Spotting Potential Without the Guesswork: Fairer Ways to Identify Future Leaders

Most organisations agree that identifying future leaders matters. Where things tend to fall apart is the method. New research suggests that the way many businesses spot high-potential talent is far less rigorous than the commitment behind it, and that gap quietly introduces bias into one of the most consequential talent decisions an organisation makes.

This article looks at why that happens, what 'potential' actually means, and how to build a fairer, more defensible process for identifying the people who will lead your organisation next.

The Commitment-Versus-Method Gap

There is a striking mismatch between intention and practice. A recent global study from Talogy, drawing on feedback from more than 1,000 professionals, found that while 70% of organisations use a customised definition of High Potential (HiPo), the methods used often depend on subjective judgment rather than structured assessment.

The reliance on perception runs deep. A recent report by Talogy found that 91% of HR professionals and 88% of leaders depend on performance ratings or manager recommendations to identify high-potential employees, while only 45% of HR and 30% of leaders use psychometric assessments. Despite this, confidence remains high: 79% of HR and 72% of leaders rated their hiring programs as effective.

That confidence may be misplaced. When identification leans on manager nominations and last year's performance ratings, the process feels objective but often is not. As Talogy's Dan Hughes puts it, these methods "can be prone to subjectivity - to identify talent." The result is a paradox: significant investment, sincere intent, and a foundation that does not reliably predict who will succeed in bigger, more complex roles.

How Subjectivity Overlooks Quieter Talent

Subjective methods do not just risk error; they tend to err in patterned ways. When managers handpick candidates, the choice can reflect familiarity rather than capability. Many organisations rely heavily on manager nominations or annual performance reviews to identify HiPo employees. This approach is fraught with bias and inconsistency. For example, a manager may overlook a high-potential employee who is introverted or less visible, or favour those with similar backgrounds.

Culture-fit thinking compounds the problem. Plum's analysis points out that one of the top characteristics organisations selected for in high potentials was how well they fit the organisation's culture. Selecting individuals based on "culture fit" perpetuates a "just like us" mindset and disregards marginalised groups. Our earlier article on bias in hiring explores how this same dynamic plays out at the recruitment stage, and the parallels for internal talent decisions are clear.

Hogan's view is similarly direct. Traditional methods of identification, such as interviews, are often problematic because they are subjective, influenced by corporate politics, and focused on the wrong criteria. This results in high potentials who may seem leaderlike but lack the characteristics essential to successful leadership. The people who look the part are not always the people who can do the job.

Defining 'Potential' Properly

A fairer process starts with a clearer question. Hogan frames the first step as defining potential, prompting organisations to ask, 'High potential for what?' Potential is contextual: an organisation's culture, strategy, and market will also influence its unique definition of potential.

Crucially, potential is not the same as performance. Many organisations fall into the trap of relying on past performance as a measure of future potential. Current and past performance may indicate potential, but the two are not synonymous. In fact, according to a study conducted by Gartner, only one in seven high performers is actually high-potential. SHL's research echoes this: only 15% of high performers also have the attributes needed to be considered high-potential employees.

So what does predict potential? A widely used model breaks it into three elements. We define potential as the "sweet spot" where ability meets aspiration and engagement. Where all these attributes are aligned, individuals have the drive, ambition, aspiration, and ability for future potential. Underpinning all of these is learning agility, described as the speed at which people learn and adapt to change. Self-awareness matters too; assessment tools that build it, as our article on self-awareness for career readiness discusses, help individuals understand where they can stretch.

Building a Fairer Process

The shift from gut feel to rigour does not mean discarding manager insight. It means balancing it.
Use multiple inputs: manager nominations should be balanced with assessment results, as well as interviews or case studies, to gauge leadership qualities. Bias can easily creep in if we rely solely on manager recommendations or tenure; thus, having diverse perspectives in the selection discussion is important.

Three principles make the process fairer and more useful:

1. Use validated assessments. Objective measures help standardise the decision. Hogan notes that using personality data helps limit unconscious bias or discrimination by standardising selection criteria. Done well, objective, data-driven identification processes help uncover diverse talent that might otherwise be overlooked, promoting equity in leadership development.
2. Apply consistent criteria across the organisation. SHL recommends you implement one set of operational definitions for performance, potential, and aspiration to create a common language. Consistency lets you compare fairly across teams, regions and levels rather than rewarding whoever happens to have the most visible manager.
3. Link identification to business outcomes. Tie the criteria to where the organisation is heading, and revisit them as conditions change. As Hogan's Trish Kellett observes, not only the leader may change, but the role and the context may also change. This is also where identification connects to the wider talent system. Strong programs feed directly into succession planning because high-potential data can be reused across leadership solutions to inform targeted development, strengthen succession pipelines, and support internal mobility.

The payoff is more than fairness. Better identification builds engagement too: Talogy found that
over 50% of HiPo employees reporting that being identified has increased their commitment to their employer. When people trust that the process is rigorous and even-handed, the recognition means something.

Spotting potential will never be a purely scientific endeavour. But replacing guesswork with structure, consistent criteria and validated evidence gives organisations a fairer way to see the talent already in front of them, including the quieter people the old methods tended to miss.

Sources & Further Reading

• New findings highlight gaps in how leaders assess high-potential talent
• Hiring Practices Show Gaps in Assessment, Speed: Talogy
• Five Steps to a Better High Potential Program (Hogan Assessments)
• Five Steps to a Better High Potential Program (Summit)
• HIPO | High Potential Identification Insights (SHL)
• The Untapped Value of HiPo Identification (SHL)
• 3 Best Practices for High Potential Identification (SHL)
• Identifying High Potential (Queen's University IRC)
• HiPo Programs: Creating a Data-Driven Approach (Plum)
• HIPO Program Guide for 2025 (Eubrics)
• High-Potential Programs: Train Your Future Executives (TechClass)