Does Your Firm See You as a High Potential?

AI is transforming the world. And it starts with the right compute. ARM is the AI compute platform trusted by global leaders, proudly NASDAQ listed, Built for the future. Visit arm.com discover. Welcome to the hbr ideacast from harvard business review. I'm kurt nickish in force air green carmichael. Not that long ago, it used to be that if your company thought you should be put on the management fast track, you found out about it by a tap on your shoulder. One of the senior executives, or maybe somebody from HR would tell you that you've been assigned to executive training and and they'd send you off for three months. When you came back, hopefully you were savvy enough not to wear sunglasses and a polo shirt with the name of the business school where you just spent three invigorating months while everybody else worked. And within a short while you'd be announced as a new company vice president. Nowadays, that system is gone. First of all, good luck getting three months of training. That's pretty expensive. Second, the system for identifying and accelerating high potential employees is much more complicated. Now you may be on your list and not even know it. Here to talk about how you can get on and stay on your company's fast track is Jay Conger, a leadership professor and researcher at Claremont McKenna College. He's also the co author of the new book the High Potential's Advantage. Jay, thanks so much for talking with the HBR IdeaCast.

Kurt, it's my pleasure.

How do you know if you're in that cohort? How do you know if you're high potential?

Well, given the fact that half the companies we study don't tell you, that's a very important question. The way you would tell if you're designated is you'll notice you'll be invited to events that most of your peers are not invited to. So you might be asked to have lunch with your executive vice president or CEO. You'll notice you got assigned to a very special high visibility project which ultimately ends in a presentation to an executive group. You'll notice you're getting promoted at a faster rate than your peers. You could be sent to a one week leadership development program again, just you. None of your colleagues in the organization or the team you're in are invited. And those tend to be the most obvious cues that you're in the track.

Why don't companies tell you.

The reason why half the companies don't tell you? There are a couple. One, there are individuals who are borderline, who seem to have tremendous potential, but the organization's not Quite sure. And they'd like to take a calculated risk. And rather than tell you you're borderline or tell you you're not, they're going to judge by putting you into an assignment. That will be the test. So it works to your advantage if you're on the borderline by having a high potential track that's publicized. Some organizations fear that that will create too much internal competition among individuals. And there are corporate cultures that place a premium on collaboration and relationships. And so they tend not to tell individuals fearful of that internal competition to be created.

Wow.

And then they worry about your ego. They don't want you to get inflated.

Sure, sure.

The other reason is you can fall out, but you can get back in.

Do you think that's a well founded fear?

No. In reality, I think we're in an age of transparency. The millennials really want to know. If you do know, you tend to really appreciate the recognition. It makes people work harder to get into the pool.

Yeah, I suppose people could leave if they didn't realize they're being groomed in a way.

That's right. And Kirk, that's one of the primary reasons why they do tell you. All these posting boards like LinkedIn and Monster, there's a lot more movement of individuals away from their organization. So it's seen as a very powerful retention device. Congratulations, you're in the pool.

Curt, how do these systems work? Take us into the black box. How does that work?

Okay, so the black box, particularly as a younger manager, the primary determinant and deterrent actually of your status is your supervisor, your immediate supervisor. So when you're younger, that is the most important source of information. And depending on the organization, they'll be often asked to identify 10, maybe 20% of the people who work for them as high potential. So that then begins you into the track. Now, as you go higher, you'll be asked to also take assessments and you may be put into simulations.

Wait, simulations? That's interesting. What do you mean?

So as you move into the mid levels of organization and you begin to look like you might have potential to be a general manager, there's a good chance you'll be sent to a three day, two day, one week simulation which basically is run by an external organization. And it's testing how well you're able to make decisions, how well you're able to work with colleagues, how strategic you are, what your operating kind of sense. It may even test your financial acumen. And these are complicated, expensive simulations. And at the end of that, you will literally get an assessment which says that, Mary, you do have the potential to one day be an executive. And so these carry some weight because if you do extremely well in the simulation, it will basically reinforce points of view that are very positive about you.

