Home > Talent Insights Blog > How Many High Potentials Do We Have?

Authored by: Roger Pearman and Robert Eichinger

How many High Potentials do you need? Most of the time, the answer is more. In our collective 90 years in the practice of Talent Management and Succession Planning, we have never experienced a surplus of talent on the bench who were ready to assume top management roles.

Too many times, organizations have to go to an outside search firm to find talent at the top.  And, if your organization hasn’t been developing your own talent, what leads you to believe other organizations have done that important work, and that you can draw their talent to your organization?

Defining Potential

There is a great struggle in the Talent Management field to define potential. For us, it’s a set of research-based Knowledge, Skills and Attributes (KSAs) that lead to growing and developing the capabilities needed in the moderate and long-term future for an organization to prosper.  People with High Potential (more so than others) are lifelong learners with the drive, curiosity and learning agility to learn and grow into roles of great accountability.

Roughly, the talent set of High Potentials is made up of cognitive skills, drive, learning agility and EQ.  We have detailed the set of gifts in our library of Drivers, Markers, and behavioral Practices of Potential.

How many are there in the labor force? Looking at college graduates, about 5% would qualify. We know that High Potentials have exceptional intellectual capabilities which automatically puts them in the top 7% of the population for that capability. But, they don’t all go to college. They don’t all go into business. Some start their own companies. Some go to Higher Education, join the military, enter the government sector, and/or contribute in non-profit organizations. So, it is less than 5% that choose to go into the private sector.

They are not evenly distributed across all organizations or sectors. They are not distributed geographically – there are typically more on the coasts than in the US breadbasket. There are more in high tech. on Wall Street and in consultancies and consumer products companies. Depending upon your business orientation your organization may not get a proportionate share of High Potentials.

There are three ways to look at how many High Potentials your organization needs to prosper and flourish. The three standards are Absolute (or Population Normative), Relative and Competitive.

A Playful Analogy

To make the point, let’s assume your organization would benefit greatly by having tall executives. Much of your success will be driven by height of the top team. Your product is basketball equipment—standards, rims, nets and courtside accessories. To sell them to your customers, all of your top managers have to be able to touch the rim and, ideally, dunk in order to demonstrate durability and overall quality. You’re looking for a unique, physical and credible sales presentation, after all.

Let’s declare that the top 5% of people in the US are 6’ 2” tall. So, your top managers would have to be 6’ 2” tall or taller. Outside of some sports organizations, it’s unlikely that all of the top leaders are at least 6’2” tall, or taller. Now let’s look at the three standards:

  • Absolute (or Population Normative) Standard – How many absolute High Potentials do we have? It is easy to measure. Who is at least 6’2” tall? None? Three? Twelve? All but one?
  • Relative Standard – Who in MY organization are among the top 5% in height?  They may average 5’ 11”, and none are over 6’ 2”, but they are MY TALLEST. They are MY HIGHEST POTENTIALS.
  • Competitive Standard – How do my top leaders compare to the height of my basketball equipment competitors? Are we taller? The same? Shorter? If we are taller, we believe we will dominate the market. We’ll trail the field if we are shorter.

Defining the Standards

When it comes to High Potentials, there are three questions:

  1. How many true (verified) High Potentials do we have that I can confidently predict would reach the top and perform well anywhere? This is the Absolute of a Population Normative Standard. The answer could range from none to many.
  2. Who are my highEST Potentials? This is the Relative Perhaps my industry or geography or marketplace does not attract many (if any) absolute High Potentials, but these are my highest potentials. Our success rests with them.
  3. How do my best Potentials stack up against the best Potentials of my competitors? That’s the Competitive If mine are more capable and with a higher upside, then I win. If less, I lose.

The main question remains “how many do I need?” And the answer is almost always: more!

Many organizations have to contend with the Competitive Standard. Are my best people better than the best people my competitors employ?

All organizations should look at the Relative Standard. Always identify your top 5% and invest in their development and retention (two highly related activities).

The Absolute Standard, which we also call the Gold Standard, should be a goal all organizations strive to meet.

Well Worth the Effort

Sourcing, hiring, onboarding, developing and retaining population normative High Potentials presents a rare opportunity, and one that creates a significant, competitive talent-based advantage. Whether identified in the Absolute sense or from a Competitive or Relative standard, High Potentials can make the difference in achieving business goals. Identify them. Verify them. Invest in them. Prosper.