By Steve Hrop
A few years ago I was in a meeting with Jerry (not his real name), the Chief HR Officer at a large financial services company. We were discussing how to identify high potential leaders from across the company to participate in an executive development program. Jerry asked me to explain the difference between a “high potential” leader and one who has demonstrated a consistent track record of exceptional performance over the years. This was partially a trick question since he believed that anyone who fit the latter description was by definition a high potential and found it hard to imagine any meaningful difference between the two types of leaders. Yet the differences are significant.
As noted in a recent Harvard Business Review article (“How To Keep Your Top Talent”; HBR, May 2010), only about 30% of high performing leaders have significant advancement potential. Put another way, 70% of high performing leaders do not qualify as “high potential”! What this suggests is that a track record of high performance is a necessary, but not sufficient, factor in determining which leaders are high potential.
A clear picture of the other factors is beginning to emerge. Research by the Center for Creative Leadership and other organizations points to the importance of Learning Agility. Among the core elements of learning agility are:
- Intensely inquisitive
- Learns from mistakes
- Seeks and uses feedback
- Open to viewpoints that differ from his/her own
- Willing to step outside his/her comfort zone
Those who read my last blog about leaders who cross-the-line ethically will notice that these descriptors are a virtual mirror image of those that characterize leaders with a predisposition to cross the line.
In addition to learning agility, the following factors are core elements of advancement potential:
- Resourcefulness (ability to solve problems and overcome obstacles of a non-routine nature; this factor is a first cousin of learning agility)
- Reserve Capacity (a good analogy is two college students studying for the same test; both achieve an “A”, but one required many more hours of study than the other; same result, but vastly different expenditures of time and energy).
- Ability to think cross-functionally beyond his/her functional “center of gravity”; this ability is at the heart of being an effective general manager
- Has an intense “outside-in” perspective
- Possesses an extended mental “time horizon” (i.e., the ability to anticipate potential issues and conceive of potential opportunities that lie beyond the current fiscal year)
- A high level of career “aspiration”; many leaders with an exceptional track record of performance and financial success reach a point in their career when they’re no longer driven to make the sacrifices needed for continued advancement up the pyramid. Companies that have big plans for such executives often are caught off guard when these leaders turn down a big promotion, wreaking havoc on the organizations’ succession plans. The moral here is that companies cannot view high potential leaders as pawns on a chessboard.
Some skeptical readers will note that a high percentage of promotional decisions do not utilize such objective criteria, but are based on more dubious factors, such as:
- Being effective at “managing up” (while being viewed much less favorably by peers and direct reports)
- Having the right “sponsor” in high places
- Able to talk a good game (e.g., someone who shines in meetings and presentations attended by higher level executives, but is mediocre in terms of day-to-day performance)
- Looks the part (“He’s tall, confident, articulate, and well-dressed, so he must be a real leader!”).
If you think that last point is an exaggeration, consider the following true story: several years ago I was in a talent review meeting attended by a company’s senior leadership team. One of the attendees, a business unit president, stated that his test of whether or not someone is a “real leader” is a person who can walk into a room full of people he doesn’t know and command their attention by force of his charisma and bearing. Beyond the naiveté, the fact that this executive exclusively used the “he” pronoun to define a real leader is a telling point.
For those companies eager to enhance the accuracy of their high potential identification process, the best solution is to supplement subjective ratings of potential with more objective methods, such as leadership assessment tools designed to prevent rating inflation and “halo effect” results. PRADCO’s online assessments (e.g., our Emotional Intelligence Index) use a forced choice response format that virtually eliminates these types of rater distortion. Also, 360-degree feedback processes designed with the right safeguards can yield important insights into advancement potential. Lastly, certain kinds of simulation exercises can add significant value to the talent identification process.
Posted by PRADCO 