Okay, so organizations are collecting these assessments, simulations, gathering information about you from your boss. What does the organization do with all that information then?

So they then have a meeting in which the boss will bring into the meeting room. And again, if it's a more junior in the organization, he or she might have two names. As you get more senior, the boss might have five names. And as you become an executive, you might bring in 10 or 20 names to your CEO. There's then a discussion and really an in depth discussion about each person. And the question is, is this person ready to be moved two roles up? And it's a very thoughtful discussion. They look at what the role up ahead will demand of you. They look at who you are, what your experience has been. So they go back over your track record. They then also ask, well, what do you need to learn and will that role help you learn that? They may be even more thoughtful about identifying some opportunities for training. Potentially a mentor or two could help you transition into the role. And then they will make a decision, usually at the end of that meeting or second meeting, as to whether you're ready to be moved up now. In that meeting, they will sort everybody into ready now, which means they can be moved now, ready in the future, like a year from now, and not ready at all. The ready now people, those are the ones who will then be matched up with corresponding opportunities. And the best companies do a really good job of matching you up with an opportunity that they need your skill at, but also one that will help you develop.

Yeah. And the not ready folks, are they then kicked out of the pool?

Yeah, they're not in the. So you could last year be a high potential and then suddenly you're in this mid zone or worse, the bottom zone. Yeah, you will now be out of the track.

On the other hand, it's sort of like promotion and relegation in soccer. You might be able to move up from outside the pool.

Very much so. And that's the idea of bringing everybody into the discussion, all your team in and great organizations that are really thoughtful about talent. Roughly 20 to 25% of the people who were designated last year fall out. And then roughly another 20, 25% fall in because they've done something exceptional. And the best systems are very dynamic because they realize you might have a bad boss along the way is it.

Worse to have been in the high potential pool and have fallen out or to have never been in it at all?

Never been in it at all.

How so?

What that shows is, and let's say you've had four bosses or five bosses. It shows that none of those individuals who you worked for thought of you as an outstanding contributor. And when the talent organization looks at that pattern, they say you might be a solid contributor, but not flourishing under any of those bosses. That's a very bad sign in terms of indicating, oh, we've got somebody here who has a lot of room to grow.

Got it.

And I do know of CEOs who fell out of the high potential pool for a period of 2, 3, 4 years and then got back in the pool and went on to become the chief executive officer. I know of three right away, just top of mind, who were in that case.

So who are they? Can you tell us one? You know of three, but you can't even tell us?

Okay, I'm sorry, Kurt.

All right. I want to ask if there are signs that a talent review, this whole talent review and high potential pool process is not working. Because I have certainly worked at organizations where there were very talented people I was working with. Even some of the managers there recognized that, but they somehow let them get away. And how do you know if you're at a company that's not doing a good job of that?

I think there are a couple reasons why that happens, and then I would share what you should do. I think at some of these organizations, the systems are way too rigid. Secondly, if you think about it, the manager really is the focal point. They're the decision maker. And if you were pinned to a manager for four, five, six years who basically, you know, had different unrealistic expectations, it's a very different chemistry from yours. You could see you would not get designated and you're not able to move out from under that person. The other problem with potential is that many organizations primarily, again, back to the supervisor. Define potential as your current performance. So when somebody's doing really well today, they say, oh, that person has lots of potential. Well, we know that that's not necessarily the case at all because the assignments up ahead might be very different and might actually play to your real strengths. Whereas today you're in a role that doesn't play to your strengths or your deeper talents. You're getting a bit of a free ride effect.

Yeah.

Then the other thing is you might be a maverick and you might be very countercultural. And so, because you don't fit well culturally, even though you're very talented. I'm sorry. You could possess all of our X factors. And if you're a really poor cultural fit, people won't appreciate them.

But what happens when you go to another company like this isn't a medical record that gets passed on to your next doctor's office? Do you have a clean slate or are you actually behind your peers because they have more of a record with the company's talent review process than you do?

