You have a seller who consistently outperforms her colleagues. Her quota attainment and win rates are exceptional. After she tops the sales ranks for two years, you promote her to sales manager.

To your surprise, she starts to flounder in this new role. It rapidly becomes clear that she struggles with delegating tasks, motivating her team, and resolving conflicts—all essential components of effective leadership. Her ability to close deals doesn’t translate into leading a team to achieve similar results.

Why didn’t she succeed? Because the sales organization made the common mistake of equating high performance with high leadership potential.

Identifying future leaders within an organization is more complex than it seems. Too many companies incorrectly equate job performance to leadership potential. They rely on the misguided assumption that the skills that make people top performers are the same as those that are needed for them to develop and lead high-performing teams. The reality is that the skills required for effective leadership often differ substantially from those necessary for individual high performance.

That’s a costly mistake. Most organizations have a significant shortage of leaders for key positions and a poorly developed leadership pipeline. Promoting top talent that lacks the necessary leadership skills not only jeopardizes the success of the organization, but also risks losing a valuable high performer.

Why do organizations struggle to identify high potential leaders?

In a Korn Ferry survey of talent acquisition professionals, more than a third (34%) said their organizations were missing high potential leaders by not looking deep enough in their organization. And only 14% felt very confident that the right people were being selected for their high potential program.

Why is this happening? It’s because most organizations conflate performance with leadership potential, but strong performance in many roles requires quite different skills than those needed to become a successful leader.

Many organizations think they know who has high leadership potential, but they frequently get it wrong. Only 30% of high performers are also high potentials. The remaining 70% only have what it takes to succeed in a lateral or similar role focused on the similar competencies they’re currently using for success.

How can you tell the difference? By looking at what your top performers are actually “good” at—and not assuming that they’ll automatically be “good” in a new role that requires an entirely different skill set. It all comes down to how high performance and high leadership potential is defined.

High Performance

High performance is the consistent delivery of results over time in a particular role. When looking at whether high performance could translate into future leadership, organizations need to consider two things: how similar the new role is and whether the person succeeded on their own or with the contributions of others.

High Potential

Potential, on the other hand, is not about the current state but about what could be in the future. It’s a person’s capacity and interest to develop the qualities required to perform well in a different role. To measure potential, an organization should look for superior performance under conditions that are new or different from the person’s current role.

How can organizations distinguish a high potential employee vs. a high performer?

Organizations need to probe deeper than key performance indicators to determine who might make a great leader.

First, high performers excel in their specific tasks. Their success often relies on their individual skills, technical expertise, or unique approach to problem-solving. Leadership, however, requires different competencies, such as people management, strategic thinking and the ability to inspire and motivate others. As a result, an exceptional individual performer might struggle to transition into a leadership role.

Second, identifying potential leaders involves recognizing soft skills and traits that might not be directly evident from performance metrics. These include emotional intelligence, adaptability, a readiness to take on responsibility and learning agility. Unfortunately, these qualities can be hard to quantify and measure, making the identification of potential leaders particularly challenging.

Further compounding this challenge is the fact that potential leaders might not be aware of their own potential for leadership. Without proper guidance and development, these individuals may be overlooked or may not fully realize their leadership capabilities.

Lastly, companies often lack a systematic approach for identifying leadership potential. Without a structured process that includes regular talent assessments and career development opportunities, organizations struggle to identify and cultivate their future leaders.

Talent Acquisition

Finding talent that sees you through today and tomorrow

What steps can organizations take to identify high potential employees?

Identifying talent with future leadership potential requires a shift in focus from current performance toward a more holistic evaluation of a person’s abilities and potential. Adopting a strategic, systematic approach to talent identification and development is necessary to pinpoint high potentials, according to Sarah Hezlett, President, Assessment Science, North America, Korn Ferry Institute, and James Bywater, Senior Client Partner, EMEA. Here is the path these experts recommend.

1 Recognize the trap of confusing performance with potential

Bywater observed, “Left to their own devices, people will fall into this trap when selecting leaders. If you recognize it, it’s easier to break the cycle.”

To avoid this problem, Bywater advises going on a formal hunt for talent. “Organizations need to look for what they need in the future rather than only for now,” he explains. “What employees do today may or may not overlap with what they will need to do when they are promoted. In a new role, they must move from using their own expertise to delivering through others.”

He recommends that organizations be explicit about where they want to go. “Define what good looks like, then go out and hunt for it. If you want a leader who’s going to get the best out of their team and engage them, you’re looking for people agility. You want to make sure you’re measuring that trait. So, organizations need to look specifically for that trait and have some structures in place to develop it, including training and mentoring.”

And learning agility, the ability and willingness to learn from experience, and subsequently apply those lessons to perform successfully in first time conditions, is also increasingly important and needs to be measured.

2 Rethink the available career paths

Bywater recommends that all organizations find a way to manage people who are technically good and valuable, even if they do not make great leaders. “Organizations should consider building different career paths. They could have one set of promotions for people who build their job-related skills and another for people with leadership skills,” he says.

There are tools that can help with this, such as Korn Ferry’s Critical Role Index. Hezlett explains, “This tool shows where an employee sits in the organization and how well your current skills align with adjacent functional areas. It identifies lateral roles that employees could move into to grow a broader set of capabilities that would allow them to advance.”

3 Create a data-driven Success Profile

The key to success in future leadership roles isn’t studying a snapshot of a person’s performance today. It’s knowing what correlates to success at the next level.

Hezlett suggests that organizations create a Success Profile for each key position. “A Success Profile includes the competencies, traits, drivers and experiences needed for the next role. It combines what we know about work, roles, people, behavior and performance, bringing together role requirements and the details of the person who would be successful in that role. Organizations can then compare candidates to the Success Profile specific to the role and determine whether they need to fill any gaps with development to build leaders.”

How to unlock the leadership potential of your talent

Our research shows that 50% of organizations want to promote from within. But only 11% of organizations are satisfied with the returns on their high potential programs. Are you one of them?

If so, read more about how to unlock leadership potential in your organization. Then reach out to learn how our experts can help you identify the potential hidden in your employees with effective leadership and development strategies today.

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