Dr Maria Yapp, Managing Director of Xancam Consulting Limited looks at the particular challenge of managing high potential people.

Managing high potentials is a hot topic for many organisations today. The key challenge organisations face is to first identify those managers who are most likely to progress rapidly to very senior business leadership positions. Armed with this knowledge, businesses are able to secure their succession plan and target training and development activity where it will yield the greatest return.

The common mistake many companies make is to place most emphasis on the factors that are least effective as predictors of future success when identifying their high potentials. These include the individual’s current performance, past track record, and ratings from their boss. All these are fine as a means of gauging current performance, but as predictors of long-term potential they fare rather less well. The same goes for performance on standard reasoning tests – contrary to popular belief when identifying high potentials, the brightest are not always the best.

So what does predict a manager’s potential?

There is now a groundswell of research-based evidence that has identified more effective predictors of future potential. The problem is that these are often neglected or placed low on the list of priorities in conventional potential assessments. We call these areas the ‘core capabilities’ and they should be the central features of any high potential talent assessment.

Emotional intelligence

There is now very strong evidence to support the importance of so-called ‘soft’ skills in distinguishing those managers who will move furthest fastest. The ability to lead and influence others and to have high levels of self-awareness, resilience and motivation are consistently found to distinguish high flyers from others.

Learning competence

Research by Morgan McCall and his colleagues in the US has found that managers with advanced learning skills progress more rapidly than others. People with high levels of learning competence are highly proactive in seeking out opportunities to learn and stretch themselves; they actively seek feedback from others and act on what they have learned. By constantly pushing the boundaries of their comfort zone, they move further faster.

Strategic thinking

This is a key factor that distinguishes those with the capacity to hold high level roles from managers unlikely to progress further in the organisation. The most senior roles deal with complex market or industry dynamics, possibly a global scope and extended timeframes. They place heavy demands on managers’ ability to handle strategic, complex and ambiguous issues – in other words their ability to think ‘outside the box’. This is not just about ‘intellectual horsepower’ or ‘IQ’. Some managers can score highly on standard reasoning tests yet still have difficulty in handling complex or strategic issues.

To best manage high potential talent, companies need to put the core capabilities at the heart of the assessment process, whilst at the same time, ensuring that high flyers are assessed in the organisation’s business context.

Potential for what?

It is not the case that some people have ‘potential’ and some do not. High potential is not something that can be assessed in the abstract or in a vacuum.

Many organisations attempt to address this matter by assessing their ‘high potentials’ against leadership competencies. The problem with this is that leadership competencies invariably describe the end state for leadership effectiveness – i.e. what senior managers should look like when they have ‘arrived’. So the most they can do is indicate any gaps between an individual’s current performance and the requirements for leadership effectiveness. What they do not do is provide an accurate indication of potential to achieve business leadership positions in the future.

A further problem is that most leadership competencies address the business’ current or medium-term priorities – which may have changed significantly by the time high flyers succeed to the most senior positions.

High potential can only be accurately defined in the context of the organisation’s future business requirements. The focus for assessing high potentials should be on ‘high potential indicators’ rather than end-state leadership competencies. This can be tackled in two phases.

1. Identify future capability requirements

This means firstly spending some time ‘crystal ball gazing’. Where does the organisation see itself over the longer term with reference to its strategy and its competitive environment? What are the most likely scenarios for the business over, say, the next 5 years? What management capability will be required at that time to deliver the strategy successfully in these scenarios?

2. Develop high potential indicators

With a clear understanding of future capability requirements, it is possible to develop high potential indicators. These indicators specify clearly what ‘high potentials’ need to demonstrate now that will enable them to progress swiftly to senior levels in the future. They are based on both a clear understanding of the organisation’s future requirements for talent and knowledge of the generic predictors of managerial potential – in other words, emotional intelligence, learning competence and strategic thinking.

Managing high potentials is a key activity for all businesses to ensure effective succession planning, and to ensure the greatest return on investment for their training and development activity.