The Paradox of High-Potential Employees

To retain high-potential employees, the conventional wisdom is deceptively simple: identify, develop, and nurture them. By paying special attention to the very best people, they will stay with the firm and eventually emerge as key leaders.

But translating this into action is much more difficult. As the former head of executive development at GE used to tell me, "There's a difference between doing it and really doing it." Many firms have trouble keeping their best people, despite their investments in talent management. In fact, a study last year by the Corporate Executive Board indicated that "25 percent of employer-identified, high-potential employees plan to leave their current companies within the year, as compared to only 10 percent in 2006."The study also found that 40% of the internal job moves for high potentials ended in failure.

So despite the focus on high potentials and the importance of effectively managing them, why do so many organizations struggle to do it well? Let me suggest two reasons.

Discomfort with Differentiation: In order to focus on high potentials, some employees need to be singled out. And, truth be told, most managers hate to differentiate. They would prefer to treat everyone the same, avoiding the uncomfortable process of sorting people by levels of performance. As a result, managers will identify certain employees as "high-potential" simply because they don't want to tell them that they're outperformed by their colleagues. And others, who are appropriately selected, are not told because it would create an uncomfortable two-class system. In other words, managers avoid declaring who the high potentials are, for fear of upsetting people who were not selected.

Discomfort with Developmental Dialogue: Even if high potentials are identified properly, bringing them to the next level requires a continual, complex dialogue. Managers need to stretch, challenge, and coach their high-potential employees and make sure their assignments push them beyond their comfort zones. To do so, they have to work with senior business leaders and HR to clarify assessments, identify opportunities, and coordinate possible moves. Without multi-dimensional dialogue about these issues, managers tend to hold on to their high-potential people instead of helping them along an intentional developmental pathway. High-potentials then may interpret this as a lack of company support and will be inclined to look elsewhere.

Unfortunately, engaging in this kind of developmental dialogue is foreign to many managers and can cause just as much anxiety as the need to differentiate. In fact most managers avoid coaching discussions, particularly with employees who have more potential in their careers than they do.

Taken together, the twin discomforts of differentiation and dialogue hinder high-potential programs, even when senior line and HR executives do a good job of centrally structuring assessments, rotations, and training. This may at least partly explain why so many company-identified high potentials don't remain with their firms.

To increase the odds of success, senior executives need to focus not just on the high-potential programs, but the underlying anxieties of managers who have to execute them. One way to do this, for example, is to require managers to mentor one of their high-potential direct reports. Not only will this approach be good for the chosen employees in the short-term, but also it will force managers to get more comfortable with performance differentiation and developmental dialogues. As anyone who has done it can attest, mentoring benefits the mentor as much (if not more) than the mentee.

How well does your company retain and develop its top talent?

Cross-posted from Harvard Business Online.

 

Follow Ron Ashkenas on Twitter: www.twitter.com/SchafferResults

Comments

[Joseph Efoghor]

01:20 PM on 05/02/2012

It is always good to let an employee know when he is doing well and also commend him for that. When you choose to treat everyone the same way without giving room to praise those who out-perform the others, the only message you are indirectly sending across is that there is no need to do better than others.

Everyone who performs better than the others needs to be appreciated either by way of promotion, incentives, support or by other Ways of Motivating Your Employees because it has a special way of making him to want to do more for your company.

But when nobody's excellent work is recognized specially, it can discourage them from giving you the best of themselves.

[Linda from Deerfield]

05:31 PM on 04/26/2012

I seriously doubt that management appreciates the motivational damage that is done to employees forced to watch a favored other perform poorly or leave. There is also occasionally the issue of management being mistaken about who is deserving of favoritism -- the team as a whole would often be a more reliable source of that judgement.

[Jody Dobis]

10:04 AM on 04/26/2012

Our culture once celebrated the "maverick" and the independent thinker. Along the way, we bought into the idea that our future economic success depended on team work. All for one and one for all. Even the schools, from kindergarten to post graduate, the emphasis was on team projects. In my opinion, that has led to higher levels of mediocrity at best. Do we need cooperation and team work in the work place? Of course we do. But it should be considered as only one part of the answer. If you emphasize team work to the detriment of independent thinking, you end up with compromisses that more often than not end up in nissing the goal intended. The result are even worse for high performers. Why should they wast5e their talents and ideas that end up in solutions that too often are compromisses in quality and effectiveness.

[joebaggadonuts]

10:03 AM on 04/26/2012

There's another reason. Failure to promote teamwork to the "high potential." No one person can do it all and teams of 10 are always more capable than individuals.