High-potential employee

What is a high-potential employee?

A high-potential employee is someone the organization judges able to grow into much larger roles than the one they hold today. The label is about future capacity, a separate judgment from current performance. Companies differ on whether to tell people. Douglas Ready, Jay Conger and Linda Hill describe this debate in HBR, with some executives preferring secrecy to protect the morale of those left off the list.

Why it matters to a revenue leader

In sales, it is tempting to treat this year's top seller as the high potential, yet selling well and managing well are different jobs. A PE-backed services company adding branches needs future branch managers, and the high-potential list is where that bench starts. Jean Martin and Conrad Schmidt reported in HBR that nearly every company runs programs for its rising stars, yet roughly a quarter of high potentials expect to leave within a year. A revenue leader who names high potentials without a plan for their growth may watch them leave for a competitor's management role.

A regional VP at a fire protection company reviews her bench ahead of branch manager openings expected next year. The high-potential list includes a mid-ranked seller and leaves off the top producer, who stays on the selling track with a larger territory. Each gets a development plan that fits the path they are on.