High Potential Employees Development: Spot, Grow, and Keep Them

Someone asks you to name your high-potential employee. You don’t even pause. You name your best performer.

Odds are, that’s the wrong person.

I work with fast-growth companies on developing and keeping their emerging leaders. You’d be surprised how often this mix-up happens.

Performance tells you who is great at today’s job. Potential tells you who can carry a bigger one.

High-potential employee development is the deliberate work of finding that second group and growing them before someone else hires them. Here’s how to do it well, even without an HR team running a formal program.

What Makes Someone a High Potential Employee

A high potential employee has three things: the ability, the commitment, and the appetite to succeed in a bigger, harder role than the one they hold today.

All three. Not two.

That framing comes from Jean Martin and Conrad Schmidt. Their research on keeping top talent ran in Harvard Business Review in 2010. But the finding still surprises founders today: only about 30 percent of the high performers they studied turned out to be true high potentials.

The three attributes they named:

• ●Ability. Natural capability plus learned skill. The raw material for more complex, more senior work.
• ●Engagement. Real commitment to your company. You see it in discretionary effort and in a desire to stay.
• ●Aspiration. A genuine wish for more responsibility, pressure, and tradeoffs included.

The other 70 percent of high performers usually fall short on one of the three.

Some have the drive and the loyalty but lack the capability for the next level (the research put them at about 7 percent of high performers). Others have the capability and the drive but aren’t committed to staying with you, a group the authors put above 30 percent.

The rest, about a third of high performers, have the capability and the commitment. But they just don’t want the bigger role.

I meet these people all the time, and they’re some of the most valuable employees a company has. They just need a different plan.

Here’s how the two groups compare in practice:

Performance is a record of what someone has done. Potential is a bet on what they could do next.

How to Spot High Potential in a Growing Company

Large companies run calibrated talent reviews and nine-box grids. In a 40-person company, you get something quieter: the chance to watch people work up close, in real meetings and real problems, every single day.

That’s your advantage.

Gallup’s research on why great managers are so rare puts the share of people with real talent for managing at roughly one in 10. On many teams, Gallup points out, the person with that talent is likely someone other than the current manager.

So look past titles.

Over a quarter or two, watch for these signals:

• ●They bring people with them. Something breaks. A high performer fixes it. A high potential fixes it and pulls two teammates in so it stays fixed.
• ●Peers come to them first. Notice whose desk, or whose direct messages, people visit before they come to you.
• ●They’re curious about the whole business. Why did that customer leave? How does pricing work? What does a new hire cost? They ask.
• ●Feedback changes their behavior fast. You give a note on Monday. Within a couple of weeks, you see the adjustment.
• ●The people around them get better. Pair them with someone newer, and the work improves.
• ●They say they want more. Aspiration you can actually hear beats ambition you have to guess at.

One caution for every founder who builds this list: check it for people who simply remind you of yourself at 25.

The quiet analyst who rebuilt your reporting without being asked may have more upside than the loudest voice in the Monday meeting.

Want the wider playbook for building leadership skills across your team? Start there. The rest of this guide is about the few people who deserve the most of your attention.

Should You Tell Employees They Are High Potential?

Yes. In most cases, yes.

Founders tend to keep it quiet. They worry about jealousy, about entitlement, about a promise they can’t keep. The instinct makes sense.

But silence has a price. In Gallup’s research on voluntary turnover, 51 percent of people who quit said no leader had discussed their satisfaction or their future with them during their final three months. Fifty-two percent believed their employer could have kept them.

So have the conversation. Structure it like this:

1. 1Name what you’ve seen. Bring two or three specific examples. They need to know the recognition is real.
2. 2Ask what they want. Their answer tells you whether the aspiration is there, or whether you’re projecting your own.
3. 3Describe the path. Lay out the development you’ll invest in over the next 6 to 12 months.
4. 4Promise growth and stop there. No title, no raise, no date you can’t guarantee.
5. 5Agree on the first stretch. Leave the meeting with one concrete assignment and a date to debrief it.
6. 6Say it gets reviewed. You revisit the plan twice a year. For everyone.

Something like this works: “I’ve watched how you handled the client escalation and the onboarding mess. I want to invest in you more deliberately. Before I lay out what that looks like, tell me what you want your next two years to look like.”

Your other employees need growth conversations too. The high potential list decides where extra investment goes.

The list never decides who gets developed at all.

If these talks make you uneasy, the skills behind having tough conversations at work apply here too. Clear, kind, and specific beats vague and careful. Every time.

A High Potential Development Plan in Six Steps

Developing a high potential has one goal: get them ready for a bigger role before you need them in it.

Six steps. In order. One person at a time.

Start with aspiration.

Remember that third of high performers with the ability and the commitment but no wish for a bigger job? You won’t know which group your person belongs to until you ask. So ask where they want to be in two years.

Then find the overlap between their answer and what your company will need. A plan that ignores what the person wants is a plan they’ll eventually leave.

Stretch assignments are where most of the growth happens. Even the word “assignment” undersells them.

