Being high potential…it sounds pretty cool! And it is. But what does it mean? How does it influence your corporate career?
In a previous post, we discussed the succession planning process and covered some basic definitions like ‘pipeline’ and ‘bench chart’. To support your career, you should understand the term ‘high potential’ as well.
Succession planning has dual importance to you as a leader. You will participate in the process to rate and discuss and develop your direct reports. Also, you will be rated and discussed by the leaders above you.
Decisions made in succession planning determine who gets prime assignments and promotions and development opportunities. You need to understand the process, so you can prepare.
What is a high potential?
High potential refers to an employee’s ability to move into bigger roles. It is a rating generally used as a noun – high potential or ‘hipo’ for short. As in, Maria is a hipo.
Employees receive the designation – or another one – through the succession planning process. As part of the confidential process, senior leaders assign the ratings. Employees rarely know their own rating.
Hipos must have (or have the ability to develop) the skills, cognitive ability, interpersonal skills and organizational savvy to succeed in bigger roles. Being a hipo requires being strong across the board.
What are the succession planning ratings?
Succession planning results in many ratings – including high potential. During succession planning, employees get rated by their direct managers. Specific terminology of the ratings varies across companies.
The succession rating is not the same rating as the one used for performance reviews. Performance review ratings look backwards at actual behaviors and goals. Succession ratings look forward at what the employee might be able to do in the future.
Being future focused, assigning succession ratings involves more art than science. Leaders use definitions of the different ratings – often set with a 9 box tool.
During succession planning discussions the leaders explain the ratings given to their direct reports. All of the leaders in the room compare and debate the ratings and agree on final ratings for each employee.
Ratings frequently change during discussions due to additional feedback and perspectives.
Example of ratings
Since succession planning focuses on moving people into bigger roles, the ratings reflect future ability. The high potential ratings usually include a time frame for promotion and how many levels the employee could progress.
The terminology varies across companies, but examples include:
- High potential (hipo) – employee who has the potential to move up 1–2 levels in the organization in the next 2–3 years.
- Promotable – an employee with the potential to move up one level over time
- Key Player – an employee who contributes well and is in the right role for now
- Inconsistent player – an employee who sometimes performs well and sometimes does not. This often applies to someone who does the job tasks well but struggles with soft skills like communication or interpersonal relationships.
- Talent risk/ Placement Issue – an employee who is not being successful in the current role. These people generally need to be demoted, moved to another role or fired.
- Emerging Talent – an employee who shows early signs of being high potential, but it is too early to know for sure.
- Too new to rate – an employee who is new to the organization or to the role. It usually takes about 6 months to really gauge how an employee will perform.
More to know
- Purpose: Ratings highlight key employees and build a bench charts.
- Development: Ratings also help identify candidates for key development opportunities. Hipo employees get more opportunities than Key Players.
- Balance: A healthy organization incorporates a mix of all of the ratings. Only about 5% of the population should be rated as hipos. That group should be limited and well-screened, so it can be given special attention. Key Players keep the business running and get things done on a daily basis. Hopefully Talent Risk/ Placement Issues are small in number and can be re-assigned or moved out of the business.
- Ratings are fluid: An employee can be rated as a Key Player one year and High Potential the next year. Ratings can also slip backwards.
- Ratings are not a promise: Promotions always require a balance between the needs of the company and the developmental needs of the employee. The employee might be ready to move, but there might not be an opportunity available. This is one reason that ratings are often not shared with the employee.
- Blockers: Succession planning will sometimes identify “blockers”. Although not usually an official rating, blockers merit discussion. Blockers are employees in a critical role who have stalled out. They are often blocking high potential associates from moving up. Sometimes the company must re-assign blockers to continue developing talent.
How would you rate your direct reports? How would you rate yourself?
