High potential talent delivers 90% more work and puts in 20% more effort than their peers. The numbers tell an interesting story – all but one of these leaders are high potential, while 21% are rated as high performing.
These numbers show why finding high potential talent is vital to organizational success. The process isn’t simple though – just 18% of organizations have a formal philosophy for talent development. Most companies lack proper planning too, as 83% of them have development plans for less than half their high performers.
High potential talent represents people who can take on bigger responsibilities within a specific timeframe. They show exceptional learning agility, emotional intelligence, and strategic thinking abilities. Your organization’s top 5% of employees contribute 25% of the output, which makes effective identification and assessment of high potential talent worth the investment.
This piece shows you quickest ways to spot and develop high potential talent in your organization. You’ll learn to set consistent evaluation criteria and create well-laid-out development plans that improve results. Let’s see how to turn potential into performance.
Define High-Potential Talent in Your Organization
Organizations need a clear picture of what makes someone a high-potential talent before they spend resources on development. This shared understanding helps build a foundation for future identification and growth programs.
What makes someone high potential?
High-potential talent (HiPo) represents people who know how to succeed, want to grow, and actively participate in taking on senior positions within your organization. These exceptional team members can grow faster and develop into future leaders, unlike those who just excel at their current jobs.
The most important qualities that make high-potential employees stand out include:
- Learning agility: They actively seek challenges and development opportunities
- Adaptability: They adjust quickly to changing circumstances and thrive in ambiguity
- Pressure management: They maintain productivity during high-stress situations
- Results-driven focus: They consistently push themselves toward challenging goals
- Strategic thinking: They prioritize long-term objectives aligned with organizational vision
- Interpersonal connection: They build effective relationships at every level
Research shows that all but one of these employees make up just 3-5% of an organization’s workforce. These individuals understand company values deeply and weave them into their work approaches, which adds to the organizational culture.
High performer vs. high potential
Companies need to see the difference between high performance and high potential. Performance shows how well someone does their current job, while potential shows if they can adapt and handle bigger responsibilities.
“A high performer is not automatically a high potential,” explains talent development experts. Many organizations invest in their top subject matter experts only to find that both the individual and their teams become unhappy when moved to leadership roles. This happens because high performers might excel at specific tasks but lack the drive, personality, or skills needed for leadership positions.
High-potential employees bring 91% more value to businesses than others. Adding just one high-potential employee to a team can boost their teammates’ effectiveness by 5-15%. These results show why companies must carefully separate performance from potential in their talent management strategy.
Why identifying high potential matters
Finding and developing high-potential talent brings major benefits to organizations. A ready pipeline of future leaders ensures business continuity. Research shows that leadership roles will change by 40% in the next five years, so we need to prepare for future needs.
Companies that recognize employee potential see 31% lower turnover rates. This becomes crucial especially when you have high-potential talent, since replacing one HiPo can cost up to 3.5 times their yearly salary.
Smart identification of high potentials helps companies invest their development resources wisely. The top 20% of employees generate about 80% of company output, so focusing on those with the greatest growth potential maximizes returns on development investments.
Companies that create a structured identification process can build leadership capabilities that work for both current needs and future strategic goals.
Establish a Formal Identification Process
Research reveals that 56% of organizations use formal processes to identify high-potential employees. A well-laid-out process helps you find and develop future leaders in your organization consistently.
Use consistent criteria and frameworks
Organizations face a key challenge when they try to arrange their understanding of performance, potential, and readiness. Managers often create their own criteria without clear definitions. This leads to inconsistency and inefficiency.
To create an effective identification system:
- Establish clear behavioral criteria – HR professionals and managers should know how to express specific eligibility criteria and talent behaviors that identify high-potential employees
- Document your process – Your organization needs to use the same talent identification criteria everywhere and document it clearly
- Implement objective assessments – These assessments add objectivity and help you find talented people you might miss otherwise
Organizations with formal identification processes get better results than those using informal methods. Employees identified through formal processes are more likely to see themselves as high potentials. This directly affects their engagement and how long they stay with the company.
Involve multiple stakeholders in evaluation
You’ll get more accurate results and reduce individual bias with multi-level evaluation. One manager’s view isn’t enough to spot potential that goes beyond current role performance.
Different groups making talent decisions together bring varied views and lower the chance of bias. These evaluation panels need diversity in both appearance and input. Everyone should feel free to speak up and help make decisions.