Don’t hand your high potential a task. Hand them an outcome to own, along with the authority to get there.

In a growing company, good stretch problems look like:

• ●Fixing the step in onboarding where new customers stall
• ●Piloting a new service line with a small budget and a deadline
• ●Rebuilding the hiring process for their own team
• ●Owning the renewal of an account you can’t afford to lose

Watch how they carry it.

Responsibility means the task was handed to them. Accountability means someone measures whether they hit the target. Ownership means they stay with the outcome when nobody is checking.

That last one is what you’re really testing for.

But here’s where most founders quietly sabotage their own high potentials. You hand over the problem. Then you take back every decision that matters.

Gene has written about the coaching session where, after he finished describing all the fires he’d been putting out, his coach asked him, “Gene, if you solve their problems for them, when do they learn to solve them?”

Every decision you take back is a lesson your high potential doesn’t get.

So agree up front on which calls are theirs. Then let them make a few you would have made differently, and talk through the results afterward.

Want to see where this fits in the longer arc? The stages of developing a leader lay it out.

A coach helps your high potential think. A sponsor opens doors, puts their name forward, and makes sure the right people see their work.

Two different jobs, and your high potential needs both.

Ideally, the coach is someone other than their direct manager, so they can talk through a mistake without worrying about their review.

But the manager still matters. Enormously. By Gallup’s estimate, a manager drives 70 percent or more of the differences in engagement from one team to the next.

So the person your high-potential reports to shapes their experience more than any program you build.

An annual review is far too slow for someone you’re trying to accelerate. Hold a 20-minute debrief every week while the stretch assignment is live.

Keep it to three questions:

• ●What decision did you make this week, and what happened?
• ●Where did you get stuck, and what would you try next time?
• ●What do you need from me, and what should I stay out of?

Short and frequent beats long and rare. The goal: a habit of reflection; they eventually run without you.

High potentials stall when they can only see their own function.

So widen the view. Give them a seat in a leadership meeting, walk them through the profit and loss statement, bring them onto a few customer calls, and let them sit in on a senior hire or a pricing decision.

Nobody can lead what they can’t see. Exposure is what turns a strong specialist into someone who thinks like an owner.

Why High Potential Employees Leave Growing Companies

Your high potentials are exactly the people other companies most want to hire.

In the Martin and Schmidt research, one in four high potentials intended to leave their employer within a year, and one in three admitted they weren’t giving the job their full effort.

One in four.

But the pull is even stronger with younger talent. Gallup’s report on what millennials want from a job found that 87 percent rated growth and development opportunities as important, compared with 69 percent of everyone else.

In my experience, if your emerging leaders can’t see their next step with you, they go and find it somewhere else.

The usual reasons a high potential walks out:

• ●The ceiling is the founder. Every meaningful decision still routes through you. There’s no room left to grow into.
• ●The reward for good work is more work. They get every fire to put out and none of the development. Until they burn out.
• ●Nobody has described the path. They’re left guessing about their future, and a recruiter is happy to answer.
• ●The label went nowhere. They were told they were special. Then nothing changed.
• ●Their manager can’t grow them. A boss who was never developed rarely knows how to develop someone else. That’s why developing your managers into leaders protects your bench.

Losing them is expensive. Gallup’s conservative estimate for replacing one employee runs from half a year’s pay to double it.

But that figure doesn’t even count the future leader you just handed to a competitor.

Mistakes That Waste High Potential Talent

Most high-potential programs fail quietly. Nobody shuts them down. But they stop meaning anything.

Watch for these:

• ●Using the promotion as the development. A title with no preparation sets your best people up to struggle in public.
• ●Treating the label as permanent. People grow. They stall. They change their minds. So review the list twice a year.
• ●Spreading investment evenly. Everyone deserves development. Your high potentials should still get noticeably more of your time.
• ●Running it all through the founder. Once you pass 50 people, a people leader should own the rhythm. Our support for HR and people leaders can help them build it.
• ●Building the program before the person. You don’t need a cohort, a curriculum, or software to start. You need one name. One real problem.

How to Know Your High Potential Development Is Working

You measure this by what changes in the business. Never by how many sessions someone attended.

Start with one question.

If you stepped away for a month, which of your high potentials would the team turn to?

Then check these every quarter:

• ●Decisions stop with them. Fewer of the calls in their area reach your desk.
• ●They develop others. Someone on their team is noticeably stronger than 6 months ago.
• ●Readiness moves. Name the role each high potential is growing toward. Rate them ready now, ready within a year, or ready in two or more.
• ●They’re still here and still engaged. Ask directly, in a stay conversation, whether they see their future with you.

If those four signals are moving, the plan is working.

If they aren’t, don’t question the person first. Revisit the stretch, the decision rights, or the coaching.

Frequently Asked Questions

If you’re a founder thinking about your emerging talent, you’re probably asking at least one of these.

Start With One High Potential This Month

Your best performer may stay your best performer for years. That’s worth protecting.

But your next leader might be someone you haven’t fully noticed yet.

So pick one person. Have the conversation. Hand them a real problem.

Then step back.