Identifying High Potential Talent

Michael Couch
President
Michael Couch and Associates Inc.
Pittsburgh, PA

“Not everybody is created equal, and it’s important for companies to identify those high potentials and treat them differently, accelerate their development and pay them more. That process is so incredibly important to developing first-class leadership in a company.”

Anne Mulcahy
Chairwoman and Chief Executive Officer, Retired
Xerox Corporation
On what she learned as Global Head of HR
New York Times 2009

The business case for the impact of high potential talent on organization performance is very robust. However, the challenge for many organizations is effectively and reliably identifying the individuals that have the potential to make a difference. This whitepaper will focus on the best practices for identifying high potential talent.

What to Look For: Learning Agility

“Everyone wants to know the secret of success, and there is one. It’s called continuous learning to do what you don’t know how to do” The Leadership Machine 2011

It is a common axiom that past performance or behavior is the best predictor of future performance. But that is only the case when the future situation is the same as what was encountered in the past. The best indicator of future potential is actually whether an individual is a learner – whether they are able to extract meaning from a variety of experiences and use what was learned to do new and different things. People who are continuous learners are described as being learning agile.

In a work setting, it is east to identify people that exhibit learning agility. Agile learners:

  • Perform effectively in first time challenges – situations where not anyone would be a high-performer. They learn quickly when facing the unknown.
  • Are comfortable with complexity, ambiguity, change and new challenges
  • Are good at critical thinking and logical, methodical problem solving
  • Have broad perspectives and can see the big picture
  • Assess situations and people quickly and can adapt their behavior to match
  • Are likely to challenge other people and express their opinions
  • Do not shy away from conflict
  • Are impatient and tend to push boundaries
  • Know themselves and are open to feedback

Learning agility can be observed. It is not like IQ that is measured by a test and thought to be fixed. Learning agility is expressed in everyday behaviors and can be learned.

How to Find It: The Best Assessment Tool

There are a variety of methods that have been used for assessing talent in organizations. To be effective, any tool must meet four basic criteria.

  1. Is it reliable: Does it provide consistent results across people and time
  2. Is it valid: Does it provide information that is well-founded and has a relationship to key business results?
  3. Is it face valid: Is the process and results easily understood and accepted by sometimes skeptical executives?
  4. Does it demonstrate utility: Are the results valuable enough to warrant the time and effort invested?

The table below provides a relative comparison of what we know about the validity, reliability, face validity and utility of the most common talent assessment tools.

Validity Reliability Face Validity Utility
Single Manager Assessments Low Low OK Low
Testing ? ? ?
Structured Interviews OK OK High OK
Assessment Centers High High High Low
Talent Reviews High High High High

Single Manager Assessments. This is the most frequently used assessment method but is the least reliable and least valid. In research conducted by Personnel Decisions International that included data from 6000 leaders that were evaluated by two different bosses:

  • 80% were rated above average, and
  • For the 15% that were rated outstanding by one boss, the second boss disagreed 62% of the time.

Many bias creep into the evaluation a manager gives their employee. In some cases, too much familiarity limits objectivity. Many managers are not comfortable in confronting negative behaviors or recognizing positives. In addition, managers may worry that a poor rating might reflect negatively on him/her. In any case, there seems to be little value to only using the evaluations of a single manager.

Testing. Testing can be a very reliable and valid tool to assess human capabilities. However, poorly designed and implemented testing can do more harm than good. For example, the Institute for Corporate Productivity found that 19 of 25 testing tools had a negative or insignificant correlation with market performance. There are just too many bad measures on the market and many more organizations that misapply them. There are very effective multi-rater (or 360) measures of Learning Agility. I have found these tools to be excellent sources of feedback for development purposes. However, biases that affect reliability and validity tend to creep into the multi-rater results when they are used for assessments that might impact someone’s career.

Structured Interviews. With training in behavior-based interviewing, standardization using competencies and structured processes, interviewing can be an effective method of assessing talent, especially in hiring. They tend to be a little awkward for assessing existing internal talent. Why interview someone when you may have years of actual work experience to assess?

Assessment Centers. Assessment Centers have been shown to be valid, reliable and content valid method to assess talent. The challenge with assessment centers is the resources required to build and maintain them internally. There are third parties that conduct assessment centers for a fee. Since they are resource intensive, organizations tend to be selective on who participates. The challenge then becomes what criteria is used to select high-potentials to attend which somewhat defeats the whole purpose.

Talent Reviews. Candid, objective Talent Reviews are the best method to assess talent. In some respects, effective Talent Reviews are like Structured Interviews in that they are behavior-based and standardized. The typical Talent Review process has the following characteristics.

  • The assessment team consists of a leader and his/her direct reports.
  • The individuals reviewed are those that are one or two levels below the assessment team.
  • Based on the size of the organization, talent reviews are often conducted in cascading teams of leaders to cover several layers of the organization.
  • The assessment discussions are led by a trained facilitator who guides the discussion with targeted questions and assures objectivity.
  • The comments and evaluations on each individual are captured in a database.
  • There is no paperwork or preparation for the session beyond background information on the employees.
  • The discussions focus on specific behaviors and their impacts, not on personality traits or generalities. For many organizations, they discussions focus on the behaviors linked to Learning Agility.
  • Everyone on the assessment team participates and provides observations of their experience with the candidate. In some cases, the direct manager of the individual under discussion is asked to hold off their comments until all others have contributed.
  • Everyone on the assessment team also participates in establishing ratings of the talent with the goal of achieving a consensus rating. Two ratings are often established – a rating of the overall performance and a rating of the individuals future potential.
  • Everyone on the assessment team understands the standard criteria used to make final talent ratings. Learning agility criteria are often used to rate potential.
  • The results of the talent assessment are summarized and the facilitator guides the assessment team through an action planning process. Where are the talent gaps? Where are the opportunities? Do we have the right people placed in the right roles? What actions need to be taken to improve our overall picture of talent?

Sometimes organizations use combinations of assessment tools. For example, structured interviews can be a used as adjunct to confirm or clarify the Talent Review impressions.

Summary

To understand what it takes to build future potential, look to Learning Agility. To assess the agility of your talent, use robust and objective Talent Reviews. Learning Agility can be learned so, even if the players are the same, you can build their capability through the right kind of development. Cascading talent reviews have the advantage of gathering insights on a larger number of people at deeper levels than most other assessment tools. As a result, the Reviews often uncover people that have potential but have not been challenged or stretched.