By Natalie Livings & Daniel Zaba

1.    The global context.

There are a number of global and domestic trends and challenges impacting organisations. In Australia many are still working through economic recovery whilst simultaneously dealing with continued globalisation, demographic shifts, environmental issues, tight financial pressures, rise of emerging economies and increasing problem complexity. In addition, the rapid pace of technological change includes our lives being transformed by the ubiquitous presence of Facebook, LinkedIn, Snapchat, Twitter, Yammer, Alibaba and Weibo, to name but a few. Amidst this backdrop, organisations face a tightening labour market, and increasing competition for talent within and across national borders. It is therefore paramount to find ways to retain the high performing and high potential individuals you do have.

2.    Implement talent management from the top.

An organisation’s talent management strategy should be designed to enable the achievement of the organisation’s overall business strategy – by driving the quality and quantity of talent required. In order for talent management to work effectively, senior management need to be deeply committed and accountable, with the passion for talent starting at the top and cascading down. HR should be positioned as a strategic partner to the business, rather than as the talent owner. Instead, talent management needs to be owned and driven by line management, with a compelling vision and narrative understood by all. Part of this talent strategy will be identifying what ‘talent’ means to that particular organisation as well as defining what ‘high potential’ talent looks like in that context.  As outlined in our blog post 10 Key Considerations When Identifying High Potential, we consider talent to be ‘the potential to progress and perform effectively in roles of greater complexity, scale and range’.

3.     Health-check your performance management process.

To support an organisation’s talent management strategy a strong performance management ethos is needed. Line managers need to be up-skilled in setting expectations clearly, giving feedback (both positive and constructive negative) and providing effective mentoring and coaching. Some organisations have based their performance management process around metrics to such an extent that they have forgotten to reinforce the power of positive feedback. Numerical ratings, rankings, and ‘objective’ evaluations may actually reduce performance if they are not coupled with positive feedback (Bersin, 2015). In addition to harnessing performance management processes to help people to perform and excel, the departing of consistent underperformers must also occur, as these individuals can jeopardise delivery and negatively affect those around them.  Line managers thus need to be willing to differentiate their people as top, average and underperformers.

Furthermore, due to managers now having on average a span of control 20%-30% greater than they did five years ago, it is unlikely that any single manager can pick up on the nuances of every direct report. Therefore, it is important that systems are put in place to gather multi-source feedback to support robust performance conversations.

4.    Work your talent matrix.

When utilised well the talent matrix (e.g. 9-box grid) moves beyond a simple tool that gets trundled out once or twice a year for performance reviews and becomes a valuable process for supporting a high performance culture. Effective talent management thus requires a move from the tool as ‘a process’ to ‘an enabler of meaningful conversations’. Placement of employees into the talent matrix (or equivalent) should occur in a talent calibration conversation with the group of leaders who ‘own’ that talent pool. Line managers need to be making, owning and constructively discussing judgements, a process which may be facilitated by HR. They need to be able to categorise talent in a meaningful way, e.g. lateral, potential or high potential. Used this way, the talent matrix becomes a conversational tool that promotes discussion and engagement from different levels of management. Once the talent matrix is filled, clearly identified actions are required for each box in the matrix, along with a plan for implementing each of these actions.

5.    Create internal talent mobility.

Effective talent management identifies the gap between current people capability and strategic goals. Siloed organisations are an obstacle to effective talent management as the structure does not encourage collaboration and sharing of resources. Ideally, high potentials should be viewed as an organisational resource rather than as belonging to a particular business or function. In best practice organisations, a centralised committee oversees role movements, progress reviews and business impact assessment. These movements of key talent also provide invaluable opportunities for on-the-job development of these individuals.

6.    Communicate honestly.

Organisations are often reluctant to acknowledge who is on the ‘high potential’ list, however most of the time employees know, or can guess, anyway. If high potentials are informed of their ‘status’ then this can enhance retention and improve productivity (as long as expectations are managed, of course). Organisations may need to also prepare for the potential disappointment of those not identified as high potential. However, with regular robust performance conversations and honest feedback, this should not come as a surprise to those not yet identified as high potential; they will already be working on their own development plan.

7.    Develop your high potentials.

Talent management affects your bottom line: managing high performing talent well yields 22% greater shareholder return than industry peers (McKinsey & Company, 1998). Organisations that are successful at talent management identify and sponsor high potential individuals and actively manage their development. They manage succession deliberately and have transparent and fair processes for filling roles.

