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Home Day-to-day Issues Succession and Workforce Planning Why is the issue of ‘high-potential’ employees so critical?

Why is the issue of ‘high-potential’ employees so critical?

In certain organisations, the issue of identifying high-potential employees – or 'high potentials' – is very emotive because when you label someone as a high potential, you subject them to a number of consequences. For example, you run the risk of alienating them from their peers or could even (effectively) be putting a target on their backs – from a competitive point of view – if this information is made public. It's tragic that when identifying high potentials, organisations often overlook these unintended consequences. Why?

Many reasons why it's critical to identify high potentials can be found in the challenges organisations are having with their own internal leadership pipelines. Said David Conradie: executive head of the Top Talent Solutions Institute at the recent IPM Directors Leadership Summit: "We find that a lot of leadership programmes fail to produce the kind of capability and talent that they were started to drive. We find a lot of designated, high potentials who don't realise what expectations have been attached to them. A lot of it comes back to the issue that we don't identify high potentials correctly and we unfortunately sometimes look for them in the wrong places."

High-potential programmes don't exist in isolation

These programmes need to be aligned with the company's broader strategy, says Conradie. A high-potential programme is not something you undertake in your company because it 'looks like a good thing to do'. A successful high-potential programme is hard work and is something that you need to manage on an on-going basis.

Talent paradoxes are driving high-potential programmes

A 'talent paradox' is a situation – like the one we're experiencing in South Africa at the moment – where you have a skills shortage compared to a massive unemployment level. One of the challenges we're facing - when it comes to leadership talent – is that there are a lot of leaders in organisations who have the title of 'leader' but are not high potentials. These people are high performers, which is why when individuals at the CEO and executive level resign there's increasingly a 'mad scramble' to find a replacement who can safely guide the organisation into the future.

The reason for this 'mad scramble' is that succession – in these companies – has been a paper-based planning exercise in the past, says Conradie. In other words, the potential successors for an individual are identified but it isn't certain as to if these identified individuals actually have the potential to move into a leadership role.

Leadership talent is becoming a critical business issue for organisations

Sourcing leadership is no longer solely an 'HR problem' says Conradie. "Increasingly, investment companies are looking at an organisation's leadership strength and depth when they make investment decisions. In some cases, they're prepared to allocate as much as a 35% premium to organisations that have strong leadership.

Unfortunately, in practice many of the current high-potential programmes don't work.

"Most of the high-potential programmes are based on what's important for leaders today. You should be training your leaders on how to deal with challenges your organisation will experience in the future.

"There is a dire shortage of leadership capability. I think that this is one of the reasons why organisations are starting to look internally for talent. Leadership is often defined by context and a good leader in one context is not necessarily a good leader in another context," Conradie concludes.