06 Nov 2015

Potential’s Poor Performance

The 9 box grid (or Potential vs Performance matrix) is as common as cooking oil in a kitchen, just a lot less useful. This isn’t a popular message. It challenges a shibboleth, a cornerstone of many talent management systems. But, having seen the poor outcomes the grid can cause, something must be done about potential’s poor performance.

The model has its roots in BCG’s growth-share matrix of the early 1970s. Jack Welch at GE was a fan of the model as applied to people, so too McKinsey. The thing has spread like Japanese knotweed. It plots performance (what you are supposed to be doing now) against potential (what you could go on to do later). Its many fans proclaim its clarity, focus on the future as well as now, catalytic boost for constructive discussion of talent; ease of use; greater objectivity; superior weight loss results; and so on.

The only problem is it doesn’t really work that well. It sows confusion, makes honest discussions about (and with) talent difficult, generates bureaucracy and demotivates a lot of good people. Managers try and avoid performance reviews with their teams. People get disheartened unless labelled a ‘rising star’ or ‘top talent.’ ‘Valued specialists’ and ‘trusted professionals’ wander around with the nagging suspicion they’ve been insulted rather than praised.

For the grid to work, two things need to be true of potential: that it is clearly defined and relevant, and that it is independently variable to performance. Potential is neither. Rather, potential involves a notion of breadth (specialist vs generalist) and stretch (how far one can go). They’re different so you can’t measure them on one axis, even if you could measure it which brings me to the second problem. Managers find it hard to distinguish between strong performers and high potential because the two have so much in common. Bright people motivated by an organisation they believe in with relevant experience to the task in hand who work well with others, normally perform well. Performance and potential are co-variant. So, to prevent the 9 box grid collapsing into just 3 boxes, the notion of breadth (specialist vs generalist) is exaggerated and all the talented specialists end up isolated in a little box of their own, never to be ‘top talent.’

Which is a shame because what people experience (i.e. try to perform) helps shape what they can go on to do (i.e. their potential). ‘Top talent’ locked in a dark cupboard for a year or two has their potential eroded. Performance and potential are neither constant nor independent.

The desire to ‘know my place’ and for managers to be able to neatly sift their people recalls that famous comedy sketch from the same era featuring John Cleese and Ronnie’s Barker & Corbett:

Cleese: (In bowler hat, black jacket and pinstriped trousers) I look down on him (Indicates Barker) because I am upper-class.

Barker: (Pork-pie hat and raincoat) I look up to him (Cleese) because he is upper-class; but I look down on him (Corbett) because he is lower-class. I am middle-class.

Corbett: (Cloth cap and muffler) I know my place. I look up to them both. But I don't look up to him (Barker) as much as I look up to him (Cleese), because he has got innate breeding.

Cleese: I have got innate breeding, but I have not got any money. So sometimes I look up (bends knees, does so) to him (Barker).

Barker: I still look up to him (Cleese) because although I have money, I am vulgar. But I am not as vulgar as him (Corbett) so I still look down on him (Corbett).

Corbett: I know my place. I look up to them both; but while I am poor, I am honest, industrious and trustworthy. Had I the inclination, I could look down on them. But I don't.

Barker: We all know our place, but what do we get out of it?

Cleese: I get a feeling of superiority over them.

Barker: I get a feeling of inferiority from him, (Cleese), but a feeling of superiority over him (Corbett).

Corbett: I get a pain in the back of my neck.

Potential is a poor performer and gives us a pain in the back of our necks too. It is hard to explain to people, and those with ‘innate breeding’ may indeed go on to ‘have not got any money.’

Since we do want to spot, manage and develop talent and then hopefully keep it, what could we do instead? Clients (in technology, in retail, in public services) are starting to move away from performance and potential to what and how instead.

The what is still performance; well-measured, objective and familiar to all. The how is not potential, it is the practical use of the organisation’s leadership framework, however defined. This grid can have as many boxes as you like, but moves away from potential. Does how Mary gets results burn her teams? While Arthur’s commitment and passion are great, why is what he is delivering 12% less than planned?

These simple what/how questions are, well, simple. And that makes discussion of them with Arthur or Mary easier too, either to focus discussion on improvement in role or, if what and how someone works are both great, to talk through developing further in new, more stretching challenges.

The discussion, either with talent or about it, is easier and simpler. The flow of future talent remains clear based on observed actions and results to frame what the discussion should be about – the future – rather than trying to explain potential as a reliable input measure to someone just labelled a LoPo who is a consistent performer. And, because the discussion is better, managers start to do them more. Without potential, the divider between performance reviews and development discussions comes down which saves time and makes giving feedback and coaching in the moment more natural.

Poor performing potential.

Written by Max Weston
Panthea Leadership


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