What is I-O?

Identifying And Developing High Potential Talent:
A Succession Management Methodology¹

¹ The following article captures some of the key points covered in the workshop on this topic conducted by the author, Paul Van Katwyk (PDI), and Scott Gregory (Pentair Corporation) at the April 2000 SIOP Conference. 

One of the first and most frequent questions asked by clients when I-O practitioners engage in succession management consultations with them is: How can we identify our high potentials and how can we accelerate their growth? In todays rapidly changing and increasingly global business context, practitioners are finding that the answers to these questions are not quite as clear or simple as they seemed to be in the past. Talent pools are more diverse, organizations are more complex, and the competitive challenges business leaders face are more formidable today. This article outlines key steps to developing a solid answer to those important questions. 

1. Develop the Business Case for Collective Leadership Action.

Business leaders usually have an intuitive sense of the need to identify and develop high-potential talent, but they often do not grasp the real business impact of growing and retaining these critical resources. Therefore, they frequently underestimate the urgency and economic value of a deliberate and systematic process to manage high-potential talent on an organization-wide basis. Equally important, they tend to hold many different views and harbor many personal concerns that keep them from working together to develop the organizations high-potential talent pool for the good of the business as a whole. For example, many are legitimately concerned that if they make their best people more visible and marketable, they risk losing them and doing significant damage to their own bottom line. Unfortunately, in many organizations, there are pitifully few rewards and a plethora of disincentives for developing others.

The first step, then, is to help ones clients develop a clear business case for banding together and creating a common leadership agenda that defines the needs, goals, and rewards (individually and collectively) for a high potential development process. One way to do this would be to craft a marketing plan that identifies the individuals that need to be sold to, and how they can be sold on, the importance of agreement on a common framework for defining high potential, a consistent approach for assessing individual capabilities, and an effective plan for investing in development of the talent pool. The aim of such an approach is to create a positive coalition of committed leaders to sponsor and support the changesin their own behavior as well as in related organization support systemsthat need to take place. Following are some of the specific steps that a consultant or practitioner might take to make this happen.

• Muster the evidence and the argumentsarticulate the strategic business rationale, clarify the pros and cons for change, highlight competitive comparisons (e.g., benchmark with peer groups and respected companies), and gather financial impact data (e.g., cost of turnover, price of failure/loss, value-added of improved decisions and higher levels of performance).
• Motivate the individualsmeet with leaders one-on-one to size up the personal concerns and business priorities of each individual; and develop an appeal that speaks to both their rational and emotional needs.
• Mobilize the groupbring the leaders together as a group to review the evidence, examine the pros and cons of taking collective action, and come to agreement on a common process and agenda for action. 

2. Create a Common Framework for Defining High Potential.

Depending on where one is coming from and what one is aiming for, each of us has a different idea of what high potential means. The challenge in I-O work, then, is to achieve agreement among the key stakeholders on the particular definition and key criteria that will be used. All too often, forms are distributed that merely ask managers to identify their high potential people without providing any common context or specific criteria. As a result, the people identified represent a very mixed bag of capabilities, and the pool does not have sufficient organization credibility and support to merit significant attention and investment.

One way to tackle this particular challenge is by gaining collective understanding and agreement on the following three things:

Performance context. Before one can define what high potential looks like, the client organization needs to answer the question: High potential for what? More specifically, one needs to determine answers to the following questions: What ultimate roles and at what level in the organization will these folks be expected to perform; what particular business challenges will they be expected to tackle; what is the time frame they will be given to get up to speed?

Performance versus potential. Once there is a solid understanding of the target role and time frame, the next step is to clarify the real difference between performing the role successfully and having the right stuff or raw material necessary to grow into that position in the future. Unfortunately, some practitioners often gloss over this distinction too readily. As a result, they evaluate people either on a set of criteria that is too generic and therefore doesnt capture critical distinctions or on a set of competencies that are too specific and assume the individuals have already acquired the necessary skills. When these things happen, much high-potential talent is hidden or overlooked.

One alternative to this problem is to use a conceptual framework (such as the one below) to clarify and explore the distinction between the fundamental traits and capabilities that are early signs of potential and the more specific competencies that ultimately must be developed to perform successfully in the target role. Such a framework can also be used to identify the learning activities and challenging assignments that can serve as the catalysts through which these needed competencies are shaped and tested.

This exploration results in the creation of three key models or tools around which the high potential identification and development system can be designed: early indicators of potential, critical experiences for development, and competencies for effective performance.

Indicators of potential. Based on a review of the professional research on the factors that predict future leadership potential and extensive experience helping clients create specific criteria for their high potential talent pools, at PDI we have developed our own version of a checklist of key criteria (see Figure 2) that we use to make sure we examine and include all important factors that should be considered. This can easily be done by other practitioners for their clients as well. The checklist is useful, for example, in organizing the input gathered from business leaders regarding the criteria they currently use to identify high potentials. This helps them to see where their views and approaches are similar or different and gives them a meaningful and consistent language for appraisal and development planning. 

