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'High-Potential' Term Losing Luster

While employers still may use the term "high potential" in describing their leadership programs, the term is falling out of favor, says a recent survey.

Thursday, November 14, 2013
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If the results of a recent survey are any indication, the term "high potential" and the programs it describes are heading for the dustbin of outdated HR concepts.

According to a survey of more than 450 organizations by AMA Enterprise, a learning and training solutions division of the New York City-based American Management Association, only one-quarter of companies surveyed currently use the term, and as many as 42 percent won't use "high potentials" at all, especially when communicating with employees.

Sandi Edwards, AMA Enterprise senior vice president and the study's author, says employers are avoiding using the term "high potentials" for individuals selected for career development and advancement opportunities mainly because the term is vague and confuses employees. On the other hand, she adds, some companies (18 percent) report using the term because, while they are sensitive to the negative overtones, they haven't found a better way to say it.

The survey asked respondents about employees' attitude toward selection for their high-potential program. Only 14 percent regard their program as fair and even-handed, while 24 percent see it as "flawed but well-intentioned" and another 34 percent view it as "partial and political."

"If only certain individuals are identified as 'high potentials,' where does that leave the rest of the employees?" asks Edwards. "Unfortunately, the term itself suggests most employees may not have much potential and this isn't a healthy message for either them or the organization in general."

 In fact, the appearance of exclusivity plays a key role in the waning use of "high potential" and its use to describe programs, Edwards adds. "Of course, people who aren't selected may feel excluded or passed over," she says. "There's understandable resentment stemming from the perception that the program itself is not fair."

 Edwards adds that, over the past year, she met with many large clients who expressed sensitivity to using "high potential" in their development programs. Her advice to clients is to be very clear and transparent, regardless of the term they use to describe this type of program.

"If you are going to have development for special people, you need to clearly say how they are selected," she says. "And you also need to explain it so if people don't get selected, they can learn steps that may help them be selected in the future.

"Talking to people as I go to conferences and [meet with] clients, it clearly is the beginning of a trend," she adds.

Several talent management experts and corporate coaches agree that "high potential" has lower value in today's HR landscape.

Edith Onderick-Harvey, president of Andover, Mass.-based Factor In Talent, for example, doesn't mince words.

"Management terms come and go, and it seems that 'high potential' is going," she says.

Onderick-Harvey says that the CEO at a recent client meeting had a strong negative reaction to the term while the company was implementing its first talent management process. While Onderick-Harvey explained to the CEO that high potentials are people who have the potential to be in leadership roles in the next several years, the CEO wasn't convinced with the term's use.

"In my experience, companies have found it to be too vague," she says. "The question often came back to 'potential for what?' "

She agrees that the term is much too broad, yet as the AMA's research mentions, many employers are struggling on how to identify these future leaders.

"They are not sure what to call them," she says. For the unconvinced CEO, she offered the term "next -generation leaders," which the company accepted as a good alternative.

Onderick-Harvey says that in some cases there are employers who have a ratio of more high potential people than actual leadership positions -- another reason to avoid the term when creating such programs, she says.

Dan Markin, a consultant who provides HR leadership training/consulting to various institutions and organizations, including Harvard Business School, ARAMARK, Wendy's International and Home Depot, says while he doesn't personally find the term falling out of favor in his work, the AMA research makes sense. Why? Because, he says, falling out of favor are positions for "hi-po" employees to fill.

"It is due to organizations showing reluctance around growth," he says. "When many organizations are going through downsizing and cutbacks, there is not ample room for the growth of human capital."

 As a result, many people labeled high potential end up leaving these organizations to advance their careers.

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"The number of 'hi-po' employees that an organization has must be directly correlated to the number of positions that the organizations anticipate to be filled," he says. "After all, if you do not have jobs, you don't need people."

 Leslie Ungar, a communication and leadership coach in Akron, Ohio, says the HR world should take a lesson from the sports world when it comes to the use of high potential in describing employees or creating programs.

"Coaches dropped the word potential a long time ago," she says. "To me, potential is not only NOT a positive, it is a negative. It is not potential that gets results. What matters is the execution of current skills and strategies, not the potential for a skill or strategy to emerge in the future."

Ungar says companies are moving away from the term because it has little value as boards and senior management want production and profit now, not the chance of it in the future. She also doesn't see the downward trend of the term high potential as a sensitivity issue. Rather, it's a common-sense issue, she says.

"NBA players get basically the same contract in their first year," she says. "They prove themselves and then they reap rewards in their second contract, when they have results not potential. Employers need to follow that sort of thinking."

So what can HR leaders do if they sense that the term "high potential" and high-potential programs are proving ineffective? And, at the same time, how can organizations continue their career-advancement and leadership programs without offending those not chosen for them?

Markin believes the best remedy for this is to ensure that all employees have clear, specific development plans, which should be generated and driven by the employee themselves - with interaction from his or her supervisor and HR.

"This ensures that everyone is on the same playing field, which not only fosters better employee relations, but [means] the workforce will be constantly improving," he says. "And that means better business results."

According to Edwards, the wide perception of unfairness has no easy quick fix. She says that no matter how open or equitable a career development program may be, there will always be those who think it's elitist or unfair.

"That goes with the territory," she says, adding that it's the job of those who administer these initiatives to do all they can to communicate widely and clearly about opportunities, for selection criteria to be clear and uniformly applied, and for there to be ample development alternatives.

"This balancing act may be one of the most daunting challenges faced by HR and development professionals today," she says.

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