Agile High Potential Employees (HIPO): The Future or Fashion for Employee Resourcing?
Agile High Potential Employees:
The Future or Fashion for Employee Resourcing? Professor Chris Rowley Complygate April 2021
Managerial ‘fads and fashions’ has always come and gone and continue apace. This includes in the area of employee resourcing. For example, one trendy area for HR practitioners concerns the management of so-called ‘high potential employees’ or ‘HiPo’ or ‘HIPO’. As ever with much of management, this idea is not ‘all brand new and shiny’ as such a malleable lexicon often hides more ‘run of the mill’ topics, in this case employee resourcing.
For HR managers more traditionally employee resourcing nirvana was the ‘4 Rs’ of ‘the Right people with the Right skills in the Right place at the Right time’, a scenario which could be aided by the use of HR information and planning systems. Of course, this scenario implies some sort of business ‘steady state’ or at the very least environmental scanning to see what labour market and employment related impacts might be coming over the horizon. Likewise, not that long ago the idea of ‘talent’ came charging to the fore, with ‘talent management’ all the rage and even a so-called ‘war for talent’ breaking out globally. Yet, depending on your view and definition of ‘talent’, there is a long history of how to manage such ‘talented’ people as the highly skilled, those in high demand but limited labour market supply occupations, such as IT and software programmers or even the old ‘aristocracy of labour’ whose trade union organisation at least partly created and supported such ‘exclusivity’ and conditions.
It is in this context that we should view what some commentators see as ‘modern’ talent management – HIPO - and with the new vogue word of ‘agile’ prefixed and frequently put into the mix of the magic elixir - often argued increasingly needed due to more dynamic and faster moving markets and customers. Indeed, some consultants argue organisations are moving away from other talent investments to fund their HIPO programmes. Some commentators go further and argue that rather creating agile people, organisations should create more agile HIPO strategies which move at the pace of the business to align ability, aspiration and engagement with evolving needs. Finally, some consultants also note that a common mistake is assuming that high performers are also HIPOs and so companies do not need more agile HIPOs, but more agile HIPO processes, which will enable them to better identify, develop and retain the future leaders they need (Martin, 2017).
So, what does ‘agile’ actually mean in the business and management context? Here agility can be seen as related to not only speed per se, but also flexibility. Earlier organisational forms of agility include the famous Japanese ‘Kanban’ system and ‘Just in Time’ and Volvo-type empowered team working, especially in contrast to more rigid Fordist mass production. However, agility is now even more about not only employees but also managers and employee relations. Here agility is more than just speed and flexibility but needs to be seen as more comprehensive, holistic and requiring a set of supportive individual values and principles. This implies several characteristics in both actors in the employment relationship. For instance, there needs to be on the one hand less concern and need for ‘command and control’ management styles and on the other hand greater belief, support and comfortableness with questioning, uncertainty and ambiguity. This is underpinned by the need for all to actually take personal responsibility.
So, are agile HIPO and their management the future for organisations? As ever in business and management, nothing I clear cut. Rather, that there are issues with both advantages and disadvantages. Some of these are the same of much resourcing from internal versus external labour markets. For example, recruiting from internal labour markets can bolster loyalty and corporate culture but at the same time they can be inward looking and replicate what the business already has in terms of skills, views, ways of doing things, etc. Then there is the issue of equity, motivation and moral. Of course, commentators like to focus on the positive impacts on HIPO for both themselves and the organisation. Yet, of course, there may be unintended consequences such as HIPO that may well show and exercise their agility in ways that could be detrimental to the business in terms of the external labour market and leaving!
Also, logically, not all a company’s staff can be HIPO. This is the same logic, reasoning and argument that comes to the fore in employee resourcing and performance management when discussing ‘forced distribution’ systems – the infamous ‘rank and yank’ made notorious by the naïve ‘Neutron’ Jack Welch, former CEO of GEC. Thus, what happens to those employees who are not labelled ‘high potential’? Does that mean that they are ‘low potential employees’ (‘LOPO’) or even ‘no potential employees’ (‘NOPO’)? Is the fall out and of team working and collegiate ethos this will engender, a cost worth paying?
Finally, it is useful to locate the agile HIPO topic within the wider debate about the common organisational and leadership ‘quest for the holy grail’ of lasting superior performance and competitive advantage. It is argued that this is not achieved simply by following the hyperbole of an ‘off the shelf’ blueprint and seemingly reliable menu of a specific formula or set of steps (Rosenzweig, 2007a; 2007b). This is because this is underpinned by the invidious ‘halo effect’ - identified by US psychologist Edward Thorndike in 1920 - the tendency to make specific inferences on the basis of a general impression (ibid.). In the business world this manifests itself as many concepts are ambiguous and difficult to define. So, we often infer perceptions of them from something else, which appears to be more concrete and tangible, such as financial performance (Ibid.). If we then add in the use of questionable data, two delusions appear: absolute performance (yet it is relative to rivals) and lasting success. However, in reality in the business world success is the result of decisions made under conditions - however uncomfortable for management - of uncertainty, which in turn requires critical thinking (Ibid.).
In conclusion, there is undoubtedly popularity in the ideas of HIPO and employee resourcing remains critical to business and hence HR management. However, as with much management rhetoric, we need to remember the realty of both its antecedence and the issues it is trying to be an antidote for.
Martin, J. (2017) ‘How to design a HIPO strategy in an era of constant change’, ATD, 7 June
Rosenzweig, P. (2007a) The Halo Effect: . . . and the Eight Other Business Delusions That Deceive Managers, New York: Free Press, 2007.
Rosenzweig, P. (2007b) ‘The halo effect, and other managerial delusions’, McKinsey Quarterly, 1 February