High potential, high risk: traits that indicate high leadership potential can also derail a career

HR Magazine, March, 2008 by David B. Peterson

Most managers have heard from their company leaders that leadership talent is--or will shortly be--a scarce resource. They also have heard that it is the responsibility of every manager to help the organization prepare for the future and groom tomorrow's leaders.

To prepare, most companies invest in identifying and cultivating high-potential employees--talented, bright individuals who exhibit the right blend of skills and behaviors indicating their potential to move up in the organization and perform effectively as leaders. This practice is essential but not always well-executed. So, what is the best way to develop "high potentials" into leaders? What should managers do to ensure that high potentials stay on track?

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High Potentials' Value

First, managers need to understand the true value of high potentials and know why it is so important to invest time and energy in developing this group.

Demand for top talent is soaring. Most companies are differentiated by the talent and leaders they have. With the retirement of the baby boomer generation and noticeable skills gaps in many areas, companies are losing leaders faster than they can replace them.

If senior leaders are unable to compete in recruiting and retaining top talent, they often are unable to execute initiatives and strategies. A company that lacks sufficient leadership may, for example, be unable to expand into valuable markets when opportunities arise.

The benefits of developing high potentials are great for both the employees and the organizations. Employees learn how much the organization is invested in their continued successes and career development, increasing loyalty and making the individuals feel valued and motivated to stay engaged and productive. The organizations benefit by having the right talent available to achieve long-term strategies and goals.

Every tactic needs talent to make it possible. Often, the pools of high potentials contain the candidates most likely to be capable of filling new roles--given the proper training, experiences and preparation.

Identifying High Potentials

Many managers struggle to identify their high potentials. Do they base their assessments on current performance? Intelligence? Drive and determination?

The most common misidentification of high potentials results from confusing high performance with high potential. Not all top performers have the potential to succeed at higher levels. A manager of a small team may produce great results, largely through being technically gifted and intimately involved in the team's tasks. If asked to manage a division with multiple teams working in diverse areas, however, that same manager may have neither the skills nor the desire to successfully manage the team leaders.

Clearly, current performance is an important consideration; it's rare that marginal performers will be classified as high potentials. But managers must also sort through external factors that impact success, such as market conditions and competitive challenges. Better yet, it's important to find people with track records of success in a variety of situations and business climates. In fact, the greater the number of challenging situations a person has encountered successfully, the greater the chance that he or she has learned valuable lessons that can fuel future performance.

High potentials also need the right motivations and drive, such as wanting to work with and through others, having an interest in financial data, and being comfortable with power. Being smart is important: The higher a person goes in an organization, the more likely he or she will encounter complexity and overwhelming amounts of data that must be assimilated quickly.

Ironically, some of the qualities most indicative of high potentials also can signal potential performance problems.

In a recent study conducted by Personnel Decisions International, 27 percent of individuals identified by their bosses as high potentials were also identified by the same bosses as having a high risk of career derailment--a likelihood that the person would fail in a specific role because he or she reached a plateau of performance, quit or was fired. This means managers believe that one of every four high potentials may never reach his or her potential.

Proper identification of high potentials requires a full assessment of an individual's capabilities, behaviors and fit with organizational expectations. These robust measures also make the identification of high potentials a more objective process. A well-liked individual may not make the best leader. Or, people with minimal interaction with nominating bosses may have leadership potential but little visibility to showcase talents in their current positions.

Derailers

The most common profile for high-potential leaders likely to derail is someone smart, driven and accustomed to pushing through obstacles to meet ambitious goals. This same hard-driving, risk-embracing style that gets leaders noticed for high performance also can cause them to experience problems with their colleagues. They are more likely to derail at some point if they don't learn to show respect for other people's perspectives and to incorporate other people's opinions to gain their commitment.