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Mindset: Identifying Potential….but for What?

identifying potential....but for what? kiddy and partners monthly mindset

Increasingly, CEOs and Board members are recognising that the identification and development of employees with potential to be effective future leaders is a critical strategic objective.  This heightened level of scrutiny, whilst welcome, puts increased onus on HRDs to ensure their process is robust. However, in many organisations, approaches to identifying potential leaders remain highly subjective, politicised and ultimately, ineffective.

The most common mistakes include conflating judgements of potential with current or past performance, assuming superior performance in a current role will lead to success in a future role and lack of clarity about ‘identifying potential for what?’ Perhaps the biggest problem of all though, is that a large proportion of organisations still rely on line managers to assess an employee’s potential.[1]  Naturally, managers find it difficult to distinguish between performance and potential.  The problem with this is that current performance does not necessarily predict success in future leadership roles.  As a result, the high potential pool ends up comprising of current high performers, possibly overlooking those with skills to lead your business in the future, but who aren’t flourishing in their current role; perhaps those who aren’t the best ‘technical’ specialists.

Kiddy’s definition of potential is having the ability, drive and desire to hold successive leadership positions.  A rating of potential gives an indication of the speed at which an individual can move into future roles and perform at a high level. It’s not about comparing one individual with another – because participants start at different levels in the business. Potential is context specific, something we refer to as Organisation Headroom (see table below). If you’re lower down the organisational hierarchy there are more roles above you that you might show potential for, so you have more headroom. If you’re one level below the CEO, your headroom is limited so you almost, by definition, can’t show a great deal of potential. This works horizontally too; if you can only move up in your functional silo you might have potential but arguably not high potential.  Typically, high potential means an individual can be picked up and dropped more or less anywhere in the organisation at the next level up and get up to speed more quickly than others.

What factors should be considered in relation to potential and how do we assess them?

Assessment of individual commitment, career aspiration & mobility
In-depth interview conducted by a business psychologist with the participant about their role, ambition and mobility
Leadership competency assessment
Behavioural observation in a stretch-level simulation designed to assess the competencies required in the future role, Watson Glaser critical thinking test score as an indicator of fast/slow realisation of potential
Organisation Headroom
Current level of the participant in the business and scope for growth from that start point
A systematic review of the organisational structure and scope/number of level moves in relation to the individual’s will and skill.

In an assessment context, stretch-level simulations contribute towards an understanding of potential by providing an indication of an individual’s future capacity, avoiding conflation with current job performance.  If an individual performs well on a stretch simulation but are considered to be underperforming in their current role, it may be that the current role doesn’t align with their aspirations and/or strengths, for example.  This highlights the importance of implementing an objective, data-driven assessment process that’s designed to assess the qualities identified as determinants of successful future leadership in your business.

To hear more about Kiddy’s Leadership Strategy, Assessment & Development services, get in touch using our contact form or by calling us on +44 (0)20 7399 7460

[1] Chamorro-Premuzic & Pillans (2016). Assessing Potential. Corporate Research Forum.

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