In my last post, I wrote about performance calibration as being one of the secrets of success for talent reviews. But performance isn’t the only dimension of top talent. The other dimension we look at is potential. Now with performance, it’s well understood by most managers and executives, and we can place some measures around performance, to make it easier to pick the appropriate performance rating for an employee.
With potential, it’s so much harder. We often get asked, what is this thing called potential? And what does it mean? Potential for what? So we’ve tried to invest more time in educating managers and executives about our definition of potential and what it means.
In the talent review, we quickly found that some managers really get the idea of potential and how it can be applied to their business. They understand that they have to build and grow the next generation of leaders. They understand that most of the time it’s better to build and grow internally; and that only some of the time it’s better to buy talent externally — and really great leaders have the ability to distinguish between these two situations.
On the other hand, some managers were less solid in their understanding of potential and how to apply it to their organisations. A high performer is not necessarily top talent, unless they also have high potential. We saw a few cases where the employee’s performance was being rewarded, rather than focusing on the high performance and high potential employees, who have the potential to go one level up or even two levels up.
Now we’re thinking about what to do. We don’t think quotas of top talent are the right way to go: the “right” number of top talent depends solely on the requirements of the business. In growth economies you need a solid bench of front-line and middle managers, with a good portion that have potential to grow to higher levels and lead the business into the future. In mature economies, you need less of the accelerated pool, but you still need enough top talent to sustain the business.
We are tossing around ideas about getting much more specific and detailed in our measurement of talent. At present we use questionnaire that is applied equally to individual contributors, front-line managers, directors, vice presidents and above. It gives us a really good first cut of the population, but we need to take it to the next level. We call this next level “second filter.”
What might this second filter be? What would be involved? Well it comes down to two parts: defining what is necessary for success at the next levels (I like to call this “plus one” and “plus two”); and then putting in place measurement instruments that uncover a high potential employee’s individual fit with the success definition.
Our ideas fall into a number of different initiatives. Some areas of the business use assessment centres successfully. Here a group of high potential employees is brought together for a day or two. They are intensively tested and assessed. The results are analysed and fed back to the employees, to help them craft their personal development plan.
We’ve also looked at detailed behavioural interviews (similar to that proposed by Bradford Smart in Topgrading.) Here, we’d have two consultants interview high potential employees, to gather information about their personal capability and motivation, compared to the success model. The interview process also involves detailed one-hour reference check interviews, with two or more referees, to get independent validation of the high potential employee’s skills, capability and potential to grow. The output of the interview processed is viewed from an organisation level, but also fed back to the employee, with development recommendations, so they can craft their personal development plan.
Another option is to use psychometric instruments like Hogan HPI. This tends to give some view of the employee’s true potential, but we need to match this information with the employee’s motivation to achieve and their motivation to gain power and influence, to get the full picture.
So really, an ideal approach would be a blend of these initiatives. It would give us concrete reliable information that is predictive of success: we would know that certain characteristics lead to promotions and sustained high performance over time.
If you have other ideas about potential and how to measure true potential, leave a comment for me.