Three steps for identifying high potentials
Paul Glatzhofer, Vice President, Talent Solutions, PSI Services on how to identify and nurture high potentials.
High performers are proven to bring about positive outcomes in a company, such as increased staff retention and higher employee engagement. Yet even in 2022, very few organizations have a structured process in place to identify and nurture high potentials (HIPOs). Historically, the preferred methods of measuring potential include longevity of service, manager recommendation, or past job performance. While these are all indicators, they can often be little more than an educated guess.
At the most basic level, potential is defined as the capacity or ability to develop a skill or become something more in the future. It can also be described as an underlying trait that has yet to be realized. Essentially, identifying potential is what we are doing each time a hiring or promotional decision is made about an employee. However, if an organization wants to hire with more certainty, then key criteria need to be set, from which high potential can be identified.
It is important to note though, that potential is not always about identifying an individual for a leadership role. Companies large and small have finally realized that promoting high performers into leadership roles does not always work well. Instead, organizations should also identify and nurture individuals who are high-performing contributors to the business, such as those with niche skillsets or technical knowledge. Both are vital to the success of the organization and in retaining and engaging employees.
There are three key steps that CEOs should consider when identifying high potentials and these steps, once implemented have been proven to take the “success rate” from 50% to 90%.
Step 1: Define what success looks like
Before beginning, it’s important for a CEO to take an overview of the business and ask, potential for what? The answer to this question is usually dictated by the end-state. For example, potential might be defined as having the ability to move into another role, to move into a role that is two or more levels higher than the current position, or to take on a broader scope of work and responsibility.
Defining high potential by role, level, or breadth are the most common definitions used by organizations, but it is critical that potential is aligned to organizational strategy and long-term goals.
For instance, if there is a requirement for more senior managers in the next few years, defining potential by role makes sense. Alternatively, if a strategy is to ensure leaders have a broader skill-set, then they should define potential by an individual’s ability to work across functions.
Some companies may be hesitant to develop a very clear definition of potential because they want flexibility, but it is important that everyone involved in the recruitment and development process is calibrated on who qualifies for the extra resources.
Once the principal objective is defined, core knowledge, skills, and abilities needed to be successful in the future should be identified. As an example, if an organization is attempting to identify the potential for senior director roles, there absolutely needs to be an understanding of what makes a strong senior director. Is the organization going through rapid change, meaning innovative change agents are needed? Or, is it finding individuals who can collaborate across a highly matrixed environment to be successful? Without understanding the core skills needed to be a success it is impossible to identify someone as a high potential.
Step 2: Use a robust and objective selection process
The selection of high potentials tends to lie on a continuum, depending on how structured an organization’s processes are. On one side of the continuum, it is highly structured, objective, and valid. On the other end, it is not much more than picking names out of a hat. Most organizations who have embarked on a high potential identification process are typically somewhere in the middle, maybe leaning more toward the subjective end.
There are many examples where organizations and leaders select individuals to be HiPo’s for a variety of bad reasons. Perhaps there is a vocal leader who is pitching some of their employees as HiPo’s to get them access to development. Maybe there is a great individual contributor who has been with the company for many years whose leader feels should have a promotion or a pay increase. Or there may have been a directive to pick a number of individuals from each department to keep things fair.
Even with all these challenges, a CEO wants to make sure that valuable investment put into training produces results. This is not to say that others shouldn’t be developed or given developmental opportunities, but rather that it makes good business sense to give more attention to critical individuals within the organization.
Step 3: Continue to measure success over time
Just like in step #1, without a definition of success, there can be little to evaluate. The evaluation may come in many forms: promotion rates, performance ratings, goal obtainment, organizational and/or departmental KPI’s.
It can also be helpful to look at indicators such as 360 performance evaluations where there are insights from a variety of levels within the organization. Success criteria should be set in advance and tracked annually on those identified as high potentials. Not only will this give the organization an indicator of the effectiveness of their high potential identification program, but will also indicate any further areas for development.
Keep in mind that high potential identification is a journey to the objective, structured side of the continuum. If you have no program currently, or if you are using mainly subjective data, achieving a fully objective and effective process may take longer than a few months. It may take a few cycles, or a year of incremental growth to get the program into a more objective and measurable place. However, if you are able to address these three key steps, your organization will be well on its way to obtaining a highly effective HIPO program.
About the author
Paul Glatzhofer is Vice President of Talent Solutions based in the Pittsburgh office of PSI Services. He works primarily with organizations that are implementing global assessment and development systems at the leadership level. Paul’s work includes leadership development, leadership skills training, coaching, leadership and executive selection, turnover and ROI analysis, and ongoing feedback development.
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