There are four key decisions over time that need to be made with respect to high-potential talent. These are (a) who has the greatest potential to develop, (b) what are their most important development needs, (c) who is ready in the near-term for a key talent/candidate pool, and (d) who is the best candidate for a particular position. Each of these decisions or questions should be tackled with tools that are best designed for each. One way to help the client answer these questions is to clarify their most critical needs and determine the particular assessment and development processes that will work best for each component of the overall talent identification and development process. Many consulting firms (such as PDI, RHR, DDI, etc.) have developed specific assessment tools and/or services for each purpose.

When the right tools and processes are used, much better decisions, more powerful solutions, and more cost-effective investments are made. Unfortunately, however, it appears as though business leaders, and even many professionals in the field, do not fully understand the differences in purposeas well as the relative powerof different assessment tools. For example, they often want to use a 360-feedback tool to select high potentials when such instruments are usually designed, and more appropriately used, for highlighting the development needs of talent pools that have already been identified through standardized tests or carefully calibrated assessment processes. Sometimes they use rigorous, costly assessment centers for the initial identification of high potentials, rather than using a special screening process to determine who is most appropriate and prepared for an in-depth readiness assessment.

Assessment and development centers are a good case in point. Such centers can be a very effective method of evaluating the overall readiness, as well as the key strengths and development needs, of a large group of individuals for a key role or candidate pool. They also enable meaningful bench-strength analyses and capability comparisons between work groups, talent pools, and business units within and across organizations. Although the developmental value of a center experience still can be quite significant, their predictive power as an assessment tool can be diminished when inappropriate or ill-prepared participants are sent to them. In these cases, for example, it becomes difficult to sort out whether poor performance is due to a lack of basic capacity or simply due to a lack of the requisite background experience needed to prepare for the particular challenges embedded in the simulations.

PDI surveyed the field to identify the resources available in the marketplace for each of these different purposes and sometimes had a difficult time discerning from the promotional literature the appropriate purpose and distinctive value of the different offerings. Many are promoted as all purpose solutions, when in reality they should be used for a more specific or limited one. It is the job of I-O psychologists to educate the public, particularly the business marketplace, on how to use the tools of our trade. Clearly, we have a lot more work to do. 

4. Design a High-Impact development process to
accelerate the growth of high-potential talent.

Here again, there a lot of shotgun approaches rather than sharp, strategic solutions that ensure that development really happens and that the highest return on development investments is achieved. Although there are many arrows in the I-O practitioners development quiverfor example multisource feedback, training programs, development centers, challenging assignments, action-learning experiences, and so onthe key is to determine which one or which combination of solutions is the best for the particular target at which one is aiming. Our colleagues, Mary Dee Hicks and David Peterson, have developed a helpful framework (1999) that defines the necessary conditions for lasting development and helps clients clarify where their greatest needs and opportunities for improvement lie. The model is useful for both auditing current needs and for designing appropriate solutions. Below is a picture of the model and a description of the key components.

Insight. To start with, people must have a pretty clear idea of what they need to develop or development wont happen. Assessment tools (e.g., psychological tests, multisource feedback tools) are one way that we can provide insight into personal differences, capabilities, and development needs. A culture of candor and mutual trust is needed to encourage self-reflection and increase openness to constructive feedback.

Motivation. Insight alone is not sufficient; people need to be willing to invest the time and energy it takes to develop themselves. For some, the motivation is fueled from within; for others, external incentives, peer pressure, support, and encouragement from bosses help to light the fire. Creating the conditions necessary to ignite motivation becomes an important part of the overall development system.

New skills and knowledge. People must learn how to acquire the skills and knowledge they need. A lot of development planning and programming focuses on this obvious component, so most organizations go overboard on developing these solutions and tend to neglect many of the other necessary conditions. As a result, their heavy investments in training fail to produce a full payoff.

Real-world practice. Frequently, people return from training programs pumped up and prepared to try out their new skills, only to find they have no opportunity to exercise them. Like muscles, unless new skills and knowledge are exercised, they atrophy. To retain newly learned skills, new challenges and stretching assignments back on the job, or supplemental to the job, are needed. A supportive environment is also necessary to help counteract the tendency to avoid the awkwardness and discomfort we all experience when we exercise new or unused muscles.

Accountability. Unless individuals feel personally accountable for internalizing and integrating what they have learned into their daily repertoire, it just wont stick. Building the learning into performance expectations and providing appropriate recognition and rewards for growth, strengthens the individual-organization learning partnership and increases the likelihood that development will be sustained over time.

These are just a few of the conceptual models and methods that can be used to help clients appraise their needs, design tools and systems to identify and develop their high potential talent, and create the necessary organization sponsorship and support systems to fully nurture and leverage these critical people assets. 

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