The High Potential Talent Equation

Bridging or Benching to the Future
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By Lisa Tromba – November 25, 2020

Research consistently shows companies that succeed in proactively identifying and developing high potential talent reap the reward of a strong leadership “bench” while enjoying greater return on investment with a positive impact to a company’s outcome.

In line with what many organizations have discovered, a Rutgers University study found that high potential development programs can lower turnover by 7%, while delivering significant gains to the bottom line. 

High potential talent typically represents 10% of key performers and 2-3% of the workforce. Generally predicted to advance two levels up within five years of being identified, these rising leaders show promise as outcome accelerators, by increasing the productivity of their teams and raising the performance of those around them.  Typically, their own growth will spawn other high potentials.  As high potentials develop, they begin to identify and develop additional high potentials.  They become mobilizers of high potential talent, while creating an even richer pipeline of talent for the organization. 

The ominous question high potentials often ask themselves is whether they are on the leadership bench or on the organization’s leadership bridge? 

Being on the leadership bench does not connote movement or momentum.  In fact, it is a place of pause, to wait, and to hope.  When my sons were young, I vividly recall times at the baseball field watching many of the young boys and girls on the team, sitting on the “bench,”  hoping for their chance to step up to the plate and to be able to apply what they had learned and practiced throughout their earlier preparatory baseball seasons.  Their talent and training got them to the bench.  Though, they often didn’t get the opportunity to prove themselves on the field. 

Being on the leadership bridge on the other hand, connotes movement and passage in a clear direction, to a destination on the other side of the bridge.  From an organizational point of view, the difference may not seem significant.  From an individual’s point of view, bench or bridge could mean the difference between identification, development, and disengagement, versus identification, development, movement, and engagement.  A formal identification and customized high potential development program demonstrates the organization’s intention to guide, enable and facilitate passage along the leadership bridge.

How Strong is the Bridge and How Many can it Hold?

The most effective high potential initiatives aim to identify, develop, and empower a broad range of talent representing an array of skill sets and perspectives.  Inclusive identifiers of high potential talent that are “targeted” and aligned to strategic goals and anticipated challenges, provide the opportunity for multiple leadership bridges leading to an expanded pool of future leadership across the organization.    

With wholesale change spanning the globe, the most vexing issue that is likely to be keeping CEOs awake at night, is how to ensure they are building their leadership bridge with those who are not only equipped for future missions, but armed with the “secret weapons” enabling steady, bold, and forward movement. 

Spotlight on the Future of Talent

Emerging from the tumult of 2020, and with continuing uncertainty ahead in 2021, the case for consistent focus on high potential talent remains strong.  Top experts weighing in on talent management for the future agree, while talent strategies in most cases, are being adjusted, focus on high potential talent is front and center.

In November 2020, McKinsey reported that rising talent management trends as a result of COVID-19 highlight the need to proactively craft a strong talent strategy for the future.  Reimagining practices to build organizational resilience and to drive value was represented as a key focus of CHROs broadly.  Critical areas were noted as key to creating a strong and durable talent strategy for the future including finding, developing and hiring the right people, and optimizing workforce planning and strategy with a focus on critical roles, skill pools, and talent systems.

KPMG’s 2020 US CEO Outlook also looking to the future of the workforce, highlights that talent risk has become a top concern among leaders when it comes to organizational growth, as a result of the pandemic.  “It becomes an absolute imperative for the CEO to focus on the transformation of the workforce that is happening in organizations today.” 

Gartner recently surveyed more than 800 Human Resource leaders revealing that many expect their organizations to focus on growth in 2021, and 68% of these leaders’ report that in addition to building critical skills and competencies, building a “bench” of current and future leaders will be among top priorities in order to support organization goals. 

Predicting that most leadership roles will look “dramatically different five years from now,” Gartner has reported organizations are investing heavily in high potential programs.  Based on a survey of Learning & Development leaders across the globe, 65% of companies surveyed reported a move away from other talent investments in order to fund high potential programs.

In addition, there is a growing trend to focus “less on specific high potential qualities as an imperative, resulting in twice as many employees being identified as HIPOs than before.”  And that speaks to the notion of designing and aligning high potential programs to specific organizational strategies and goals forcing discernment around key characteristics and indicators of high potential, as well as distinguishing between “achievers” and “drivers.”  One cannot be an effective or sustainable driver unless they are personally aligned with the purpose and direction of the organization and its mission.

