Don’t Confuse Performance and Potential


Don’t Confuse Performance and Potential

Not all leaders are good at spotting potential. Here’s how they can get better.

Publish Date: November 15, 2018

Read Time: 7 min

Author: Ryan Heinl

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Someone once wrote, "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so." Sage advice in any situation, but particularly true when it comes to making decisions about people. When it comes to making unbiased decisions, humans are the absolute worst. Not only are we unaware of how our perceptions have been shaped by experiences, but we are incredibly motivated to avoid being wrong! 

This makes us incredibly poor evaluators of others and when it comes to determining who has the potential to rapidly grow and develop into a future leader (i.e. predict future) we are wrong more often than we are right. However, this situation begs the question, are we setup to be successful at doing this?

One thing that makes humans different from other mammals is that we adapt and overcome when confronted by things that we don't do naturally. In the leadership arena, we dedicate billions of dollars to a year to training new managers to be good leaders. We help them to delegate better, to interview and hire properly, to create action plans, to coach effectively, and generally understand how to be a good leader.

These are the nuts and bolts of being a leader and we dedicate billions of dollars each year to train leaders on how to do these things effectively. But when it comes to selecting the future leaders of the organization, what help do we really give them? Most of the time, none! We simply say, "Hey, who do you think we should invest in? And how long do you think it will take for them to be ready to take on that future leadership role?"

When confronted with this type of daunting decision with innumerable factors to consider, people do the best they can. They inherently pick a person based on what they are familiar with. The conversation goes something like this:

HR Person: So, who do you think has high potential in your group?
Manager: Oh, I think that Steven is a real go getter and a future leader for us.
HR Person: Great! What makes you say that?
Manager: Well, he gets results, and I can just tell by the way he handles his team.

There's nothing wrong with this scene on the face of it, but it lacks an objective perspective and one that is rooted in both data and an understanding of the difference between performance and potential. If you want high performers, that's great. We all want that. But there is a difference between someone who is killing it in their current job and someone who has the right stuff to grow and develop into the future.

Performance vs. Potential

Performance is about what has happened in the past and what is happening right now. It speaks to the results someone can get in their current job. If I'm an engineer and I have solved some incredibly challenging problems for my company, that makes me a top performer in terms of what I do—as an engineer. Leadership potential is something quite different. It has to do with someone's ability to rapidly grow into a leader, not a still higher performing individual contributor. 

It's not about whether that engineer can solve the toughest problems, it's about whether that engineer can take feedback, learn continuously, whether they're motivated to coach, develop other people, and if they even like taking on leadership roles to begin with. Performance is important but not enough for someone to be considered high potential for leadership roles. Frankly, we don't equip managers to make these choices, and it's our shortcoming as talent management professionals.

Of all the leadership skills you can think of—coaching, delegating, decision making, planning, influencing – Identifying leadership potential is by far the most challenging skill. We ask managers to literally predict the future, without training, without objective data or any real support. It's no wonder that when we ask them for potential, they tend to latch on to what they know the best—performance.

Luckily, even though it is our fault, there is something we can do to fix it. We can provide them with tools and training. While tools are easy and abundant, unfortunately they all generally measure the same thing when it comes to potential. The biggest miss for almost every organization is the training component. 

You might go out and find the greatest assessment tool ever conceived of for determining someone's potential for future leadership growth, but the input of their manager will always be closely considered. Therefore, we need to spend the same amount of effort and money on training managers to identify leadership potential as we do on things like coaching. The future of our companies literally depends on their ability to do this effectively.

3 Ways to Teach Leaders to Spot Potential

  1. Get a definition and use it. What does a leader look like in you company? How about leadership potential? In general, leaders need to be smart, enjoy leading people, and open to learning and feedback. Once you have a solid definition for a leader and for potential, use it! This requires practice and a common language for talking about potential. E.g. How do you know if someone has potential? Because they demonstrate these types of characteristics and here are some examples I have personally observed.
  2. Help managers understand bias. It's not enough just to talk about what bias is and how it theoretically works, you must get managers to reflect on when they have personally experienced bias or when bias may have impacted a decision they have made. Some are even using virtual reality these days to help managers have an immediate experience that helps them to understand what bias feels like to others and this creates greater awareness.
  3. It's about the conversation, not the chart. The greatest way to combat bias and group think in an organization is encourage productive conflict. If I say, "This is what high potential looks like for our company," when I nominate someone, I had better be able to back up that nomination with examples that relate to that definition I came up with above. And the other leaders in the room had better challenge my thinking on the matter. The goal for participants in a talent review discussion must be finding the people with the highest potential, not making sure my favorite gets on the list of high-potential people.

When everything we focus on today in leadership development is focused on the short term, is it any wonder that the longevity of companies is getting shorter and shorter? We must put enough effort into determining who the next leaders who will take our companies into the future. If you aren't doing this, then how long do you think your company has?

Learn more in our webinar series on accelerating leadership potential at all levels.

Ryan Heinl is director of Product Management and leader of the Impact Lab at DDI, where he brings innovative leadership solutions to life. He is an entrepreneur, writer, chef, CrossFitter, mindfulness junkie and occasional yogi who travels the world in search of the perfect moment (and secretly hopes he won’t find it).

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