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Why we need to realise the full potential of our employees

After a period of cutting costs, finally there's talk of an upturn. Although IT budgets are likely to remain flat in 2010, 87 per cent of CIOs are actively preparing for a recovery; looking beyond immediate savings and starting to think about the future. CIO Executive Board, a program of the Corporate Executive Board, research shows that the main attribute impacting an organisation's long term competitive advantage is the development of future leaders and that CIOs cite skills shortage as one of the top three risks that could affect IT's ability to respond to the recovery. Organisations that successfully identify and develop high-potential talent (HIPOs) have financial advantage over their peers; it is HIPOs that drive companies forward as they become leaders in the future.

The challenge

There are two main challenges to realising the full potential of employees. The first challenge is in the IT workforce itself. Our research shows that on average only eight per cent of IT employees are HIPOs (defined as having a 75 per cent or greater chance of being a top performer at the next level) - a proportion that lags behind a number of other corporate functions. The second challenge is in the process. Alarmingly, over 80 per cent of IT executives say that their existing approach to identifying and developing high-potentials is ineffective. So, to reap benefits associated with HIPOs, IT executives need to correctly identify their HIPOs and put in place effective strategies for shaping them into future leaders.

Spotting HIPOs and helping them grow

Spotting HIPOs is not always easy, and the most common approach - equating high performance with high potential - is only effective in a minority of cases. Our research shows that HIPOs have three critical characteristics - Ability, Engagement, and Aspiration:

• Ability: The innate characteristics and learned skills that an employee uses to carry out day-to-day work
• Engagement: The extent to which employees commit to something or someone in the organisation, how hard they work and how long they stay as result of that
• Aspiration: The extent to which an employee values the intangible and tangible benefits of moving up in the organisation

When used as filters to screen employees, these three characteristics can help IT leaders distinguish HIPOs from high performers who are ill-equipped to succeed at the next level.

The next question is how to ensure that HIPOs fully realise their potential. Luckily, the factors that drive employee potential most - factors like developing a culture of openness and recognition, building knowledge-sharing peer networks, or introducing training opportunities for staff - are all under a manager's control. By focusing on these areas, IT executives can build a high performance culture in their organisations.

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