GeneralHr Library

Companies Are Bad at Identifying High-Potential Employees

Source |hbr.org|Jack ZengJoseph Folkman

A high-potential employee is usually in the top 5% of employees in an organization. These people are thought to be the organization’s most capable, most motivated, and most likely to ascend to positions of responsibility and power. To help these employees prepare for leadership roles in a thoughtful, efficient manner, companies often institute formal high-potential (HIPO) programs.

And yet, according to our data, more than 40% of individuals in HIPO programs may not belong there. We collected information on 1,964 employees from three organizations who were designated as high potentials, measuring their leadership capability using a 360-degree assessment that consisted of feedback from their immediate manager, several peers, all direct reports, and often several other individuals who were former colleagues or who worked two levels below them. On average, each leader had been given feedback from 13 assessors. Previous work we’d done with these organizations had shown that this assessment technique was highly correlated with organizational outcomes such as employee engagement, lower turnover, and higher productivity. The higher the leader scored, the better the outcomes.

But when we looked at the participants in the HIPO programs, 12% were in their organization’s bottom quartile of leadership effectiveness. Overall, 42% were below average. That is a long way from the top 5% to which they supposedly belong.

So how were these individuals chosen? What we found was that, in all three organizations, there were four characteristics that these individuals possessed:

  • Technical and professional expertise. It is often said that the person most likely to be promoted is the best engineer, chemist, programmer, or accountant. Having deep knowledge and expertise goes a long way in terms of getting a person noticed and valued. And it’s true that technical expertise does matter for managers. However, it’s essential to understand that what got you invited to the party is not enough to keep you at the party. People who are skilled technically but lack excellent leadership capabilities need to develop those skills.
  • Taking initiative and delivering results. Senior leaders in an organization were willing to look beyond poor leadership skills for a person who was consistently self-motivated and productive. Perhaps this is not surprising — when we asked over 85,000 managers what was most important for their direct reports to do to be successful, their number one choice was “drive for results.” Results do matter, but sometimes a top individual contributor should stay an individual contributor and not become the boss.
  • Consistently honoring commitments. When they say “It will be done,” it gets done. Inevitably, this creates trust in an individual and a willingness to look past other skills that are not excellent. There is no apparent downside to this skill until a person gets promoted and they become overwhelmed with too many assignments they have committed to achieving. We find that people who lack leadership skills don’t trust direct reports enough to delegate assignments and involve others. This leaves them drowning in commitments

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