Whether to tell high-potential candidates they’re on the fast track can be a tough decision. Some organizations skirt the issue for fear that egos will erupt or that the motivation of those not selected for leadership development will wane. Others argue that having a defined protocol for communication and transparency when it comes to high-potentials is key to organizational success.
Organizations that tell high-potential employees they’re special can see increasing engagement, according to a survey conducted by the Center for Creative Leadership (CCL) of 199 participants in its development programs. A 2010 CCL report titled High Potential Talent: A View from Inside the Leadership Pipelinereveals that a majority of respondents (77 percent) said it was highly important to them to be formally identified as high-potential employees. In fact, only 14 percent of those who were formally identified were looking for other jobs, compared with 33 percent of respondents who said they were informally identified as such.
“Identification has a retention benefit,” said Cori Hill, director of high-potential development for Minneapolis-based global leadership development firm PDI Ninth House, on Aug. 16, 2012, during a webcast titled “Your High-Potential Leaders: Tell or Don’t Tell?” hosted by The Conference Board.
“High-potentials want to have a picture of where they are going and to understand next steps in terms of development, experience and movement,” notes the CCL report. But being formally identified as high-potential also can spur employees’ anxiety and increase the pressure they feel to perform.
Companies that develop a mature leadership development strategy for their high-potentials can ensure that they have a sufficient bench of capable leaders who are ready to move up, according to research conducted by Oakland, Calif.-based consulting firm Bersin & Associates. Its December 2011 research report, The Art and Science of Building a High-Potential Strategy: Key Practices to Maximize the Performance of Top Talent, states that the higher the level of strategy maturity, the greater the business impact. Organizations with the most-mature strategies have the greatest level of transparency, openly sharing information about their high-potentials with human resources, other business units and high-potentials’ leaders, as well as with other employees.
Hill said it’s important to assess the maturity of an organization’s practices and to “create consistency prior to transparency.” In the Bersin study, 295 talent managers surveyed reported that their companies fell into one of five categories along a five-level high-potential strategy maturity continuum:
- Reactive high-potential identification (11 percent).
- Inconsistent high-potential identification (10 percent).
- Standardized high-potential identification process (31 percent).
- Transparent high-potential program (29 percent).
- Business-integrated high-potential strategy (19 percent).
Not all elements of an organization’s high-potential strategy will necessarily fall into the same maturity level, and organizations can move from one maturity level to another, notes the report. Further, the report notes that neither financial resources nor company size affects the level of maturity a company can achieve.
But, Hill said, disclosure really shouldn’t happen until a company reaches the level of standardization since that’s where “practices are becoming commonly accepted” and where communication strategies like those used at The Dow Chemical Co. are being developed.
“It’s critical to know your organization’s culture and [whether transparency] would fit,” said Dawn L. Baker, GPHR, high potential program director in human capital planning and development for Dow, who also participated in the August webcast.
What Dow Does
Dow, a global chemical company based in Midland, Mich., has identified high-potentials for 15 years but began systematically telling them their status in 2010, Baker explained. Before that, some leaders communicated within their businesses or organizations, while others were less transparent.
About 7 percent, or 1,500, of Dow’s 23,000 employees currently are identified as high-potential, Baker said. To frame the conversations, Dow developed a “message map” that it shares through HR business partners so everyone “is really talking from the same playbook about why we have a high-potential[s] program and what we’re trying to accomplish,” Baker said.
“In the past, we would talk about the list of high-potentials, who was on the list and who was off the list,” Baker said. “And, as you can imagine, that doesn’t give much substance when you’re communicating.” Instead, she noted, the procedure needs to be comprehensive so that “if you do communicate, you’ve actually got a structure to communicate vs. [just keeping] ‘the list.’ ” Working closely with HR business partners is key, she said.
Baker said it’s not enough to just tell someone they’re a high-potential. It’s also important to share what criteria they met to become so and what’s expected for them in the way of performance going forward. Communications also should stress managing expectations; employees need to know there’s no guarantee they’ll remain in the program.
Dow’s communications also provide an overview of development opportunities and increased exposure, coaching and mentoring that the person should expect. The employee also is asked if he or she wants to be a part of the program, and can opt out, Baker said.
Navigating the Tougher Conversations
Dow works to ensure that leaders don’t dodge the tougher conversations with employees who aren’t considered high-potentials or who once were but no longer are. Leaders are encouraged to tell employees that the program is dynamic and revisited annually and to clearly explain why the decision was made.
“We believe it’s much better to have that upfront discussion … vs. figuring it out slowly and really quite painfully,” Baker noted. The company works closely with HR business partners to ensure that conversations are “upfront and clear” and that the employee is reassured that he or she is a valued member of the team.
Finally, Baker recommended using stakeholder analysis to frame the argument for communicating a company’s high-potentials program strategy and referencing research that shows how transparency around the program might benefit the organization.
“We believe that the benefits of communicating do outweigh the risks,” Baker said. “The risks are very real, but we accept that in our movement forward.”
More Guidelines for Transparency
The topic will be addressed further in October at The Conference Board’s Succession Management conference, to be held in New York. In the meantime, Hill offered these other recommendations:
- Be sure the company’s broader HR community supports transparency.
- Involved HR in change management plans.
- Ensure managers agree with the benefits of transparency.
- Make sure managers receive “full support.”
- Clearly communicate the criteria applied when selecting high-potential talent.
- Improve managers’ coaching and development skills, if needed.
- Build in accountability, and be sure to complete development and career plans.
Pamela Babcock is a freelance writer based in the New York City area.