June 14, 2021
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:
We also noticed that the underperforming HIPOs were especially lacking in two skills: strategic vision and ability to motivate others. When filling their HIPO programs, organizations should look for people who show signs of having these skills — which are very important as you climb the organizational ladder — and not place quite so much emphasis on things like cultural fit and individual results.
For the organization, there are several risks to filling your HIPO program with people who don’t actually possess leadership potential. Leaders may well be lulled into assuming that they have an adequate leadership pipeline when in reality they have less than half the pipeline they thought. Just as bad, the organization may be missing out on the people who would make great leaders, even if they don’t fit the stereotype of a high-potential leader.
The situation is hardly any better for the people in the HIPO program who aren’t likely to flourish in senior management roles. These people may assume that their career is on track when in reality they may have been steered in a career direction that is less than ideal for them. These misplaced members of the HIPO group were often extremely effective individual contributors, even if they weren’t equipped for a senior role. These are people the organization wants to retain (which may be another reason they’d been funneled into the HIPO program — perhaps senior management has no more imaginative way to reward top contributors). When organizations push their top contributors into management roles in which they won’t thrive, however, they are running the risk of losing a top individual contributor and demotivating the people who are now reporting to an incompetent boss — and losing them as well.
But all is not necessarily lost. The underqualified people in the HIPO program who truly do aspire to senior positions in the organization should focus on learning and practicing the leadership skills required. We strongly believe that HIPOs with leadership deficiencies can eventually develop excellent skills, but the majority of those with poor skills don’t realize their deficiency. Being part of the HIPO program masks their shortcomings. So take an honest look in the mirror at what you need to learn.
As for the managers running the HIPO program and selecting people to be in it, we suggest they be a little more careful in whom they anoint.
—Jack Zenger and Joe Folkman
Connect with Zenger Folkman on LinkedIn, Facebook, and Twitter
(This article first appeared on Harvard Business Review)
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