The survey also revealed that a lack of diversity is a top pressing concern of HR leaders, contributing to the lack of confidence and trust in their leadership “in a year when demands for equity and inclusion have, in general, become more visible and ardent from both employees and the public.”  Building a high potential leadership bridge with multiple lanes for diversity is an imperative.  “The barriers that impede advancement among underrepresented talent equally apply to the leadership pipeline,” noted Gartner. 

In comparing the 2020 Predictive Index, CEO Benchmarking Report to its 2019 findings, it is clear that Talent Strategy remains among the top three priorities of CEOs. Finding the right talent to conquer immediate challenges as well as challenges CEOs will face in the future remains a top hurdle for 2021.  According to the 2020 study, performance and productivity is a significant concern keeping 56% of these CEOs up at night, a notable increase from 36% in 2019.

There is no doubt that high potentials represent a strong bridge for future organization leaders.  Identifying high potential talent is undisputed as being critical for organizational success, and more now than ever in a world where change is rampant.

High Potential Talent Differentiators

The Center for Creative Leadership (CCL) notes, each business will have its own definition for high potential talent because different skills are needed for different types of work.  “…but the essence remains the same.”  In a co-authored report in Harvard Business Review, Jack Zenger, an expert in the field of leadership development and organizational behavior and national columnist for Forbes and Harvard Business Review, reported that 40% of people in High Potential programs do not likely belong there.  Taking a close look at 2,000 employees in high potential programs spanning a cross-section of organizations, Zenger and his business partner found that overall, 42% were below average and 12% were in their organization’s bottom quartile of leadership effectiveness.

How does that happen?  Likely the issue is that organizations are not using unbiased, formal systems to evaluate potential, and they are not assessing in a formal, unbiased, and comprehensive way.  Recognizing that each organization and business has specific core competencies it considers crucial, Zenger stated, “If you can find someone who has scores in the upper 5% or 10% on at least five of the those competencies, you’ve got in all likelihood an extremely high potential person.”

High potential talent can seem to be elusive.  However, using scientific tools to reveal clear indicators of high potential talent is the most efficient and effective way to uncover and identify precious talent that is often “hidden” within the organization.  These tools are equally important when it comes to validating talent that “appears” to be high potential based on suggested performance and other observable markers.    

While we are seeing more and more organizations broadening these programs to harness high potential talent for specific strategic initiatives, or challenges, requiring precise attributes and skills, there are certain indicators that cannot be overlooked when it comes to identifying high potential talent.

Leadership Competence, Capacity and Behaviors:  Competence represents a baseline of high potentials which can partly be assessed based on an evaluation of assignments, experiences, and challenges.  Notably, high potentials are capable of more than most including handling complex tasks.  Assessing capacity for future performance is trickier and requires insights not usually attainable through traditional subjective approaches.

Engagement and Commitment:  Values alignment, and belief in organization and mission is paramount.  Understanding the forces that drive individuals also reveals levels of ambition and willingness to make personal sacrifices, and to do what it takes.

Dynamic Sensors:  Practical sensibility is a key attribute of high potentials.  A keen ability to assess risk, opportunity, and to operate with an acute sensitivity to timing is a distinguishing characteristic.

Mindset:  The mental agility to think along multiple dimensions including critical, conceptual, futuristic, and practical is an indicator of both strategic and execution intelligence.  Creative and systems thinking ability are also dimensions where high potentials excel.  Without question, high potential talent operates with a growth mindset, versus a fixed mindset.

Catalytic Learning Capability:  Learning agility and the ability to take on new ideas and convert them into action sets high potentials apart.   Assessing an individual’s eagerness to uncover new knowledge and opportunities beyond where the business has been and to master new types of expertise, is a critical component to build into assessment criteria for future leaders.

Enterprising Spirit and Drive:  Commitment to excellence and quality, along with the drive to excel are all key attributes of high potentials.  These rising leaders also prove to possess a strong tolerance level for challenge and ambiguity.  Their enterprising spirit is powered by an intrinsic drive and is sustained by their strong self-starting ability. 

