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Realizing the Potential
of High Potential Pools

Leadership Practices:
What’s Proven. What’s “Worth Less.”

Title: Realizing the Potential of High Potential Pools

Formally identified high-potential leaders are an organization’s fortunate few—on average, about 25 percent of all leaders in the company, though this pool size can vary widely. High potentials are typically identified based on a combination of current performance and future potential. They are the focus of corporate energy and top management attention well beyond that received by leaders not designated as high potentials.

Gauging who’s ready for leadership has always been a daunting task, but it is only the first step. Ultimately, it is much less critical than what comes next. Even more challenging than identifying high potentials is keeping them engaged and continually growing over what could be more than a decade between their current and expected role, while reaping the financial benefits of their formidable talents.

Worth Less PracticeWorth Less Practice: Implementing a Pool But Ignoring Its Ongoing Effectiveness

High-potential identification that spans employees at all levels (rather than limiting it to just senior leader roles) is ideal. But, as shown in the DDI Leadership Databank, companies that not only implement high-potential programs, but also track and measure their effectiveness, are more than twice as likely (138 percent) to be financially successful compared to those that have an inclusive, cross-level identification process, but neglect to also measure and optimize outcomes.

Measuring program effectiveness is second only to providing mentoring/coaching as a high-impact program design factor (see below).

Impact of High-Potential Program Design Factors

Impact of High-Potential Program Design Factors

Best PracticeProven Practice: Holding Senior Leaders Accountable—and Involving Them Long-Term

Ensuring senior leader accountability for identifying high-potentials is not only a near-universal practice (more than 8 of 10 companies do this satisfactorily), but also an advisable one. But when this accountability stops short of senior leaders taking personal action in the form of mentoring and coaching, its value is limited.

Companies that consistently mentor and coach high potentials are 59 percent more likely to be financially successful. In the eyes of the high potentials, this is also, by far, the strongest driver of overall leadership development quality. It’s what keeps them (and their own employees) in the fold, progressing and generating value.

Worth Less PracticeWorth Less Practice: Over- or Underfilling the Pool

Does size matter when it comes to your high-potential pool? Absolutely! Our research shows that neither a “having only a few high potentials makes it especially exclusive,” nor a “the more in the pool, the better” mindset is best when measured against the outcomes these pools are ultimately targeting. In fact, organizations with a larger pool of high potentials (35+ percent of their leader population) risk lower levels of engagement and retention for pool members (33 percent less) than those with a smaller high-potential cohort (15 to 30 percent).

Targeting the Right Size Pool to Maximize High-Potential Engagement and Retention

Over- or Underfilling the Pool

On the other hand, organizations with too few high-potential leaders (5 to 10 percent) have an even greater risk of generating lower retention and engagement rates (45 percent less).

What factors drive worse outcomes when high-potential pools are too crowded or too sparse? Our research shows that outside—surprisingly, either above or below—the 15 to 30 high-potential percentage “sweet spot,” measurement activity sags, status information about leadership talent is missing or out-of-date, and opportunities for leaders to practice and get feedback on key skills are lacking.

Learn how DDI can help you identify leadership potential.

DDI’s Leadership Databank shows which practices are really the best—and which ones to revise or abandon.

Talk to an Expert: Realizing the Potential of High Potential Pools
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