You literally have an online resume that you bring with you from the last organization. But because you don't have the relationships and because people haven't worked with you in some ways, you are beginning afresh.

Should you ask about this in your exit interview? Was I in the high talent pool? Can you share with me the assessments that you have? Can you ask for that stuff?

You can ask it. They may or may not tell you. And sometimes if you're thinking of leaving, but you feel you have hints that you might be a high potential person and you think you'd prefer to stay, but you're uncertain. It's the type of thing where you could ask potentially your boss or you could go to human resources. Again, it'll depend upon how confidential they feel the process is, but they may tell you.

That's interesting.

We know of a few cases where people prematurely left thinking they weren't in the high potential talent pool, but they actually were. And I know in two cases they would have stayed if they had known that.

Yeah, right. You could be in that situation where they're saying, not ready yet, or they want you to stay for another year and you feel like you're not getting the opportunities. You're seeing your peers do it and you take off. So you probably want to ask this before you have a competing offer.

That's right. And then sometimes you'll be put in a role that you feel, oh, why am I in this role? I'm not really interested in safety or running a call center. And you feel like it's a bit of either a demotion or a misfit. And you have to realize that oftentimes the organization has a very long Runway about who you're going to become and they really put you in there for grooming. But you don't fully understand that. You want to try to maximize what you can learn out of each new assignment.

So let's talk for a little bit about what you can do to succeed in this system. You mentioned X factors before in our interview. What are those so I'll start with.

What we call the first X factor, which is situation sensing. And that's the boss and reading your boss. And as you move up, it's going to be reading your boss's boss and your boss's boss's boss and your boss's peers. So particularly as a younger manager, you're focused on what you need to achieve. But in reality, if you're going to be seen as a high performer, the things that are most relevant to your boss's career and success for the year are the ones you need to be helping her with.

Yeah. And this is kind of career ladder 101 stuff a little bit. But you've talked about just because your boss is so integral to this high potential review system that companies have, this makes that doubly important.

Doubly. And your boss will have two, three, four things that they really need to accomplish in that year. The more of those you can help them, the more they'll feel you are a high, high potential person. The other thing which we found consistently is that high potentials tend to show quite a lot of initiative. And sometimes the initiative is in areas that is not directly related to the boss's agenda, but they're pressing opportunities or pressing problems, the group. And you're the one who takes the initiative to fix them or to help.

Make them work because you sense that situation.

Yes.

Yeah. So what are the other X factors?

The next one is talent accelerating. And this is based on the notion that as you move up, you're going to have people working for you. Those individuals have to be focused on their potential. There's this virtuous multiplier. If you're focused just on your potential, you ultimately are not harnessing the very people who will help all of you rise higher. And so that's built on the ability to read and size up the talent of your team extremely well. It's your ability to be truly developmentally focused towards them. The third quality is we call career piloting. And there's a term called herky jerky careers. And Peter Capelli, who's at Wharton, identified this. High potentials have herky jerky careers. So you're being thrown into areas you really don't know enough about. So the question is, how good are you in terms of quickly reading? What's the issue in this new assignment? Can you create psychological trust with the team you've just inherited so they can share with you candidly? What are the challenges and problems do you bring into particularly stressful situations? Kind of a calming Influence. Do you know who you have to engage very quickly as peers and superiors to help you navigate through this. And the other thing on Career Pilot is knowing that a study done some time back by the Harvard Business School showed that when managers are put into new roles outside of their functional experience, they tend to fall back on their functional experience. So it's understanding that your tendency is to go back to do what you do so well, but realizing that actually is probably not what you need to be doing.

Yeah. It's interesting that you mention this, because I think of CEOs that I think have had really interesting career paths. We interviewed on IdeaCast a few months ago, Satya Nadella from Microsoft on episode 596. For anybody who wants to go back and listen to that episode, he talked about some of the opportunities he got because Microsoft, he was an insider. Right. And Microsoft gave him these new challenges and gave him jobs that other people did not want. There is no model career to get to be CEO. In retrospect, it might look very strategic, but. But while you're doing it, it certainly does not.

