The war for talent shows no signs of letting up, even in sectors experiencing modest growth. One popular battle strategy is to institute programs aimed at “high potentials” – the people that companies believe may become their future leaders. In 2007, we launched a large-scale, cross-sectional and longitudinal analysis of how companies assess and manage their rising stars.
We found that the effective management of the next generation of leaders always encompasses three sets of activities: establishing clear strategic priorities, which shape the way companies groom high-potential leaders; carefully selecting high-potential candidates; and communicating who they are to others in the organisation; and managing talent itself – how high potentials are developed, rewarded and retained.
What is potential?
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Potential indicates whether someone will be able to succeed in a bigger role in the future. It is a person’s ability to grow and to handle responsibilities of greater scale and scope.
If you’re going to invest significantly in a worker’s development, you want to be reasonably confident that the investment will pay off. Before classifying someone as an up-and-coming leader, then, you’d look for signs of his capacity to learn quickly on the job, genuine interest in broadening his scope and willingness to take on extra work on short notice.
At the inner core are the individual’s motives. These predict consistent patterns of behavior over time. They tend to be stable, are usually not conscious and are highly related to what people enjoy and get energised or engaged by. Does the person get satisfaction from seeing others succeed? Does he demonstrate a passion for the organization’s mission over personal reward? To a certain extent, this may be something you’re born with, or a product of early social interactions. However, positive work experiences and wise mentorship can help people develop better motives.
Next is a series of abilities we call “leadership assets,” which predict how far and how fast an executive will grow. There are four important assets: a high potential derives insight; she can make sense of a vast range of information and discover and apply new ideas that transform past practices or set new directions. She also effectively engages others through emotions and logic, communicating a persuasive vision and connecting individuals. She demonstrates resolve and keeps driving toward goals despite challenges. Finally, and perhaps most important, a high potential seeks understanding; she constantly looks for new experiences, ideas and knowledge; asks for feedback; and adjusts her behaviour accordingly.
At the next level is a sense of self, or identity. Identity is how you see yourself on the stage. For high potentials, this means envisioning yourself as a senior executive – not just for the prestige but because you want to fulfill a passion for developing a team or make things happen. Individual contributors may be motivated by others’ success, for instance, but may have no wish to play an enterprise-wide role.
Align development to strategy
Many companies’ programs for high potentials simply replicate those in place at other firms. But potential is situational, and programs that manage it should be aligned with a company’s strategy. Best-practice organizations periodically re-examine their priorities and refresh their pool of candidates.