Top talent. High performance vs high potential. There is a difference.

When it comes to talent, an enduring challenge for organisations is identifying their ‘high potential’ employees. 

However, when embarking on this mission, one area that can get super fuzzy is the difference between ‘high performance’ and ‘high potential’.  Furthermore, without clarity on this at the outset, you are at serious risk of your talent or high potential initiatives failing before they've even got off the ground.

What is high potential?

Let’s start with a couple of definitions:

• High performance:  The ability to consistently achieve results that meet or exceed expectations.

• High potential: Not surprisingly there is less agreement here. Practically, from a HR perspective, high potential is often described as “the capacity to step into a role that is two levels or more above the one a person currently holds. 

However, if we go beyond this quite tactical frame, what we see is that those with true “high potential” bring 91% more value to an organisation. What’s more, in comparison to their peers, they exert 21% more effort (Gartner).

With that kind of potential impact on the success of a business, you can see why identifying high potential talent is such a key business imperative.

The performance-potential paradox.

Martin and Schmidt (2010) noted, the old saying “past performance is the best predictor of future performance” may be true for lateral shifts with similar requirements, but it is not necessarily true for promotion into positions with very different requirements.

Although performance and potential often trend together, employees may sometimes under perform because they are not sufficiently challenged by their current work. In other instances, excellent work in current roles may represent an employee’s maximum potential, and they may fail at higher levels of responsibility. Researchers refer to this as the performance-potential paradox (Church & Waclawski, 2009).

Put simply, you cannot assume a high performer has a high potential, for three key reasons.

1. When it comes to high potential, past performance is not the best predictor of future performance.

As alluded to above, as well as illustrated in the thinking behind books such as the Leadership Pipeline, you can't assume that the skills, mindset and capabilities that made someone successful in their current role, are going to be the skills, capabilities and mindset that will make them a success in a future role. In fact, I can pretty much guarantee they won't be. Case in point, the number of technical specialists I see being promoted into management positions, based on success in their current role, rather than because they’ve shown any aptitude (or interest) in leading others.

2. The myth of ‘the cream always rises to the top’.

When it comes to identifying high potential, many organisations work on the premise that ‘the cream will rise to the top’.  I.e., one way or another your high potentials will inevitably make themselves ‘known’.  It’s a myth.  In reality, within in any organisation there could be a whole raft of hidden talent or ‘hidden gems’ currently unable to show what they are capable of. 

Whether that be due to them being held back by their gender, ethnicity, orientation, culture, personal style – or even just due to being in the wrong role, have the wrong manager, or even working for the wrong organisation.  Regardless of the cause, it’s a huge missed opportunity when these ‘hidden gems’ are overlooked and it’s a dangerous assumption to base a talent strategy on.

3. An over reliance on manager ratings and algorithms. 

Finally, our tools for assessing performance and identifying top talent aren't always that reliable. Line manager ratings are notoriously biased, and techniques such as 9 box grids are also similarly unreliable unless used properly (most aren’t). It also assumes that an individual had the optimal conditions to demonstrate what they are capable of over the preceding 12 months. 

Calibration meetings can help address some of these biases and make the process more robust, but they can’t address the issue of hidden talent.  Worse, the approach just further reinforces the base assumption of high performance as a predictor of high potential.

In conclusion, conflating high performance with high potential is a dangerous fallacy. 

There are just too many variables at play to place any faith in the assumption that your high performers will also be your high potentials. 

Ultimately, spotting high potential is about being able identify those that are capable of making a disproportionate impact on the business at some point in the future, which is not set yet.

So, whilst knowing who your top performers is useful, when it comes to identifying future talent, begin with your organisation’s strategic objectives to answer the question 'potential for what?' and start from there.

Find out more…

If you would like to know more about high potential and the services Psychology Works offer in this area, please don’t hesitate to contact us.

In the meantime, if you’ve enjoyed our musings on talent and high potential, why not check out some of our other blogs and thought pieces.  For real time updates and insights you can also find us on LinkedIn, our social media platform of choice: @PsychologyWorks and @mariagardner.