High Potentials: Making The Best Even Better

Thursday 18 October, 2007

(Author Credits)

The results a company gains from developing a high potential employee, far outweigh the risk and cost of continuously hiring individuals from the outside. These types of programs require time, commitment, and money to be effective. But, companies will enjoy the returns from their investment for years to come.

Building a high-performing team is an aspiration of most managers, but all too often, achieving that goal requires them to primarily focus on the employees who are low and average performers. This can drain managers of the time and energy that could otherwise be spent inspiring those employees who are already driving long-term, sustainable results for the team.
So, who are these people that can dramatically affect a company's bottom line? Known as "high potentials" (HIPOs), these individuals are an organisation's future leaders because they have the "total package".
Defining high potentials (HIPOs)

• They are highly knowledgeable in their field and open to taking on new tasks;
  
  
• Willing to take risks to accomplish business goals;
  
  
• Demonstrate vision and work for results;
  
  
• Foster teamwork and build strong relationships, with their peers and subordinates, as well as managers.
  
  

Many organisations have a "if it isn't broken, why fix it" viewpoint when it comes to their high potential employees, believing that training and coaching are not necessary because they are already doing so well.
While many HIPOs indeed do well without much guidance, consider what would happen if companies switched their focus from addressing the needs of the masses, to actively developing the top 10 to 20 percent of their workforce? Would such attention push top performers to be even more successful? Would it boost the performance of employees who are either meeting expectations or falling short?
Before these questions can be answered, we first need to answer the question: "Should you - or shouldn't you - tell employees they have been identified as HIPOs?"
Tell them they are a high potential employee
Answers to the "should you - or shouldn't you" question are decidedly mixed.
A benchmarking study by the Center for Organisational Research revealed that 54 percent of participating companies do not tell employees they have been labeled as high-potentials, while 46 percent do.¹ Reasons for not telling often include:

1. setting expectations you cannot keep,
   
   
2. using a high-potential status as a bargaining chip, or
   
   
3. "kicking back" on the current job (now that a promotion is in sight).
   
   

There can be valid reasons for not telling, but the overall benefits of revealing an employee's high-potential status outweigh the risks. Just telling candidates can be an effective retention strategy in itself. According to a study of 225 corporations across ten major industries, 69 percent of companies experienced improved retention once HIPOs learned of their status. In that same study, 57 percent of the firms interviewed saw an improvement in productivity.²
Identifying employees as HIPOs can open the door to frank, productive discussions about the areas where they need to grow. Such feedback can now be given in a more concrete context for assessment and development, which will likely foster their development.
Naming high potentials, and making the criteria for selection public, also gives other employees a tangible goal to achieve HIPO status. It also empowers employees to take charge of their own development and careers.
Creating programs that make the best even better
Since training within an organisation is generally directed at helping the average performer improve, creating development programs specifically directed at high potentials is a paradigm shift in thinking.
As with other training and development programs, tying the objectives of a HIPO program to the company's business strategy is key. To ensure alignment, it is critical to set a proper foundation for the program by identifying selection criteria for HIPOs, developing a communication strategy and creating a process to evaluate effectiveness and facilitate continuous improvement.
Once the foundation is in place, focus on how to make the HIPO program an effective means of attracting, retaining, and motivating top employees. A successful program typically integrates:

1. A development strategy (that builds core competencies), and
   
   
2. An organisational strategy (that enables high performers to do their best work).
   
   

A development strategy that effectively builds core competencies typically includes the following elements:

1. Mentoring and/or coaching that allows HIPOs to learn from select employees or experts
   
   
2. Lateral assignments/projects that transfer learning in the workplace
   
   
3. Stretch/overseas assignments that challenge and provide a catalyst for growth
   
   
4. Formal training through external or internal programs
   
   

To encourage high performers to do their best work, an organisational strategy should include:

• Performance-based compensation - Organisations that base their compensation on seniority versus performance will find it increasingly difficult to keep top talent, particularly young talent. A variable compensation plan that differentiates pay based upon performance will promote excellence, while rigid plans tend to lead to an "average" workforce.
  
  
• A flexible culture - Flexible schedules and the opportunity to telecommute are just a few ways companies can give hardworking employees added freedom to perform their jobs.
  
  
• Re-training or terminating employees whose performance does not meet performance standards - Tolerating sub-standard performance can negatively impact the retention of high performing employees.
  
  
• Opportunities for "ownership" - Allowing HIPOs to have full responsibility for an area of the business - small or large - is key to personal development and builds strong ties to the company.
  
  

Focus on execution
As with any new or re-vamped program, there is always the risk that a HIPO program will fail, or at least not generate a high return on investment. While many factors can affect the overall success of a HIPO program, one, in particular, seems to rise to the top of the list time and time again: execution. Some of the main reasons why programs fail include:

• Companies confuse high performance with high potential - A person can be a high performer and not be a HIPO. Understanding this balance is critical. "Performance" measures how an employee is achieving results in their current position. "Potential" measures the capability of an employee to perform at a higher level within the organisation. Many times companies assume the best performers make the best leaders, but this is not always the case.
  
  
• The program is perceived as a secret society for management's "friends" - The criteria and objectives of the high potential program must be well defined and communicated openly to gain employee buy-in.
  
  
• Human Resources becomes the designated champion - The champion for the program should be the CEO or a visible business leader.
  
  
• The lack of results - If the HIPO pool is not used to fill leadership positions within the organisation, then the program is not satisfying the company's needs and confidence will be lost.
  
  

Society as a whole celebrates talented individuals and encourages them to receive additional training and development to achieve greater results. The same should be true in business.


Source:ceoonline.com