If your company is like most, you probably identify your next leaders from a pool of your top performers. They might be salespeople or project managers or skilled developers, but in any event, they've got a reputation for delivering results.
Stong performance and the results it carries are all well and good, of course, but it does not necessarily indicate that an employee will make a good leader. And according to research from member-based executive team advisory company CEB, companies are seriously hurting themselves by failing to differentiate between performance and potential.
Defining True Potential
CEB's report says that just one in six high-performance employees also display the attributes that indicate potential. So leadership development programs that stress performance can amount to a huge waste of resources for companies looking to develop leaders.
What goes into a high-potential employee? CEB Chief Science and Analytics Officer Eugene Burke tells Inc. that the chief behaviors include, for starters, an aspiration to eventually serve in a leadership role. Other attributes include autonomy, flexibility, interest in the company, and the capacity to work in fast-paced settings.
Aside from those personality traits, the CEB report says that potential also shows itself in actions. High-potential employees...
- Show an ability to make decisions and act on them.
- Can lead and supervise groups.
- Show an ability to meet their goals and objectives.
- Act entrepreneureally by actively looking and advoating for new opportunities for the company.
In other words, potential is about a lot more than just hitting or exceeding sales goals or other performance metrics, even if that does play a role. Employees who are strong in all of these areas, Burke says, are 11 times more likely to succeed in a senior role than those most lacking across all areas.
According to CEB, 46 percent of employees brought into leadership development programs ultimately fail to meet their business objectives once they assume managerial roles. But at least they get through them; the report also says that more than 50 percent of misidentified employees brought into these programs--employees who display high performance but not high potential--ultimately drop out before they're complete.
Why You Need Leadership Development
So companies are wasting a lot of time and energy--and potentially hurting themselves in the long run--by bringing the wrong employees into development programs.
But an even bigger risk?
Companies stand to cost themselves their best and brightest employees much more immediately by outright not offering leadership development opportunites. Only 23 percent of high-potential employees who are not engaged say they plan to stay at their current job, CEB reports, compared to 59 percent of those who are engaged.
Making sure they realize the opportunities within the organization--such as by putting them in a leadership development program--is one way to keep them excited about the company and their careers, Burke says.