High Potential, High Risk
Author: David B. Peterson, Ph.D. (Reprinted with permission from Society for Human Resource Management.)
Posted: July 8, 2008
Words of Wisdom
"In any organization, there are ropes to skip and the ropes to know."

R. Ritti & G. Funkhouser

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?

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.

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 also were 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.


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, even if they get the results their bosses want to see.

Other derailment patterns include leaders who have brilliant ideas and solutions but aren't consistent in being able to implement their ideas through others.

Managers should be mindful of how they treat high potentials in two particular areas. First, managers need to recognize that most top performers are rewarded for their results, not necessarily for the manner in which the results were achieved. If two top performers achieve the same result, they are often given the same reward, even if one achieves it through building and aligning a team and one achieves it by pushing with brute force. In fact, the more forceful individual, who apparently succeeds quickly by working on his or her own, is sometimes given greater rewards and encouragement than the team builder who learns lessons that will have even greater value in subsequent roles.

Second, top performers generally consider their work style to be effective. Even if their role changes, they are often averse to changing or modifying their behavior. They have received high praise and recognition for performance and understandably believe that they will be most effective if they continue to follow that approach.

These traits that suggest possible derailment are not necessarily problems as much as they are clear indicators of exactly what an individual needs to be coached on to be successful at the next level and beyond.

Provide Proper Training

To ensure that high potentials reach leadership ranks, managers need to work with employees to decrease the risk of derailment and create plans that foster development of needed skills and behaviors.

There are four steps managers can take to decrease risks for derailment:

  • Accurately identify high potentials in your department.
  • Provide clear expectations in terms of valued behaviors.
  • Provide individuals with specific feedback on how well their performances and their behaviors (what they do and how they do it) meet expectations.
  • Make sure rewards such as promotions and bonuses don't send mixed messages. Reward high potentials for both the results and the methods used to achieve the results.

High-potential leaders often advance quickly and may not learn some of the basic lessons that others learn simply from having more time in each position. That's why it's important to be explicit about expectations and styles with fast-rising leaders.

When current leaders take the time to measure and identify high potentials and work with each individual to create a custom development plan, these individuals can transform potential into realized leadership performance.

David B. Peterson, Ph.D., is senior vice president and practice leader at Personnel Decisions International's coaching services in San Francisco.