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Critical Elements of a High Potential Development Program

April 14, 2014

This article was inspired by an article by Eugene Burke, a chief scientist and analytics officer at The Corporate Executive Board Co., a member-based research and advisory firm. His article was posted in Talent Management Magazine.

high potential employee developmentAccording to Burke, despite growth in high potential programs, turnover among these employees remains high. As unemployment statistics continue to drop, it is likely companies that are not intentionally addressing this issue will see more turnover. For those companies, revenue and profit growth are at risk.

Recent research from The Corporate Executive Board Co. shows that organizations with strong bench strength have double the rate of revenue and profit growth compared to peers with weaker bench strength. Meanwhile, separate CEB research shows that turnover for existing C-level positions has been rising for the past few years, suggesting an increased need for high potential development programs.

Simply offering a high potential program, however, is not indicative of future business success. While these programs make sense in theory, many are failing to deliver results. In fact, according to a 2013 CEB study, more than half of these employees will turn over in a five-year period. Of those who stick with the program, a 2012 CEB study found that nearly half do not meet business objectives in their first leadership assignment.

Although many high potential programs are in need of repair, there are organizations that are realizing significant returns on their investments. Based on various CEB research studies over the last few years, and my work with leading organizations, there are key elements that ensure a high potential development program returns a measurable ROI, keeps key talent engaged and retains them for future roles.

To ensure high ROI and protect the organization from theft of high potential talent, consider the following key elements:

1. Define “potential” clearly. Many organizations confuse performance with potential. Performance is certainly one ingredient. Poor or mediocre performance is easily identified. Identifying employees who have a strong record of high performance is an important step in identifying them as high potential but performance can not be measured in a vacuum. Assuming that high performance is equal to high potential puts the odds at six-to-one that the employee will eventually fail, CEB research shows. A better metric for identifying potential is based on “how” the individual creates results. Within an organization, you need a definition of the “high potential” designation for three levels: 1) senior managers (director and above)  2) managers (below director level) 3) non-managers. Define the key accountabilities and soft skills necessary to be designated as “high potential” for each of these levels.

2. Recognize that employees need more than strong performance in their current role to succeed in future roles. High potentials may display various levels of key high-potential soft skills every day. These include personal accountability, self management, interpersonal skills, influencing others and goal achievement.  In most organizations, high potential identification has been focused predominately on goal achievement. Burke suggests “high potentials need to have the aspiration to rise to a more senior role, the ability to manage and lead effectively, and engagement levels that show commitment to their organization.” While Burke’s definition is a classic definition for the top two levels, this more narrowed focus may miss out on high potentials in the third level (non-managers). For non-manager high potentials, the ability to manage and lead effectively doesn’t fit. However, the five key soft skills can be observed. Observation is the first step to identifying high potential, not the last.

3. Measure potential objectively. Only one in three organizations use assessment data to identify employees for high potential programs, and nearly half lack a methodical process for identifying and developing high potentials, according to CEB research. But to most accurately measure potential, the successful organizations use systematic assessments of an employees’ aspiration, ability and engagement. Rather than relying on subjective assessments, nominations or evaluations, these organizations ensure fair and valid identification of high-potential talent through scientific assessment such as TriMetrix HD, a multi-science assessment that scores 25 soft skills (including the 5 key skills mentioned above), 6 motivators, 12 behavioral traits and dimensional balance for situational awareness and problem solving. Using a quality assessment such as TriMetrix that accurately identifies the full talent of the person (current state and potential) enables objective evaluation and discussion about their development needs.

4. Include retention objectives and investment protections. High potential employees are highly marketable — they are strong performers and are often confident they can find work elsewhere. Therefore, organizations that seek high returns on their high potential investments proactively mitigate flight risk among these employees. More progressive organizations have retention clearly defined in the high potential development objectives. How this needs to be addressed is based on the situation. For example, for managers or senior managers, funding the high cost of an executive MBA program at Northwestern’s Kellogg School of Management  may include a letter of agreement that “should the individual leave employment within 5 years, they agree to repay the company for the full amount of the program cost”. On the other end, for non-manager high potential programs, the program design should focus on development of soft skills that typically are associated with turnover such as resiliency, self management, conflict management and continuous learning.

5. Design cost-effectively for the individual. High potentials in larger organizations typically have more work than they can handle – and they keep getting it done. Any program must take into account the need for a high ROI on their time. Post-program survey questions will reveal how much they valued the time invested. Many high potential programs look good on the surface but fail to meet the individual participants’ needs. Giving high potentials stretch assignments is common but must be orchestrated with their development needs and career direction. Integrate assessments to provide a talent-job soft skill gap analysis (requires profiling the job) that focuses on identifying the individual’s needs and goals for the coaching. A high potential program based solely on differentiated job assignments and attending the latest corporate training program(s) such as a 5-day Becoming a Manager workshop seems to consistently receive mediocre marks from individual participants. A more effective approach is to integrate 1:1 high potential coaching with specifically designed programs at the beginning and end of the program duration (an opening and closing two or three days). Packaging group learning content with 1:1 coaching allows the organization to offer a program that would cost much more if delivered as independent component offerings. For example, the TriMetrix assessment debriefing is a 4 hour exercise when done within a coaching context. By delivering the assessment debriefing as part of a high potential cohort’s opening session agenda and building in some interactive exercises for the group within the debriefing, you are able to create a powerful group session and be cost-effective. Designing and integrating the group programming and 1:1 coaching around clearly defined objectives and aligning personal development (self-awareness, role effectiveness and organizational influence) to the objectives –  will provide much greater economies of scale and ensure high ROI for the individual.

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