organizational commitment, and motivation to rise to and succeed in more senior positions in the organization.”

Each business will have its own definition for High Potential talent because different skills are needed for different types of work, CCL notes, “but the essence remains the same.”

The problem is that many businesses aren’t using systems that really drill down on leadership potential.

Determining who your HiPos are

To find High Potentials within a company, managers need to use a 360-degree assessment — a broad, extensive analysis, Zenger says. The assessment collects responses to 50 questions from an employee’s bosses, peers, subordinates and others who work with him or her, Zenger says.

It focuses on “a whole variety of leadership behaviors that have been determined to be the ones that most differentiate high performers from average and poor performers,” he adds. “The behaviors weren’t just grabbed from the air.”

“Then you pull all that data together and create a summary,” which contains two kinds of data: “statistical information and the quantitative replies,” Zenger says. “You also get color commentary — people who are writing comments about this person’s strengths, behaviors that get in their way, and what might be most helpful for this person to succeed.”

Each business has certain core competencies that it considers most important. “If you can find someone who has scores in the upper 5% or 10% on at least five of those competencies, you’ve got in all likelihood an extremely High Potential person.”

When Zenger and his business partner Joseph Folkman looked at nearly 2,000 employees who are in their businesses’ High Potentials programs, the 360-degree assessment found that “12% were in their organization’s bottom quartile of leadership effectiveness. Overall, 42% were below average.”

What’s going wrong?

Rather than using a 360-degree assessment, many businesses operate differently. For example, they instead often ask managers to name the most promising employees.

“In some cases, managers are operating on totally different criteria,” Zenger says. “As a manager, you may put a very high value on getting along, being a good team member and collaborating. Or you may value technical competence over everything else.”

And managers often take a shorter-term view. When asked to choose people for HiPo programs, managers are often influenced “by what you did last month, not all year or a longer-term project.”

“Friendship reasons” sometimes come into play as well, Zenger says. And managers have their own biases. “We know that when one person is performing the assessment about his or her subordinates, that is often a reflection of a lot about the manager almost as much as it is about the person being evaluated.”

Having multiple raters for each individual helps change that. “When you bring in three or four raters, that rater bias evaporates.”

Crucial for L&D

Having a formal process that works for successfully determining High Potentials is essential.

For starters, these are the employees you most want to hold onto — and the designation makes a big difference. “Only 14% of formally identified High Potentials are seeking other employment. That number more than doubles (33%) for employees who are informally identified as High Potentials,” CCL found in a survey.

High Potentials “expect more development, support, and investment,” CCL says. They look for training, mentoring, coaching, special assignments, and other means of learning. They’re “more committed and engaged when they have a clear career path.” They want to know “where they are going and to understand next steps in terms of development, experience, and movement.”

HiPos develop others

There’s also another role High Potential employees play in your workplace’s learning ecosystem: They become teachers.

“While High Potentials are the recipients of increased opportunities and investment, they are also talent developers in the organization,” CCL reports. “Many (84%) are actively identifying and developing potential in others. They have insight and experience that is needed for developing the next layer of High Potentials, as well as the larger talent pool.”

Today’s learning experience platforms facilitate that by making it possible for anyone in a company to create and teach courses. The most valuable, helpful lessons become popular and “bubble up to the top,” so more and more employees discover them.

All this helps explain why companies with more successful HiPo programs have overall more successful learning ecosystems.

“The companies who have the best track record of producing really great leaders,” Zenger says, “are those who have taken development very seriously.”

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