Retaining Your Talent: Potential and Pitfalls “Flight risk” the greatest risk facing

companies with bright, new hires

A s the war for talent continues in earnest — fuelled by demo-graphic pressures of pending boomer retirement and com-

petitive pressures — organizations are increasingly challenged to identify and quickly develop their high-potential talent. This includes relatively new hires who have made an impact on their managers and results.

The annual talent review has become an eagerly awaited forum for discussion and review of work performance, psychomet-ric and 360 data, and managers’ opinions. Good talent reviews keep the organization on track, the workforce engaged, and the company viewed both inside and out, as an employer of choice.

“Flight risk” is the greatest risk facing companies with bright, new hires who feel underutilized and underappreciated. Ironically, many talent management prac-tices undermine the very talent they are trying to develop, leading to greater dissatis-faction in the ranks, and quicker departures.

The two most frequent complaints I hear from Generation Y new hires is that they are not being promoted fast enough, and that their boss or immediate supervi-sor is unwilling, unable, or unavailable to develop or mentor them into more respon-sible roles. Once management has told them they are high potentials, they seethe even more, feeling they are being damned by faint praise. Many become self-conscious about their future performance, often not knowing what they actually did to deserve the rating, and worry that they may disap-point their managers or fail to meet future expectations. Those not chosen — the mid performers — are also left out in the cold, their motivation sapped.

In fairness, the organization may be too hierarchical, too flat, too over or undermanaged, too fast or too slow, or simply too challenged by day-to-day issues

to be able to respond to their needs. But it may be already too late, as the Generation Ys are one click away from posting their resumes again to their LinkedIn and Facebook pages.

Organizations can protect themselves from alienating their “best and brightest” by avoiding the following pitfalls prior to conducting a talent review:

1. Do we know what we mean by “High Potentials”?It is so easy to get bogged down in seman-tics. Lack of agreement around the table leads to conceptual gridlock. What do we mean by high potential or leadership ability? Are we referring to capacity or performance? What about character, values, personality?

Best practice companies link potential to three or four leadership attributes exhibited by their top performers that are critical to the success of the organization. Managers

then create definitions that vividly describe these characteristics in concrete and observ-able ways, so that everyone can agree on terms. Suddenly terms like “strategic thinker”, “strong customer focus”, “chal-lenges status quo”, “understands how we make money”, become tangible.

2. Confusing performance and potentialIf you can agree on potential, how do you measure it? Past performance is not neces-sarily the best guide for future potential, especially if you are looking for “fresh eyes” or “out of the box thinking”. Some best future performers are “passed over” due to timid thinking, safe decisions, and simple bias. “We don’t think finance people can do HR, or that IT folks can move into sales.” Unless you shake up your own thinking about who can move into the next role, you run the risk of losing great people. A global

Many organizations rely on the 9-Box Grid matrix, where performance and potential are ranked with low performance/low potential rated D and high performance/high potential rated A.

First developed by McKinsey & Company, (a global management consulting firm) in the ‘70s for General Electric, the 9-Box Grid has become the standard in the field. It is simple, systematic and broad. It facilitates frank discussion, promotes ownership, and exposes leadership strengths and gaps. It can lead to robust business decisions, and keep the talent pipeline fresh and full.

» BY DR. JACK MUSKAT

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consulting firm estimates that up to 5% of people who leave go to competing compa-nies to do jobs they could have done with their previous employer if given the chance.

3. Lack of Commitment or Time to DevelopThis is where the rubber meets the road. Failure to provide your talent with oppor-tunities to grow and develop in a timely and meaningful manner can quickly erode morale, reduce performance and hasten departures. Poor communication by senior management, failure to set reasonable expectations for progression, including lack of training or further education, absence of mentoring or sponsorship, simply adds insult to injury.

In addition, companies unwittingly create “in” and “out” groups once they identify their high potentials. The former group becomes increasingly anxious about their future per-formance (especially if they don’t know how they were chosen in the first place), and the latter group, the non-high potentials, become increasingly resentful (since they don’t know why they weren’t chosen).

4. Talent HoardingAnother common pitfall is the tendency for managers to hang on to their best per-formers. Failure to share or trade talent may be an embedded cultural practice that is hard to break, without explicit sanctions or rewards. Managers need to be measured on their own ability to “develop other high potentials.” This can create the incentives for managers to take the time with high potentials, as their own performance eval-uations depend on their success with this group. Putting a tariff on talent is not only selfish but also counterproductive. Capable employees stagnate, underperform, and ultimately leave.

The key to success with high potentials is less about identification and more about conversation. It’s less about promotion and more about devotion. High potentials are looking for managers to:• Catch them doing something good and

tell them about it right away• Show them how their work is contribut-

ing to organizational success• Allow risk-taking but provide a safety net

• Offer them realistic career planning opportunities from within

Clearly the challenges are great, and with leaner and meaner structures, managers are even harder pressed to accomplish their current tasks, let alone develop the next generation of leaders. But that is what we are talking about — creating a business culture that supports and rewards our talent. It is not a matter of choice. It is a matter of survival. YW

Jack Muskat, PhD, is a Toronto-based organizational psychologist, writer and lecturer with over 25 years con-sulting and business experience with individuals and organizations. He advises senior executives and managers on selection and devel-opmental planning. Dr. Muskat is an acknowledged expert on issues relating to organizational culture and leadership, succession planning and strategic management. For the last two years he has provided execu-tive career management services to the Rotman School of Business, and is currently an adjunct faculty at the Schulich School of Business where he teaches a course on leadership to second-year MBA students.

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