Identifying high potential candidates and planning for succession: Current trends

When the War on Talent was published in 1998, talent managers and IO Professionals put winning that war on their agenda for the organisations they serve. In the years since its publication, identifying high potential candidates has never been more important.

Now more than 20 years since the article’s publication, we see the talent landscape shifting in response to emerging technologies and the ever-changing nature of work. Such changes will challenge talent professionals yet again to innovate their practices in order to stay ahead of the curve.

Benefits of identifying high potentials

Numerous studies have shown that companies who spend resources on identifying, developing and retaining high-potential staff tend to enjoy better financial performance.

For instance, a recent study by Prof. Matthew Call and colleagues from Texas A&M suggest that inserting a star performer into a team can boost such a team’s performance by up to 15%.

One of the reasons for such dramatic effects is that highly talented employees act as positive role-models for their co-workers and serve as a benchmark for on-brand, highly functional behaviour.

In addition, high-potentials often represent the “vital few” of the Pareto ratio in an organization’s talent pool by contributing disproportionately to overall organizational outputs and performance.

While the benefits high-potential employees bring seem relatively clear, the pathway to selecting high-potentials is far more controversial. One piece of this puzzle is understanding what drives the need for improved talent management practices, especially when managing high potential employees.

Current drivers behind high potential talent management

The need for highly talented, well-suited employees has been constant across the decades, but what has changed is the landscape such workers will have to thrive in. In addition, new skills and competencies emerge as technology advances and becomes more integrated into the everyday world-of-work.

A recent cross-industry survey conducted by McKinsey suggested three primary drivers of talent management processes focused on high-potential candidates:

1.     The rapid allocation and movement of talent across projects as and when needed

2.     The need to match engagement strategies to talented employees

3.     Alignment with the business’s strategy and goals

In addition to the three drivers mentioned above, the study also identified the increased formation and use of cross-functional teams as a key differentiator for organisations.

In a fast-changing environment that prefers a more flexible, task-oriented approach to work rather than a more static reality, the management and appropriate development of high potential employees become imperative for strategic people functions and IO Practitioners alike.

Given the drivers mentioned above, the question of how to identify such employees should be on the strategic agenda for any talent management function.

Problems in defining high potential

It may seem obvious, but there is by no means consensus on what high potential really is.

Many high-potential identification processes unfortunately contribute to this confusing state of affairs by promoting a generic approach to high potential. The primary assumption of such models is that high potential candidates are universally talented and show potential for any position they may find themselves in.

This may, in part, be due to the robust findings in science concerning the predictive validity of cognitive capacity, problem solving ability, and measures of g. Indeed, these factors have been found to be general indicators of job performance across stable periods of people’s lives. But this is not the whole picture.

Research on how competencies interact with job-specific criteria show that there is incremental validity to be gained in considering specific competencies as well. Given such research findings, it seems more likely that individuals will show high potential for very specific competencies and hence, very specific types of jobs.

The correct question is therefore not to ask, “What does high-potential look like?” but rather, “What does high-potential for this job, inside this organization look like?”

The notion of universal high-potential is largely a myth, a particularly unhelpful myth for IO Professionals who wish to serve organizational objectives.

High potential as contextual and multifaceted

Once high-potential is seen as contextual and related to specific tasks, abilities, skills, and behaviours, talent identification and management processes can become more focused and targeted in their approach.

As with most assessment tasks, getting as close to the job as possible is a vital prerequisite for accurate selection of the right candidates. In addition, understanding what on-brand behaviours are required for success will also aid the IO Practitioner in understanding the context within which high-potential employees may have to function.

At TTS, we see high-potential as a multifaceted feature of the talent and succession landscape. For instance, to have high potential for a particular job (i.e. high-potential for what?), candidates often require actual skills and experience relevant to the job or job-related activities.

But skills and experience are only part of the whole picture. High-potential also includes a fit to specific competencies required to perform well and succeed in that job and in the organisation. In addition, high-potential candidates often need solid thought, motivational, and emotional foundations on which to build their career trajectories.

Fortunately, all of these facets are measurable in scientifically-defensible ways, a topic that we’ll turn to in our next article.

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Call, M. L., Nyberg, A. J., & Thatcher, S. M. B. (2015). Stargazing: An integrative conceptual review, theoretical reconciliation, and extension for star employee research. Journal of Applied Psychology, 100 (3), 623-640.