The process needs:
- Direct managers to watch daily performance
- Senior leaders to add strategic views
- HR professionals to keep the process consistent
- Cross-functional colleagues to bring different perspectives
A skilled meeting facilitator becomes crucial to spot discussions that might show bias. They should question unclear descriptions by asking “What does that behavior look like?” or “How does this behavior affect the business?”.
Avoid bias in selection
Unconscious bias substantially affects who gets picked as high-potential talent. Managers often pick team members who remind them of themselves or current leaders if proper safeguards aren’t in place. About 60% of organizations admit they need to improve their talent pipeline’s diversity, while 60% know their high-potential identification processes show bias.
To reduce bias:
Implement structured evaluation – Make more objective decisions by asking all candidates the same questions and reviewing them with consistent criteria
Train managers appropriately – Most managers lack training on finding potential, avoiding biases, and telling the difference between performance and readiness
Focus on behaviors, not traits – Facilitators should ask for specific examples when talent reviews include vague descriptions like “lacks executive presence”
Connect to business impact – Looking at business impact helps distinguish between biased statements and valid behaviors that need development
Organizations should train their managers before talent review meetings. This helps them participate effectively without bias. The training should cover unconscious bias awareness and meeting participation skills.
Assess Key Traits and Behaviors
Finding high-potential talent requires more than just looking at current performance. Organizations need to review specific traits and behaviors that signal future success. Companies that master this process build stronger leadership pipelines and avoid getting pricey talent development wrong.
Learning agility and adaptability
Learning agility—knowing how to learn from experience and apply knowledge to new situations—predicts leadership potential better than most factors. Research shows that highly adaptable employees are 2.5 times more likely to be high performers. This trait becomes crucial when spotting future leaders.
Korn Ferry has identified five distinct dimensions of learning agility:
- Mental agility: Critical thinking and innovative problem-solving
- People agility: Communication skills and relationship building
- Change agility: Embracing transformation and viewing challenges as growth opportunities
- Results agility: Delivering outcomes in new or challenging situations
- Self-awareness agility: Understanding personal strengths and weaknesses
You should review candidates by watching their response to unexpected challenges or cross-functional projects. To cite an instance, see how they handle sudden changes in requirements or work together with teams outside their expertise. Companies with high rates of learning agile executives produce 25% higher profit margins than their peers. This shows the business effect of this trait.
Emotional intelligence and collaboration
Emotional intelligence (EQ)—knowing how to recognize, understand, and manage emotions in oneself and others—plays a vital role in identifying high potential. Studies indicate that 90% of top performers possess high levels of emotional intelligence. Employees with higher EQ are 20% more likely to stay with their organizations.
The best way to review emotional intelligence is to watch how candidates:
- Regulate emotions during high-stress periods
- Demonstrate empathy when handling concerns
- Resolve conflicts between team members
- Build relationships across organizational levels
Organizations should look for people who excel at bringing out the best in others. These employees stay calm under pressure, build positive relationships, and handle challenging scenarios with composure. In fact, 75% of HR professionals see emotional intelligence as a key driver of leadership success.
Strategic thinking and ownership
Strategic thinking capabilities separate true high-potential talent from merely strong performers. Effective strategic thinkers display six key skills: knowing how to anticipate, challenge, interpret, decide, line up, and learn. These people consistently look beyond daily operations to think over long-term implications.
The best strategic thinkers are employees who:
- Anticipate changes and plan proactively
- Ask critical questions like “Are we heading in the right direction?”
- Take initiative without being prompted
- Demonstrate ownership of results
High-potential employees show remarkable initiative and drive. They handle their responsibilities skillfully while taking on extra work to help others. These natural leaders anticipate tasks before anyone asks and invest deeply in organizational success. Creating opportunities for strategic reflection helps leaders step back from daily operations to think over long-term goals and challenges.
Strategic thinking needs a different mindset than operational leadership—it reaches wider, focuses on the future, and embraces change. Identifying and nurturing these capabilities early builds a pipeline of leaders ready to guide future business complexities.
Create Structured Development Plans
Research shows that only 29% of high performers and 37% of high potentials have quality written development plans. This shows a great chance for organizations ready to invest in structured development plans after identifying their high potential talent.
Set clear goals and timelines
Good development plans turn vague hopes into real actions you can measure. Each plan should match both the organization’s goals and the person’s career dreams. Instead of generic activities, create tailored plans that target specific areas where people need to grow.
The best high potential programs run for 12-18 months. They include monthly activities that build leadership skills step by step. These timeframes give enough structure but still let you adjust based on how things go.
