What distinguishes people who succeed at the next level is potential, the ability to adapt and grow into increasingly complex roles.
Why it matters when the plan changes
Organisations concentrate their scarcest development budget on this group, so the selection decides where several years of investment go. What the label claims to predict is the capacity to adapt and grow into increasingly complex roles, not current competence, yet it is one of the least evidenced decisions in talent management, frequently made from current performance and visibility to senior leaders. Where the criteria used are loosely defined, the same imprecision that makes prediction unreliable can also produce selection rates that differ by group, the pattern regulators have long treated as a signal of adverse impact.
The tension is that identification changes what it measures. Being named high potential brings access, sponsorship and stretch assignments, which make subsequent success more likely regardless of the original judgement. The list partly creates its own validation, which is why outcomes cannot be used as straightforward evidence that the selection worked; the cohort that succeeds is also the cohort that was given the investment to succeed.
In practice
A cohort is selected from performance ratings and the recommendations of senior leaders. Over five years the cohort outperforms, and the programme is judged effective. The cohort also received the visible projects, the sponsors and the promotions. Nothing in the record distinguishes the prediction from the investment that followed it.
Evidence
What predicts success at more demanding levels is the ability to adapt and grow into increasingly complex roles, rather than current competence.
Claudio Fernandez-Araoz, 21st-Century Talent Spotting, Harvard Business Review (2014)Selection rates below four-fifths of the highest group's rate are treated as evidence of adverse impact, which loosely defined criteria can produce.
Uniform Guidelines on Employee Selection Procedures, 29 CFR Part 1607 (1978)
What it cannot tell you
High-potential identification cannot tell you whether the label caused the outcome or merely accompanied it. Once someone is named, they receive sponsorship and stretch work that raise their odds of success independent of the original judgement, so later performance cannot confirm the accuracy of the original selection.
Questions
Claudio Fernandez-Araoz argued in Harvard Business Review in 2014 that what predicts success at higher levels is the ability to adapt and grow into increasingly complex roles and environments, not current competence. Performance today is the most available proxy for that capacity and a poor one, because the next level's demands often differ in kind.
Because it predicts something that has not happened yet, usually from evidence about something else, and because visibility to senior leaders correlates with being named. The judgement is often accurate about who is currently impressive and silent about who could carry a harder role.
Yes, which complicates any evaluation. The label brings sponsorship, stretch work and attention, all of which raise the chance of subsequent success. A cohort that outperforms may be evidence of good selection, good investment, or both, and the record rarely separates them.
Under the Uniform Guidelines on Employee Selection Procedures (1978), a selection rate for any group below four-fifths of the highest group's rate is treated as evidence of adverse impact. Loosely defined criteria that let familiarity substitute for evidence can produce exactly that pattern, and only measuring the rates by group will reveal it.
Defining what the roles the plan will create actually demand, then assessing against that demand with evidence that can be inspected. It makes the judgement specific, perishable and checkable, which is less comfortable than a standing list and considerably more useful.