Would you say that you have high potential? If so, is that potential general, or related to a specific job role? Would you further say that you have “untapped” potential? How do you know?
My guess is that you find the above questions rather difficult to answer. Potential for what? Potential as in motivation and drive, or as in skills and ability? It might seem odd that such an unclear term plays a central role in organizations, but nowadays it does: Potential is a key concept in talent management and succession planning. The most common way in which organizations define talent today is “high performance combined with high potential”. If you are in the HR business, or if you are a line manager for that matter, you are already well familiar with the matrix often used when identifying talents: One axis consists of performance and the other one of potential, and only employees plotted in the upper-right corner are considered to be talents. But with or without such an explicit rating, the view that organizations and managers hold about different employees’ potential will affect these employees’ career development and working life.
So what is potential, really? In a basic sense, potential refers to “the possibility that individuals can become something more than what they currently are” (Silzer & Church, 2009). It does not equal current performance, but rather implies that a person’s traits, drives, skills, and abilities can be honed in such a way that he or she might take on a different – usually more complex – role in the future. In other words, it is a forward-looking term. When used in organizations, it usually refers to a time horizon of somewhere between three and ten years. However, that is more or less where the clarity ends. Karaevli and Hall (2003) found that among 13 companies known for their advanced people management, there were 13 different definitions of potential.
For those of you who followed the series on performance management, you already know my mantra when it comes to evaluating performance: It is notoriously difficult. However, when evaluating something that happened in the past, at least we have quite a lot of data. But imagine judging something that has yet to realize in the future. It should come as no surprise, then, that companies usually have very elaborate criteria for evaluating performance – and very few and rudimentary ones for evaluating potential. Actually, the most frequently used method seems to be managers’ intuitive impression.
As always, danger lurks in ill-defined terms. Those concepts often tend to become scenes for taken-for-granted assumptions, stereotypes, and ill-founded decisions. Still, in organizations, we cannot settle for the truism that potential is complex and difficult to define. Real, concrete decisions still have to be made about who to promote, who to send to that expensive training, and who to prepare for a senior leadership role. Thus, we have to draw on the knowledge that we have about potential to at least try and make these decisions as fair and accurate as possible. Therefore, we will spend the next few blog posts diving into three important questions about how to assess potential:
- Potential for what? Is potential best seen as a generic or specific term? Should it be defined in relation to specific roles, or more as a general characteristic?
- Disentangling performance and potential. A number of studies have shown that managers, when assessing employees’ potential, have a strong tendency to slide back into considering performance. We will consider how to separate the two.
- Counteracting bias. Research shows that potential easily gets reserved for people who are similar to ourselves. But there are ways of countering this adverse impact.
Hopefully, we will walk out of this series somewhat wiser concerning the mysterious concept of potential.