Feature
Promoting from within during continuing talent shortages tops most organizations’ priority lists. After all, internal mobility boosts retention rates while decreasing sourcing and recruiting costs. So why, then, don’t more businesses have formalized standards and processes for identifying and developing high potential and high performers?
New research from the Talent Strategy Group paints a less than rosy picture. While its 2024 High Performer and High Potential Development Report found organizations consider 15% of their employees to show high potential and 21% to be high performers, more than a third of respondents admit to not having an enterprise view or strategic approach to accomplish this.
In their findings, study authors Marc Effron and Chloe Kuhlman note that just 18% of organizations report having and applying a formal vision for developing talent. Nearly half say they have a philosophy but don’t apply it consistently. And 30% don’t have a plan at all.
Proactive, Not Reactive
Talent Strategy Group’s findings don’t surprise Karin Hurt, founder and CEO of Let’s Grow Leaders. She says while large companies understand that employees are corporate assets and that it’s vital to move people strategically through different functions, her experience shows a different reality for smaller organizations, where leaders assume they know their top talent and take action based on that.
“That can become very reactive,” she said. “Instead of saying, Where are we headed in five years? What talent will we need at the executive level? What’s likely to happen in our organization?, they start talking about people. [They] aren’t thinking with wide enough peripheral vision about what that talent could actually do. You need to start with the skills: before you talk ‘people,’ talk ‘priorities.’”
Hurt adds that identifying critical positions that might be vulnerable can prevent chaos down the road. To achieve that, she suggests leaders ask themselves, “If somebody were to walk out this door, do we have a backup plan?” and “What are we doing to make sure we’re preparing people for those critical positions?”
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Investing in Your People Pays Off
It’s important to structure the development process because it works, said leadership consultant and coach Keshawn Hughes, founder of NeuroSavvy Leadership.
“Organizations that offer leadership development have great ROI quickly — within months of placing their leaders in some type of formalized program — resulting in more profitability and greater customer satisfaction,” said Hughes. “But you have to measure it so it can be adaptive and improved over time.”
With many companies focused on day-to-day operations, few are looking too far into the future. But in its report, Talent Strategy Group notes that without written protocols for the development of high potentials and high performers, companies are left hoping their good intentions will somehow translate into positive action. However, hope is not a strategy, notes Hurt.
“Most leaders are looking at, ‘What do I need in this role right now to really knock this out of the park?’ They’re not taking that longer view, and who can blame them? They’d rather take somebody who’s proven in this role and promote them in,” Hurt said.
Still, she said, that’s where organizations are missing out.
“Maybe we don’t just want somebody who knows how to sell the current environment; we need to be selling in the future environment.”
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Lip Service and Lack of Vision Can Damage Your Brand
Incoming talent needs proof that your workplace will deliver on its promises to chart a successful career path for them, said Hughes. “As people are hired in, they’re sold the dream. They’ll be looking to see that what’s been sold to them aligns with what they’re experiencing,” she explained. “If they keep getting vague responses about how that can happen or are told to find it themselves, that leads to poor engagement that will diminish your brand integrity.”
Hurt recently spoke with a millennial who was laid off and disillusioned after a career path never materialized.
“The impact is not just on that guy; it’s also on all the people he’s going to tell about that organization,” she said. “Are you a brand where people know that if they work hard and are high potential and high performance, they’re going to have a career path, or do they feel you’re not going to have their best interest at heart? And that word will spread.”
Haphazard Visions Don’t Help DEI Efforts, Either
‘Without formalization, one danger is promoting people that look and feel like you,” said Hurt.
The Society for Human Resources Management is a big advocate of the nine-box grid, which places employees in one of nine boxes based on their performance and potential. “If you’ve got all balding white men in those boxes, you know you have a diversity challenge,” Hurt said.
When standardized processes don’t exist, departments work in silos instead of developing people across functions, adds Hurt. While in Verizon Wireless’ succession program, her career was mapped out from the beginning.
“I was in HR, then I led a large customer service organization, learning how to build large teams. Then, I led a 2,200-person sales team and outsourced contact centers of 10,000 people,” she explained. “If I had just stayed in one function with no macro view of where I belonged, I wouldn’t have had those opportunities. If you don’t have a formalized process, you won’t have people taking that bigger view.”
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Creating a Culture of Responsibility
Most survey respondents cited in the Talent Strategy Group report said there’s no accountability for leaders to develop high performers or high potentials: Fewer than 20% of companies make development a goal in performance management, something Hughes notes is counterproductive.
“You want to tie leadership development activities and actions to the performance of executives and people leaders, so their performance evaluations have some type of bonus tied in as part of their compensation,” said Hughes. “A team’s development, engagement and retention should all be tied to the leader’s performance; it’s a red flag when lots of people either move out of your team or leave the company.”
Hurt says companies should also supersize their talent review process.
“Most organizations look at their talent and say, ‘This person might have potential someday to do more,’ but they’re not looking at it strategically. What is that ‘more’? Then, when the landscape shifts, they realize they haven’t been preparing people for those future roles,” she explained.
Start Small, But Start Now
Hughes suggests organizations begin by having conversations to map out talent gaps to then determine how to bridge them for the future.
“Do your own organizational assessment, which can be both quantitative and qualitative: Survey your leadership, poll the employee population, see what their needs are and what needs your organization has as far as leadership development,” she said.
“Then, go into the development process. Make it iterative; have a beta test run with a small segment of the population, if possible, before full implementation, so you have the most success with the official rollout.”
Hurt suggests starting with the executive team and one nine-box grid to identify five critical positions.
“As with any change initiative, start small, get some traction, get the buy in. Then, when everybody says, ‘Wow, look at the talent we’re developing,’ go to those executives and say, ‘OK, now let’s do it for your team’ and do the calibration one level below,” she said.
Lack of time or resources is no excuse, she said.
“Most of the people who tell me they don’t have time — and I hear this a lot — are then hiring a recruiting company and paying them a year’s salary every time they have turnover in those roles,” said Hurt. “That is so expensive.”
