One of the main challenges in understanding what we mean by potential in the organisational world is that potential itself is rarely clearly defined. Instead, we often see attempts to define “high potential” directly or merely to describe high-potential individuals.
There is no universal consensus on what potential actually means. Partly, this is because organisations, academics, consultancies, and test publishers develop their own definitions and models of potential, based on different criteria, such as demonstrating organisationally defined leadership capabilities, the ability to move up a certain number of levels within a few years, or the capacity to take on additional responsibilities or work across different functions. Partly, it is because we like to believe that potential is something that really isn’t.
The purpose of this article is to take a quick look at dictionary definitions of potential, to consider an accurate work-related (although perhaps not particularly flashy) definition, and to briefly explore why this definition might be somewhat disappointing.
Dictionary definitions of potential
According to The Oxford English Dictionary, potential can be generally defined in two ways:
- Possessing potency or power: being potent, powerful, mighty, or strong.
- Possible as opposed to actual: existing in a latent or undeveloped state, capable of coming into being or action.
Similarly, Merriam-Webster defines potential as either:
- A noun: something that can develop or become actual; or
- An adjective: existing in possibility, capable of development in actuality.
At first glance, these definitions point to two different concepts: potency/power and potentiality/possibility. Aristotle articulated this distinction clearly; he defined Power as the capacity in A to produce a change in B, while Potentiality is the capacity in A to pass into a new state of itself. Potentiality concerns possible states that A can become, which is distinct from actuality, what A currently is. Aristotle illustrated this with the analogy of the finished statue of Hermes versus the Hermes latent in a block of wood.
Power is present-focused, concerning capabilities already possessed, whereas Potentiality is future-focused, concerning what something could eventually become, depending on intrinsic characteristics and external factors. For example, a block of wood could eventually become a statue, an ashtray, a table, or remain just a block of wood if nothing happens to it.
A work-related definition of potential
This distinction is more than rhetorical; it fundamentally changes how we can think about individuals.
If we mean Power, it refers to something that an individual currently has, an inherent ability or capability that can likely be observed or assessed. For example, we might say someone is powerful, capable, or already able to do something. However, although potential can be conceptualised as power, organisations typically focus their practices on future states. Once the focus moves from the present to the future, we enter the realm of possibility.
If we mean Potentiality (or possibility), we are talking about someone outside the individual being assessed judging which future states of that individual are most likely. In other words, potential is an attempt to predict or estimate an individual’s future, made externally rather than being something the individual currently possesses. Saying that someone “has potential” is equivalent to saying they have a “quantum of possibility” for something within them that can be identified and assessed.
At Atelier Insights, we define potential as:
An estimation of the likelihood of an individual being able to do or become something in the future within a specific organisational context.
Breaking this down:
- Estimation: We do not measure possibility directly; we make an informed estimation.
- Likelihood: We are talking about possibility, something that may or may not happen.
- Something: The future state must be defined (potential for what?).
- Future: The future is unknown, unpredictable, and cannot be easily assumed.
- Context: Individuals are not isolated; external factors help or hinder performance and condition behaviour.
Potential disappointment
This definition may be disappointing for those whose idea of working with potential is to invest most resources in identifying and developing a small group of exemplary individuals, those expected to become future leaders and guarantee organisational success within a set timeframe.
Beyond unrealistic expectations, attempting to predict an individual’s future in a linear, deterministic way is inherently problematic. It does not account for contextual changes, unpredictability, and uncertainty.
Some researchers warn of the risks of selecting people based on today’s success models rather than considering the unknown model of tomorrow. Others argue that someone who is the “best fit” today may become a “misfit” tomorrow, given the constantly changing and discontinuous nature of environments. Still others reinforce that potential is uncertain by nature: individuals labelled as high-potential might achieve greatness, but they might equally not.
Some other implications
According to research, potential-related practices are supposed to:
- Increase commitment, engagement, motivation and loyalty in employees labelled as HiPos
- Generate sense of obligation and reciprocity in individuals labelled as ‘high-potentials’, driving them to improve their performance
- Help organisations reduce costs by not investing in the whole workforce and guarantee higher return on investment
- Motivate those not labelled as ‘high-potentials’ to work harder to be considered as such.
However, these can also…
- Decrease commitment, engagement, motivation and loyalty in employees not labelled as HiPos (usually 80-90% of the workforce)
- Increase perceptions of injustice and favouritism while decreasing diversity in the workforce, as labelling processes are usually based on subjective, biased judgements
- Hide elitist and discriminatory behaviours. Because of this, transparency levels tend to be low and strategic ambiguity high (For insights on transparency in high-potential programmes please read our article: High-potential practices: The transparency dilemma)
- Increase HiPo’s expectations, driving them to change job. This of course causes organisations to lose their investment
- Discourage personal development organisation-wide, undermine teamwork, increase jealousy and create an atmosphere of negative internal competition, all this in part due to overreliance on individual performance.
From a commercial perspective, one of the key problems with potential-related practices can be illustrated, if we borrow and repurpose a quote from Graham Greene (Our Man in La Havana): “As long as nothing happens, everything is possible.” In other words, it is not difficult to promise. or to sell services that promise, possibilities.
Additionally, demonstrating return on investment is particularly challenging, primarily due to development programmes and self-fulfilling prophecies. It is also complicated because individuals labelled as high-potential often leave their companies when their high expectations are not met. In our view, the only way to meaningfully evaluate the “effectiveness” of related assessments is to assess individuals and then refrain from intervening. After a few years, one could then examine whether the assessment accurately predicted outcomes and determine whether those outcomes were genuinely due to the characteristics assessed rather than other factors (e.g., being the CEO’s relative).
Let's finish with an analogy
Let’s imagine for a moment that life in your organisation is like having marathons, and for each level in the hierarchy you have peers that are going to run in the same marathon.
Before the marathon, you want to predict which runners will
finish the marathon first. You believe that blood is important, so you take
blood samples and differentiate them by levels of sugar and red cells.
You also compare their blood to successful runners’ blood and get to the conclusion that 20% of your runners have what it takes to be winners, so you put them in a special list and call them ‘winners’.
As you already know that your ‘winners’ will win, and as marathons take a lot of time, you decide to accelerate things by giving them bikes. Thus, they will finish the marathon sooner and you will have your ROI for the bikes.
The marathon starts. Not a surprise that those with bikes are going faster than those running. But certain things are starting to happen that you weren’t expecting.
One of your ‘winners’ decides to go to another competition where organisers give motorcycles instead of bikes. And some of the runners decide to walk as they are already being considered as ‘losers’.
Demotivated, some of your runners go to another competition where their effort can make a difference, and some walkers decide to stop walking. Meanwhile, your ‘winner’ is getting stuck in mud that you didn’t anticipate.
Some of your runners and walkers are better equipped for mud, but they are getting tired because they didn’t receive proper training. And your ‘winner’, frustrated by not feeling like a winner, is considering quitting.
Your ‘winner’ decides to go to another competition hoping to feel like a winner again (i.e. you lost your investment). And some people who were doing well in the mud are going to another competition where they think their strengths will be valued.
Meanwhile, you have been hiring people with the same blood characteristics of your initial ‘winners’, losing diversity. Now, you’re considering assessing other blood characteristics instead and to start all over again.
Author: Sebastian Teijeiro