That's right. And so you have to be very comfortable and then a very quick learner, which is kind of our foundational X factor, which we call catalytic learning, which is that you have a fundamental curiosity that leads you to ask questions, to be an investigator when you step into roles, and then to turn those insights into initiatives. And that's the catalytic part. It's one thing to be a good learner, but if you're not translating it into activ, it doesn't work.

Yeah. One quote in your book that sort of seems really obvious but pretty profound. And you said that once you stop learning, you stop being high potential.

I really believe that. And I, unfortunately, get to see it in action. I can't tell you how many executives I've met who in large part, because of their probably they've had a strong, successful track record, and it leads them to stop learning. There's almost a sense that the world will just keep repeating itself, which, of course, is far from reality.

Yeah, right. Well, Nadella's book is called Hit Refresh. Right. It's about starting anew. So your final X factor is complexity translating. And I thought this was really interesting, but can you make that sound a little less complex?

So this for us was one of our kind of most surprising findings. And I just kept seeing it in the interviews over and over and over. People would say, ping is so good at taking all the information around us and making sense of it for us. And I started to realize that it's this ability to take all the complexity that a team is facing or enterprise is facing and boil it down to the essential points. And then what they're able to do from that is often construct these really powerful narratives or to help the group understand that there are three imperatives that everybody has to be focused on. And it becomes particularly critical as you move up to the middle and senior levels of leadership. This ability to be really masterful at simplifying the complex for people. And then there's a nuance to it, which is you have to understand that different audiences or different stakeholders need a different adaptation of that synthesis.

Yeah. Like what?

Well, you might have complex changes that are going on in the world of the enterprise's customers. And the way you would explain that to board members would be very different from the way you'd explain it to your CEO would be very different from the way you'd explain it to your marketing heads. And so you'd have that sensitivity to know how to tailor the message.

Yeah.

So they tend to also possess very strong or they've cultivated very strong persuasion skills.

Well, Jay, I have to say that you've been pretty strong at persuasion. You have done a good job of translating the complexity of corporate high potential review, assessment and acceleration processes. My last question I'd like to tack on is just like, what's the biggest misunderstanding about this kind of process that you want to take the opportunity to clear up?

I think for many people, they see it as a process that maybe doesn't feel fair. And I think many people see them as a ranking system. You're the star pupil. But in reality, for most of the organizations where these are done well, they're a tool to help really push people with potential to be their best companies that I've worked with that really use them well. It's really about development and it's less about, we need a ranking at the end of the year, let's get it.

Yeah. It's helpful for people to understand that so that they know how to not game the system, but just try to work with it and make it work for them.

Yes. And also not to be surprised when all of a sudden you get moved somewhere laterally and you're thinking you're going upwards. There's a wonderful story in the book, and this is an individual who's now gone on to become the president of the largest operating group in his company. And he shared these kind of what appeared to be lateral moves. And he said, you know, they were moving me all over the place. And I thought I, I thought I wasn't doing well. And then all of a sudden, four jobs later, I'm put into this amazing role. And what I realized in hindsight was these seemingly lateral jobs were all about helping me expand my perspective and be skillful in a set of areas that I had no experience and no skills. So that one day when I was sitting in an executive role, I understood and I knew what it took to do those roles. So I think that also is another one, which is sometimes we misunderstand why we got a lateral move. It may actually be a grooming move that you just don't fully appreciate.

Well, Jay, I want to thank you for making us smarter about it.

It's been wonderful. I've enjoyed the interview and thanks very much and I look forward to listening to it.

That's Jay Conger, a leadership professor and researcher at Claremont McKenna College. He's the co author of the new book the High Potential's Noticed. Impress your bosses and become a top leader. You can find it wherever you get your business books and@hbr.org thanks for listening to the HBR Ideacast. I'm Kurt Nickish. Sam.