Emotional Intelligence and Sociability:  Assessing emotional intelligence, or the emotional quotient of an individual provides crucial insights into their awareness level of themselves as well as their social awareness.  The best assessment tools will also measure ability to “regulate” self and relationships with others, both of which are non-negotiable for interpersonal, communication, social effectiveness, and effective and sustainable leadership.  High potential talent has proven to have a strong ability to engage, influence, and empower others. 

Formalizing Identification of High Potentials

The formal identification of high potential individuals matters.  It represents clear advantages for the organization and for the individual.  It is one thing for a rising leader to hear from their manager that they are considered to be on the high potential track, and quite another thing to be formally identified and recognized by the organization as a high potential. 

A study conducted by The Center for Creative Leadership (CCL), examined high potential talent from the view of those inside the leadership pipeline.  The study revealed formal recognition is particularly important to the HIPO’s engagement and commitment to the organization.  “Formal identification fosters ‘leader’ identity.”  The transparency that comes with the formality of identification and development, has a significant impact on how HIPOs see themselves and also how the view the organization.  Absent formal identification, “high potentials” will second guess their importance to the organization and they will be less likely to see themselves as a future leader in the organization, compromising engagement, drive, and their sustainability in the program and the organization.

Formally identified HIPOs are Engaged and Committed

This important study highlights that the formality and the level of transparency in identifying high potential talent has a direct impact on retention.  The research confirmed, formally recognized HIPOs experience greater development support and development opportunities.  Formal identification also leads to greater mentoring opportunities with senior leaders, special assignments, inclusion in senior meetings, and intentional coaching.

It is no surprise that over 95% of formally identified HIPOs were “motivated and committed,” suggesting investment in their development and formal organizational support of HIPOs builds engagement and commitment.  Informally identified HIPOs on the other hand, reported they felt less tied to the organization and consequently, they were more active in seeking other employment.

High potentials create momentum, and they spawn more high potential talent.

High potentials look for more than just greater responsibility, they expect the authority to go along with the responsibility.  They also understand the entire talent landscape matters. 

Formal identification and recognition have proven to increase motivation of HIPOs to continue performing and developing themselves, and others.  More than 80% of formally identified HIPOs actively identify and develop potential in others based on their keen insight and experiences, making them developers and mobilizers of high potential talent for the organization. 

The CCL study also noted that informally identified high potentials are far less likely to identify and develop talent, limiting the benefit of cascading development within the organization.

Building Bridges or Benches? 

With 2021 just around the corner, and talent strategies continuing to evolve, answer these four questions as you evaluate future leadership strength in your organization.  Are you building bridges or benches?

  1. How strong is the leadership pipeline in your organization?
  2. Does your organization have a formal process for identifying high potential talent?
  3. How far down into the organization is high potential talent formally identified and formally developed?
  4. Could your organization benefit from a formal high potential identification process as an effective bridge to improve future leadership strength as part of your 2021 talent strategy?

Are you benching or bridging your high potentials?  Perhaps this is the most important question to answer.

Recommendations

  • Be deliberate about high potential identification and process transparency. 
  • Consider high potential initiatives below senior levels to strengthen your leadership pipeline.
  • Leverage objective assessment tools to reveal key high potential indicators to find the hidden gems in your organization. 
  • Create multiple leadership bridges for high potential talent inclusive of broad considerations including functional leadership. 
  • Be mindful that high potential identification and development is designed to harness the power of diversity…equitably. 
  • Build leadership bridges, not benches.  Bridges enable passage, with a direction that is clear.  Benches enable a pause, for an undetermined amount of time, before moving on in an undetermined direction.

Lisa Tromba

Lisa Tromba is the Managing Director and Co-Founder of Luisi Tromba Advisors, an Executive Search and Leadership Solutions firm.  Lisa sits on the Board of the Perth Leadership Institute and she is an active member of Women in the Boardroom and the Association of Talent Development.  Lisa is currently co-authoring a leadership book with the Founder of the Perth Leadership Institute, and she was quoted in the book, From Cinderella to CEO.  Her articles have been published in Chief Executive Magazine and by the American Management Association, among other business publications.  Find Lisa at LuisiTromba.com or linkedin.com/in/lisatromba.

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