The Predictive Indicators of Leaders With High Potential

In recent years, the "9-box" has become a nearly universal template for identifying high potential ("hipo") leaders, thanks in part to its highly publicized usage at GE under CEO Jack Welch in the 1990s.

However, this template provides absolutely no guidance on how to define "high potential." Most organizations define it as "the potential to reach a certain level (e.g., vice president) within a specific time frame (e.g., five years)", but that definition is not helpful to smaller companies that have few management layers. Also, most organizations have difficulty differentiating genuine hipos from those who are solid performers but have limited potential to succeed in bigger, more complex roles.

As noted in Harvard Business Review, only about 30 percent of high-performing leaders have significant advancement potential. Put another way, 70 percent of high-performing leaders do not qualify as "high potential"! What this suggests is that a track record of high performance is a necessary, but not sufficient, factor in determining advancement potential.

As a former head of talent management for a major corporation and now an executive coach and succession planning consultant, I've observed hipos and senior executives up close and have catalogued a set of 15 predictive indicators that help identify those with the most advancement potential. Keep in mind that no individual will demonstrate all 15 indicators, but genuine high potentials will demonstrate more of them than individuals with less potential. The indicators are:

Highly inquisitive

Seeks and uses feedback

Self-confident in a non-arrogant way

Is a lifelong learner

Is a "straight shooter" who is able to be direct without being disrespectful

Takes full accountability and never makes excuses

Exhibits business acumen (e.g., when presenting to senior management, links their analysis and recommendations to real business issues)

Embraces opportunities to step outside of their comfort zone

Highly proactive (versus reactive) in their approach to getting things done; is a self-starter who takes action without waiting to be asked/told

Resourceful; able to figure out a path forward when faced with obstacles or situations with a high degree of ambiguity

Has high "reserve capacity" (a good analogy is two college students studying for the same test; both achieve an A, but one required many more hours of study than the other; same result, but vastly different expenditures of time and energy).

Views issues cross-functionally and avoids "silo" thinking

Exhibits an "outside-in" perspective (e.g., is aware of external best practices and industry trends versus thinking "inside the box" of their company)

In terms of time management and prioritization, balances the urgent and the important

Is outcome-focused (versus activity-focused) and exhibits ROI (return on investment) thinking when considering where to allocate time, money, and resources

How to Develop Your Hipos

Once you have identified your hipos, what are the best methods to develop them? Our work with a wide range of clients, along with research conducted by other consulting firms, clearly demonstrates that the best development occurs from experience-based, on-the-job learning. However, the experiences must be outside of the leader's comfort zone, not core activities within their day job that they can perform in their sleep. Special projects involving complex, cross-functional problems where every member of the project team is outside of their comfort zones are ideal vehicles for accelerated leadership development.

These types of projects are a version of "action learning." The principles of action learning can be applied to individual leaders, too, not just groups. For example, if you have a middle manager who exhibits most of the indicators listed above, have them do a short individual project on a topic relevant to your business (e.g., a research project focusing on competitors, customers, or external trends that could impact your business), followed by a 30-minute presentation to a group of senior executives. A project of this type can have a positive impact on several leadership competencies, such as strategic thinking, business acumen, and effective communication.

Stephen Hrop, Ph.D. in industrial and organizational psychology, is vice president of organizational development services at Caliper.