Why Are We So Afraid of Potential

Seonaid Charlesworth Article

At a recent event in Toronto, I spoke with my colleague Tammy Heermann on how to identify and develop talent for high potential programs. It was part of a speaker series hosted by LHH Knightsbridge for HR leaders. I talked about how to choose the right people for these programs, based on leading practices from global companies. Then Tammy described how to design a world class high potential program to best suit the participants and their level in the organization.

The audience represented organizations that spanned every major industry, and every one of them had a high potential program. They had similar goals for these programs and used similar activities in their programs. But another thing was similar among these companies that really stood out for me. 

Every company used the same technique for selecting their high potentials: Manager Nominations. In other words, all of them relied on managers to nominate people for their high potential program.  Only a handful of those who attended used any assessment or another objective way to validate potential.

The unfortunate truth is that manager nominations do not predict potential. Decades of research has shown us that manager nominations do not correlate with how far people will progress in their careers or how effective they will be as leaders. In 1998, a large study published in Personnel Psychology showed that the ratings managers give say more about the manager than they do about the person being rated. This study was followed up by two others in 2000 and 2010 that had the same finding.

The most common reason for using manager nominations is convenience. There’s no cost to asking managers who they’d recommend to be part of a high potential program. And by asking managers for their nominations, you immediately gain managers’ interest in and buy-in to the program. 

A troubling concern is that the data provided by managers in their nominations isn’t about potential at all. Instead of telling you who has potential, their nominations tell you who the high-performers are, who is well liked, who manages up well, and who they can’t afford to lose because of their specialized or institutional knowledge. And wait, the story gets worse. Some managers put nominees forward simply because having people in the program makes their function or division show better.

This approach, however, creates a real conundrum for high potential development. The gap between who gets nominated and who has real potential matters. When you choose people for high potential programs using only manager nominations you end up with:

  • big differences in the learning needs of people that are hard to meet with a common program;
  • peers who are poorly matched to support each other’s growth and careers;
  • difficulty showing a return on investment in developing high potentials; and
  • lack of diversity in the program. Let’s face it, senior leaders are still more likely to be white males, so the “just like me” bias will cause them to choose more white males for the program.

I came away from this event excited about how companies are investing in developing our future executives. But I was also confused about why we aren’t further ahead in using accurate and consistent ways to identify potential in people. If science has shown us that managers aren’t good judges of potential, why do we keep asking them? Why haven’t we tried better ways to assess potential?

I believe that we don’t assess potential, because we are afraid to know. Knowing about potential means actually having to make informed decisions about people. Instead of leaving it up to the managers, you have to have the courage to say that someone with potential was overlooked. Or that someone who has been a strong performer isn’t suited for the challenges ahead. Once you know, you have to do something with the information. Those choices aren’t always easy.

I’m interested to know what you think is going on here. Do you think it’s important to know people’s potential? What’s holding us back from more accurately identifying the people with the greatest potential to lead our organizations and helping them to live up to their potential?

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