Why our obsession with potential will not go away

The identification and development of high-potential employees (HiPos) has become a major topic in talent management. But what does potential even mean; potential for what?

A recent report by the Corporate Research Forum suggests that 93% of global HiPo programs focus on predicting future leadership effectiveness. Therefore, a HiPo is someone who has a high probability of being a good leader – someone who, because of her or his personality, expertise, abilities, fit, or coachability, can be expected to boost the performance of teams and organisations. In that sense HiPo identification is essentially a bet; a bet that, if selected and developed, person X will be a key player in the future of the organisation.

Despite the recent HiPo mania, the science of HiPo identification and development is far from new. For example, Industrial/Organisational (I/O) Psychology provides 100 years of evidence for understanding the predictors of job performance, career success, and leadership behaviors. This vast body of knowledge has resulted in the creation of many individual assessment tools, which should be regarded as measures of potential. For example, IQ tests evaluate learning potential; integrity tests evaluate cheating potential; and dark side personality tests evaluate derailment potential.

As we have noted, the basic ingredients of potential are well-established: ability, likability, and drive. Ability concerns what you can and could do and is a function of good judgment, expertise, and general intelligence. Likability concerns being rewarding to deal with – do people, particularly your boss, enjoy having you around? Do they like dealing with you? Drive concerns the tendency to get things done, and it’s a function of both ambition and prudence (wanting to get ahead and following through with those plans). People are usually hired for their ability, promoted for their likability, and fired for their lack of drive (although being too driven can also get you in trouble).

While this simple formula is useful, reality is somewhat more complicated. Likability and drive remain equally important throughout the career ladder, but the abilities that people must show to perform their jobs effectively change as they transition from role to role. Indeed, individual contributor, management, and senior leadership roles all require different abilities. Technical skills and expertise can be very important at the beginning of people’s careers, but management skills, vision, and entrepreneurship become pivotal when individuals start to lead others. By the same token, effective leaders are often able to act in inconsistent, even contradictory ways.

As Tim Judge showed in his seminal meta-analysis, leaders must be competitive, self-focused, and direct in order to emerge, but in order to lead effectively they ought to be other-oriented, empathetic, and sensitive, particularly if they want to mentor and develop people. Likewise, our own research highlights that the key competencies associated with leadership emergence are very different from those that predict leadership effectiveness. This implies that the best leaders are far more complex and multifaceted than most people realize. Even when leaders stand out for a few salient attributes – e.g. visionary, disruptive, and galvanising – their success is more likely due to their understanding of how to use those weapons in moderation. In fact, the more senior the leaders are, the more they need to manage the tension between competing competencies like being disruptive while also being pragmatic; taking risks while also being cautious; being self-confident without being arrogant, etc.

Importantly, if organisations are serious about winning the war for talent, they will need to spot leaders that can thrive in a complex and uncertain environment before their competitors do, as well as develop their strengths and weaknesses for each phase in their careers. To achieve this, organisations will not only need more data-driven tools, but also the capability to vet a large number of candidates early on with a nuanced set of criteria that encompasses the seemingly contradictory characteristics that leaders in today’s environment must possess. 

Barcelona spotted Messi when he was 12 years old, but it was no coincidence. With an army of expert talent spotters around the world and a clear set of selection criteria (including betting on youth, personality, and values fit), the Barca scouts were more equipped than their rivals to make an informed bet on Messi’s potential. In contrast, we have a long way to go when it comes to identifying leadership potential. Even with the current HiPo obsession, most organisations do not use a data-driven set of criteria for their HiPo programmes. Moreover, organisations rarely evaluate the potential of their employees unless they have stood out as high performers, but even this can be questionable in the absence of objective performance data. Often times these “high performers” are highly visible and politically savvy employees who lack the ability to drive actual results, while many of their more capable counterparts may go unnoticed despite not only performing better, but also having more potential. Just like Barcelona would not have hired Messi on the basis of his past performance (at age 12), organisations must look beyond their unreliable performance measures to identify their own future stars.  

Finally, it should be noted that beyond benefitting organisations, HiPo identification should also benefit employees, as well as the wider workforce. In a world where most people are deprived of accurate career feedback, and the correlation between self-perceived and actual abilities is slim, it is hugely valuable for people to receive objective information about their potential and flaws. Nobody can harness their potential or make the right career choices unless they are aware of their strengths and limitations. This is arguably the biggest reason for remaining obsessed with potential.

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