Who's a High-Potential Employee? Agreement Remains Elusive, Study Finds

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By Martin Berman-Gorvine

May 13 — There is little agreement on how to search for, assess and train employees with a lot of leadership “potential,” according to a report released May 8 by the Talent Strategy Group.

Over one-quarter (28 percent) of 134 companies surveyed in March and April don't even have a company-wide definition of potential, according to the report by the New York City-based Talent Strategy Group, which describes its business as “to radically simplify the talent practices of large, global companies.” (However, more than one-third of this group said they were in the process of producing or revising a definition.)

Of those companies that did have a definition of potential, 39 percent used that of the Corporate Leadership Council, 31 percent used Korn Ferry's, other consulting firms' definitions drew 7 percent or less apiece and 36 percent responded that “we don't use any of these models.”

The four most popular factors used to assess potential were learning agility (62 percent), ambition (perhaps surprisingly low, at 51 percent), near-term mobility (43 percent) and values (42 percent).

There was considerable regional variation in this regard, with 67 percent of the North American companies (which made up 78 percent of the respondents) stressing learning agility, compared with only 47 percent of European companies; 53 percent of the North Americans, but only 47 percent of the Europeans, viewing ambition as important; 68 percent of Europeans, but only 33 percent of North Americans, looking to values; and 42 percent of Europeans, but just 18 percent of North Americans, emphasizing emotional intelligence.

When asked how on-target their predictions of an employee's potential were, the average self-reported accuracy was only 52 percent.

“There are no scientifically proven predictors of potential except for intelligence and certain personality factors, but that hasn’t stopped consulting firms from developing models that purportedly ‘predict' potential,” Marc Effron, president of the Talent Strategy Group, said in a May 12 e-mail to Bloomberg BNA. “Human resource leaders are adopting these models hoping that they will improve their company's ability to better understand which leaders can move farther and faster than others.

“The fact that many of these models both conflict with each other (in terms of what they say predicts potential) and often overlap with intelligence and personality factors adds to the confusion about their validity,” he added. “This overlap means that these assessments can provide a helpful data point when making decisions about leaders, but human resource executives should pay at least as much attention to the capabilities their company will require in the next three to four years. Those capabilities, and how well a leader fits with them, will likely predict potential for success as accurately as any test.”

To contact the reporter on this story: Martin Berman-Gorvine in Washington at mbermangorvine@bna.com

To contact the editor responsible for this story: Simon Nadel at snadel@bna.com

The report can be downloaded from http://www.talentstrategygroup.com/application/third_party/ckfinder/userfiles/files/NTMN%20Potential%20Study%202015.pdf.