A question from a reader around using the “nine box” (performance and potential matrix) to assess talent:
Emailing with a question I have been asked by my leadership team, that I hope you can help me answer.
We have been using the nine box for several years, and are now getting some push back from senior leadership about the percentage of our teams that are in the upper right corners in our "Hi Po" and "Future Star" boxes.
The team is concerned about not being able to grow these boxes (as some of them believe it's the key to growing their business). The team is also concerned about the reality that while you may be a Hi Po in 2008, you may not be in 2009, and how do we break this news to employees, and from that stems a want to widen the percentages we normally prefer for these boxes.
The team has requested that we research what a "best company" or "best practice" distribution across all the nine box is for a company that has been using the nine box to chart performance vs. potential for several years. Is there any research or information you could lead me to that would help satisfy their concerns? Thanks in advance for any help you can offer!
I’ve been using the performance and potential matrix to assess talent for over ten years, for two different companies and a wide variety of teams. While I’m not sure if this qualifies as “best practice” material, I’ve picked up a few practical do’s and don’ts over the years.
I’ll break your question into two parts: distribution and notification.
1. Distribution
We’re getting some push back from the senior team about the percentage of our teams in the upper right corners (hi-po and future stars).
I usually define that “hi-po” group as the upper right hand quadrants 1A, 1B, and 2A. A good rule of thumb for any population is that about 20% of the team would fall into that category. I’m not sure if the “push back” you’re getting is about too many or not enough. The only kind of push back I’ve ever received, usually from the senior leader of the organization, is that there are too many names in those upper right hand quadrants. It’s the old performance appraisal “everybody’s a star” syndrome. The reality is, they probably aren’t, and even if they were, in an absolute way, there are usually not enough resources and opportunities for high potential development to address that many candidates.
There are a couple ways to address the “too many” issue. First, a good facilitator can encourage a candid dialog to compare employees, calibrate expectations and definitions, and redistribute a few names. Secondly, you could require a forced distribution – no more that 20% are allowed in the top 3 boxes, and 10% must be in the lower left hand box (3C). While that often will get you push back from those having to rate their teams, it forces a more realistic assessment and “spirited” dialog.
If you’re getting push back that there aren’t enough, I suppose that’s a good thing. Either your raters are setting the bar unreasonably high, or you really do have a talent shortage. I find it’s usually the later, and it should be a wake-up call to get moving on development. You’ll need to take a look at those in nearby quadrants and start doing some serious development, and start upgrading your talent though external hiring.
Perhaps the more important question is “what are the future needs of the organization and do we have enough talent in the pipeline to fill those needs?” For example, if an organization is projecting a need for 20 new sales managers per year in order to expand into a new market, then ideally you’d want 2-3 candidates to choose from for each open position. That would mean that in any year, you’re actively developing 40-60 candidates to get them ready for these opportunities.
However, if you have an organization with limited growth, low turnover (maybe even shrinking), with stable performance, then there’s really not much of a need to identify and develop hi-pos for larger roles. A better alternative would be to facilitate movement of those hi-pos to other areas of the company, and focus your development on getting better in current roles.
2. Notification
The team is also concerned about the reality that while you may be a Hi Po in 2008, you may not be in 2009, and how do we break this news to employees, and from that stems a want to widen the percentages we normally prefer for these boxes.
The notification process is always a tricky issue. I published an article, “High Potential Notification Tips”, on that topic a while back that gives some guidelines on notification.
It covers the pros and cons of telling and not telling, and some word tracks to use for these conversations.
I’ve always advocated not telling someone that they are a “1A”, or a “3C”, or even using labels like “hi-po”. I do think it’s important that every employee gets performance feedback and a candid assessment of their potential on an ongoing basis. Every employee deserves development; it’s just that that the development is different depending on where the employee is at the moment.
See “Nine Development Strategies for a Performance and Potential Matrix”, for specific development tips for each box.
I know that many of the readers of Great Leadership have experience using the nine-box, so I’d invite them to please add their thoughts as well.
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