A solid development plan should have:
- Skills you want to build
- Clear tasks with deadlines
- Ways to measure success
- Regular feedback sessions
- Progress markers tied to real results
Use the 70/20/10 development model
The 70/20/10 model offers a proven framework to develop talent. It splits learning into three main parts:
70% – Real challenges and assignments that push people’s limits. People learn on the job by leading teams across departments, managing change projects, or taking on stretch assignments with clear goals.
20% – Growth through coaching, mentoring, and peer learning. This relationship-based learning lets people get feedback, reflect, and see different views.
10% – Standard training and courses that teach the basics. Though it’s the smallest part, well-planned training makes the other parts work better.
Track progress with regular reviews
Development needs accountability to work. Companies that track progress get twice the results compared to those that don’t. High potentials need quarterly progress checks, and HR partners or talent leaders should follow up with managers.
Good tracking looks at early signs like engagement and skill improvements, plus long-term results like promotions and retention. This informed approach helps fine-tune development strategies and proves the value of your investment.
Hold Leaders Accountable for Talent Growth
Leaders must be consistently accountable for developing high-potential talent. Research shows talent development programs often fail because no one holds leaders responsible for growing their team members.
Include development in performance reviews
The foundation of leadership accountability starts with making talent development a key part of performance evaluations. McKinsey’s research shows organizations that hold their leaders accountable tend to be healthier overall. A meaningful accountability system should:
- Connect talent development metrics to compensation and bonuses
- Split performance evaluations equally between goals and leadership behaviors
- Use 360-degree feedback that specifically looks at talent development efforts
This strategy makes development a core part of leadership duties rather than an optional task. Leaders change their priorities once they realize their advancement depends on growing others.
Use talent reviews to drive action
Talent reviews work alongside performance management. These reviews create a structured space for leaders to discuss high-potential talent. Performance reviews look back at achievements, while talent reviews focus on future possibilities.
These reviews make managers answer a crucial question: “How well do you know your team members’ strengths, weaknesses, and dreams for the future?”. The next step involves setting clear timelines for promotion decisions and merit raises for high-potential employees.
Note that HR should guide these reviews, but business leaders must own them. Leaders need to champion the process, take active part, and use results to shape talent strategy.
Executive sponsorship and support matter
Executive sponsorship builds organization-wide dedication to talent development. High-potential employees are 2.7 times more likely to leave within a year if their manager doesn’t give them growth opportunities. This risk makes executive involvement crucial.
Executive sponsors should receive monthly updates with specific examples of progress instead of general statistics. The program needs quarterly reviews with detailed success metrics and yearly discussions about program progress with leadership.
A well-designed talent development program needs steady executive support to succeed. The entire organization follows suit when leadership shows that developing people creates a clear competitive edge.
Conclusion
Organizations need to identify and develop high-potential talent to accelerate growth and maintain leadership continuity. In this piece, you’ll find that there was a proper identification process that can revolutionize your talent management approach and deliver measurable business outcomes.
A clear distinction between high performance and high potential is crucial. Both contribute by a lot to organizational success but need different development paths and opportunities. Note that top performers excel in current roles, while high-potential employees show they can grow into larger responsibilities.
On top of that, it helps to have formal identification processes that improve accuracy and fairness when identifying future leaders. You create a talent pipeline that truly reflects organizational needs rather than priorities by using consistent criteria, working with a variety of stakeholders, and actively working to curb bias.
Key traits like learning agility, emotional intelligence, and strategic thinking make your talent identification efforts stronger. These characteristics predict long-term leadership success more accurately than current performance metrics alone. Of course, organizations that become skilled at these assessments gain major competitive advantages through stronger leadership development.
Well-laid-out development plans turn potential into performance. The 70/20/10 model provides a practical framework to create growth experiences that combine challenging assignments, developmental relationships, and formal training. Systematic approaches produce better results than ad-hoc development efforts.
Leadership accountability drives green talent development practices. The process must integrate talent growth into performance reviews, conduct meaningful talent reviews, and secure executive sponsorship to maintain consistent focus on developing your high-potential employees.
Starting a journey toward exceptional talent management begins with identifying rare individuals who have the drive, ability, and engagement to lead your organization forward. Start today by establishing clear identification criteria, implementing fair evaluation processes, and creating development opportunities that turn potential into performance. Your organization’s future depends on how well you nurture tomorrow’s leaders.
