Oriel Recruitment

Developing High Potentials:

How to Recognise, Nurture and Keep Them

“Many companies still believe that they will recognise high potentials, as fresh cream is recognised when floating on top of a cappuccino.”

Is There A Need For Best Practice In Top Talent Management?

A belief system still exists in many organisations that future leaders will emerge without any need for specific HR policies aimed at developing high potential individuals. In fairness, current business leaders can perhaps be forgiven for believing that the “survival of the fittest” assumption is valid because they (often rightly) see themselves as survivors too. Of course, applying “natural-selection-technique” implies a number of inherent risks to the competitive future of the organisation. The chart below, indicates just how low in percentage terms business executives perceive the strength of the talent management processes appeared in the year 2000.

It is a luxury that companies can no longer afford, since the arrival of what has been dubbed “the second war for talent.” The first war for talent (announced in the late 1990’s) many believe will be something of a minor irritation in comparison. There will be a shortage of both knowledge workers and leaders available to companies, and in this regard the implications caused by the shift in Ireland from low value to high added value work in the Irish economy are clear.

This time the demographic gap will be structural in nature. Across Europe, the total number of employees aged 55 or older is set to rise to 47% by 2010. By the time we reach 2050 as much of 60% of the total working population will be older than 60 years. Even with acknowledging the positive impact of increased female participation, access to migrant workers, and process reengineering, - this demographic alone serves to underpin the rationale that investment made in attracting, selecting, engaging, developing, and retaining in-house talent is becoming a critical strategic imperative for Irish companies.

As a consequence a growing awareness of the need for long term strategic HR policies to attract and retain talent is becoming apparent in many Irish companies. Perceptive organisations are beginning to see the benefit of devoting attention and resources to the identification and development of potential internally, rather than “buying it” externally.

So, is there a need for best practice in Top Talent Management? Yes. How Do You Recognise Top Talent?

• To become effective at developing, deploying, and retaining talent HR practitioners will face into a number of new challenges which include:
• The engagement of Senior Management and holding them
  “accountable” for owning the identification and development of high potential pools.
• The need to clone Marketing techniques and to “segment” talent pools.
• Coping with increased complexity and in particular “learn to manage, engage, develop, and retain “individuals.”
• Be creative and less “risk adverse” in developing talent in the most effective manner
  
  

A story is told of a South African farmer who, back in the 19th century decided to give up his hard life of eking out a living on his struggling farm by selling up to go in search of his fortune by prospecting for diamonds. He bought the necessary equipment from the proceeds of the sale and set off. Several years later the farmer died a destitute and broken man. Shortly after his death the purchaser of the farm noticed a dull and strange looking rock lying in a field on the farm. Closer inspection revealed that the man had fallen over the largest uncut diamond ever found in Africa up to that point in time. The moral of the story is of course that if you want to go prospecting for diamonds - first of all take the trouble to find out what they look like in their uncut state! The connection this sad tale has with trying to identify high potentials in organisations is clear cut.

Almost perversely, the “competency industry” has helped create an illusion that there is a magic set of qualities for identifying high potentials. The list of qualities that high potentials are endowed with seems endless - and in some cases even contradictory. However, if this illusion that a basic set of unequivocal competencies is decisive for the identification of high potentials were to be abandoned, it would open the way for seeing high potentials for what they are: high performing employees with potential that, in time will grow. A good starting point for spotting the high potentials can be based on four basic criteria:

• Learning ability (LQ)
• Emotional intelligence (EQ)
• Intellectual intelligence (IQ)
• Attitude (A)

