Potential or Achievement

Anyone working in a large organisation will be familiar with the talent matrix, the 9-box model used  to score high potentials.

A recent survey by SHL suggests we have good leadership in the UK at the moment but might struggle in the future because we’re not getting people with potential coming through the pipeline.

From the 25 countries in the SHL database it was Mexico, Turkey and Egypt who have the greatest source of potential future leaders. The UK fell 18 places and out of the top 20 and Hong Kong dropped from 1st to 20th position.

AN SHL spokesperson said that; “the UK  has a leadership time bomb on its hands if  it doesn’t invest in learning and development to cultivate future leaders. Rising education standards in other countries along with a culture of entrepreneurialism are factors driving the emerging economies such as Brazil, India, Mexico, and Turkey, up the rankings for future leadership potential. These nations have a huge growth opportunity if they can identify, nurture and develop this potential“.

In their survey SHL found that only 1 in 15 managers and professionals qualify as effective leaders today but there are six times as many managers who have the potential to develop if they are targeted for investment. And note the word “if”. No doubt SHL would love to help them identify and develop their potential.

So little in the way of hard facts and the future may turn out differently depending on investment.

But given a choice between choosing someone who was a proven leader with solid achievements and someone who had potential what should UK plc do?

Researchers have found that in some situations people will choose potential over achievement. They asked participants to choose between two candidates and select the one who they thought would do better in 5 years time.

They both had the same qualifications but one had two years of high achievement compared to no experience but a high potential score – perhaps surprisingly the participants in the experiments chose the high potential, “the next big thing” even though they accepted that objectively the experienced candidate was the stronger.

And that reasoning applied not just to job candidates but to evaluations of restaurants and stand-up comics. The research, published in the Journal of personality and social psychology (2012), suggests that using potential can be an effective means of persuasion whether in getting a job or winning business.

The recession however may have turned the research on its head. PWC’s Key Trends in Human Capital report 2012 states that productivity is at a 5-year low since 2011.

This is partly because payroll costs rose 16% from 2009 to 2011. And the reason? Organisations turned to more experienced, and expensive, managers to get them out of trouble rather than inexperienced but cheaper alternatives.