Organisations that manage the development of their talent well often follow the best practice 70-20-10 model (McCall, Eichinger & Lombardo, 2001). At its core the model states that learning occurs primarily from on-the-job experiences (70%), following by learning through mentoring and coaching (20%) and finally from courses (10%).

Different types of development suggestions would be identified for individuals in different areas of the talent matrix. For example, for next generation leaders/exceptional talent (often shown as the top right box in a 9-box performance vs potential grid), the organisation may consider:

·         stretch leadership opportunities (special projects, moves across geographical or divisional boundaries);

·         visibility with, and access to, senior executives; a personalised development plan which is supported with executive coaching;

·         assigning a senior mentor (cross-functional or global); and potentially

·         executive education or an executive development program.

There needs to be an understanding that some high potential stretch assignments are high-risk-high-gain. Therefore, short-term performance dips should be recognised and tolerated, with individuals being provided with feedback in order to help them reach the desired outcome of the stretch opportunity.

8.    Reward thoughtfully.

Financial incentives should only form part of any reward strategy. Research shows that bonuses are one of the lowest motivating factors in engaging a workforce (Tinyhr, 2014). Extrinsic (external) incentives such as money need to work in conjunction with intrinsic (internal) motivators such as achievement, recognition, opportunity to have an impact and career progression. High potential employees are typically motivated by challenging work and gain satisfaction from putting far more into their work than the average employee. As long as they understand how they are contributing to the organisation’s strategy and see that their efforts are being recognised in some way, then they are likely to continue to be engaged with, and retained by, the organisation.

9.    Change with the changing face of work.

Flexibility (be it hours, days, location etc.) is becoming increasingly important to both individuals and organisations. Part-time and casual work rates are rising; retaining and inspiring returning to work mothers is an issue that is yet to be fully resolved; people are mandated to work longer than ever before; and workers are less likely to stay in one career or organisation during their lifetime. Therefore, adopting more agile approaches to employment will be attractive to your high potentials (and others).

The prevalence of Activity Based Working (ABW) has also increased. This has moved beyond the hot desking paradigm to the creation of environments within the office space that are conducive to different work tasks – from a quiet place to undertake research, to areas to innovate, to a funky forum for a large workshop. Organisations providing ABW are enabling employees to concentrate better, become less sedentary, readily collaborate, be more productive and consequently enjoy working more.

10.           Hire the right people.

In order to retain high potentials, an organisation has to have them in the first place. Obviously some of this will depend on the organisation’s talent strategy (e.g. ‘build versus buy’); however it is still likely at some point to involve hiring. One of the greatest talent challenges for any organisation is to hire the right people. To have the right people enter your workforce, you need a clear but flexible recruitment strategy (Fernandez-Araoz, Groysberg, & Nohria, 2011).  Organisations cannot expect to grow without knowing how to access great talent pools from which they can attract, select, assess, and hire the right people (Bersin, 2015). It is becoming increasingly important to differentiate an organisation via branding and the experiences and relationship management processes that are in place for candidates. These differentiation points are all opportunities to reinforce the organisation’s culture so that it attracts the right people and keeps them interested in the organisation’s brand so that they can be readily accessed when they are required.

…Bringing it all together.

By adopting these suggestions organisations should reap the benefits of engaging their high potentials and meeting ever-increasing complexities and ambiguity in delivering strategic goals. High potentials are more likely to stay with your organisation if they understand that they have been identified as leaders of the future and if they are developed and rewarded in a way that is meaningful to them. Engaging high potential individuals can be difficult: they can be exceptional and demanding; they can be innovative and impatient, and they can be inspiring and challenging. This takes effort: talent management must be strategic in a way that aligns to the organisation’s business goals, and leaders and managers throughout the organisation need to be involved in attracting, identifying, developing and retaining high potential individuals.


Bersin, J. (2015). Predictions for 2015: Redesigning the organization for a rapidly changing world. Bersin by Deloitte.

Fernandez-Araoz, C., Groysberg, B., & Nohria, N. (2011, October). How to hang on to your high potentials: Emerging best practices in managing your company’s future. Harvard Business Review, 1-9.

McCall, M., Eichinger, R., & Lombardo, M. (2001) The Career Architect Development Planner. Centre for Creative Leadership.

McKinsey & Company. (1998). The war for talent. The McKinsey Quarterly: The Online Journal of McKinsey & Co.,3, 1-8. Retrieved from &L3=31&ar=305

Sage. (2013). ROEI: Return on employee investment: Increase competitiveness through your biggest asset. Retrieved from percent20HRMS/pdf/SageHRMS_ROEI. 

Tinyhr. (2014). The 7 key trends impacting today’s workplace. Retrieved from http://