The cornerstone of this approach is the proposition that one should not benchmark a 25 year old to a 45 year old, but to a “norm” of what is expected of someone given their age or work experience. Managers are often asked to rate people for performance and potential, which if we are honest is a little like comparing apples with pears. Not surprisingly many managers often confuse the two and take excellent performance to be the primary (or only) indicator of high potential. In truth, of course it also easier politically to create a high potentials list based on excellent performance rather than latent potential. Interestingly though, a recent study points to the fact that nearly all high potentials are high performers (93% to be exact) demonstrating that excellent performance is a “must have” to be entered on to the high potential listing. The same study shows that only 29% of high performers are effectively high potentials. The real danger of contaminating the pool of high potentials with strong performers that have low growth potential due to errors in labelling, are clear. The inconsistent use of the term “high potential” and a failure in the “common sense” realisation that there will be a shift in knowledge, skill, and performance expectations over time in the career of high potentials must be corrected if organisations are to effectively manage their talent.

Use of Development Centres to Identify High Potentials

“If you can measure it - you can manage it” - conventional management wisdom

A formal benchmarking of high potentials early in their careers (say three years after commencement) using a development centre approach enables an “audit trail,” to be created through a thoughtful and planned approach to career and personal development activities. A second and crucial measurement is a further development centre scheduled for between thirty five and forty years of age. It is through this detailed calibration of the high potential’s capability and capacity that can help organisations avoid the twin traps of promoting people to their level of incompetence (“Peter Principle”), and the “inch deep - mile wide” manager bought about by ineffectual attempts at rotation schemes.

A final formal measurement may be taken by means of an “end assessment centre” which serves to inform decision making about whether or not to admit the high potential to the highest ranks in the organisation, and in what capacity. In this way throughout the career of the high potential companies can continuously monitor and adjust the high potential track with confidence, on the basis of more informed decision making by utilising development centre diagnostics.

In between development centre measurements, the high potential track can be managed flexibly - by offering varied and testing developmental activities such “stretch assignments” which challenge and provide rich opportunities for high potentials to acquire new knowledge and skills and receive feedback and coaching / mentoring through internal support systems. As suggested by the “shifting expectations chart” (above), the monitoring of high potentials over time, brings up a testing dilemma: the competencies high potentials rely on to be noticed in the early stages of their careers, are often the same as those that act as an impediment to growth or derail them in subsequent career phases. Many a young potential becomes aggrieved when early year enabling competencies such as “assertiveness” and “self-confidence” are suddenly re-branded as “aggressiveness” and “arrogance.” The ongoing monitoring and continuous feedback loops through different career and role transitions are therefore fundamental to managing successful career transitions.

Not withstanding this, with each transition the chance of derailment is very real. Very often, “it is not a case of if high potentials will derail, but when” (Kovach). However, the loss of high potential status can itself be character building - forcing the high potential into reflective learning, helping them to practice introspection and to reinvent themselves. Failure is a good teacher, high potentials who discover their limitations in this way and find the pathway back to high potential status, return stronger and more able.
Derailment is not a permanent state, only a temporary one.

Final Thoughts

In the ever tightening Irish labour market. Retention and being an employer of choice is becoming increasingly important. The compensation and
benefits policies of most organisations can provide for the possibility of rewarding high performers and high potentials at slight premium. Rewarding high potentials by investing in their proper development has a dual effect:

• On the one hand companies offer high potentials challenges and opportunities to learn new skills and
• On the other, high potentials grow to a subsequent job level at faster rate, and as a consequence their remuneration package will rise without infringing formal organisational compensation and benefits polices.

Often, organisations are reticent about telling high potentials that they are on the “secret” high potential list. Allocating the “high potential” label is a tricky business - however in a tightening labour market, communicating the label (correctly) can be part of the retention strategy for this target group. The association of the label with a guarantee of future success is often problematic for employers, let’s face it no responsible HR professional can gaze into a crystal ball and predict the future. However, by setting a time constraint on the label, high potentials become aware that the label is not a wild card with guarantees but something that has to be worked at to retain. By adding the time constraint - the label is up for discussion and sets the agenda for stimulating the high potential by asking “what do you want? Where do you want to go?” Testing needs and motivation in this way can be regarded as an important first step in the development and retention of the high potentials in your organisation.