In theory, high-potential leaders have skills in the top 5 percent of their organization. They should stand apart from others in their knowledge, interpersonal skills, ambition and leadership potential. During a recent research study, after looking across four different organizations, it was clear that high-potential leaders were more effective leaders. This chart shows the average overall leadership effectiveness scores for high-potential (HIPO) leaders compared to other leaders in their organization. Note that HIPO leaders were rated as significantly more effective on average.
While this research provides evidence that a valid 360-degree assessment is an excellent predictor of high-potential leaders, it should be noted that not all HIPO leaders were rated as more effective. In fact, on average, 24 percent of the HIPO leaders were actually rated below average compared to global norms. The percentage of all HIPOs with below-average scores ranged from 15 percent to 35 percent, depending on the company. This data clearly identifies the need for better selection methods and additional leadership development for both those selected as “high potential” as well as other leaders in organizations.
Are There Common Leadership Deficiencies?
This study compared those whose overall leadership effectiveness was at the top quartile to leaders at the bottom quartile. Researchers examined a variety of different behaviors, identified those that were the most significantly different and then factor analyzed the behaviors to identify themes. They discovered that three capabilities were consistently separating the high from the low performers in all four organizations, and two were consistent across three organizations. There were an additional six that were duplicated across two organizations and an additional six that were unique to one organization.
It became clear that the culture and the specific needs of an organization generate a stronger requirement for some capabilities over others. The lesson here is that organizations ought to be clear about what leadership capabilities are critical for high potentials in their organization. These capabilities are difficult to identify intuitively, but with good research, they become clearer.
The three deficiencies that were consistent across all four organizations provide useful insights into critical skills that all high potential leaders should possess:
1. Strategic Perspective
There was, on average, a 60-percentile point gap between the ratings for those in the top and bottom quartiles. It is very difficult for an individual to develop strategic perspective when strategies are handed down to them from others. They may understand the strategy, but they can only learn the process of developing a strategy by doing it. Senior leaders need to engage HIPO leaders in strategy discussions and challenge younger leaders to develop strategies on their own. By engaging HIPOs in strategic discussions, senior leaders will have greater insights on which HIPOs really do have strategic capability.
2. Communicating Powerfully
Research has shown that communication is one of the most malleable skills. It can be developed easily, but, clearly, not every person is getting the necessary practice. So much of work and career success depends on individual activity rather than communicating to others. Not only are verbal communication skills critical, but written communication skills are also becoming more and more essential. Great communicators will always be in short supply, but with practice, most leaders can significantly improve.
Over the last four years, a new capability has emerged as extremely important. Research has shown that items cluster together with words like “quickly,” “early,” “urgency” and “moving forward.” Leaders who were rated high on their speed were rated two times more effective in their overall leadership effectiveness. Those leaders were not more frantic in their activity but rather used skills like innovation, initiative and setting stretch goals to pick up the pace in their organizations.
In summary, the high potentials in an organization can make a significant difference – but only if the key criteria of strategic perspective, powerful communication and speed of execution are sufficiently met.