Episode 32

How to Understand the Complicated Relationship of Performance and Potential | with Joanna Fennell

Not every top performer is ready to lead. Joanna Fennell shares how to distinguish genuine potential from strong execution, and why most companies get this wrong during performance reviews.
 

Episode Key Takeaways

Only about 35% of high performers also demonstrate high potential—a gap rooted in different skill sets entirely. Performance is about delivering results in a current role; potential is about readiness to operate at a higher level of complexity, which requires learning agility, emotional intelligence, and comfort with conflict.
The mistake most organisations make is promoting the strongest individual contributor into management. This conflates execution excellence with leadership capability and ignores the fact that managing people requires a fundamentally different set of skills—managing horizontally, managing up, and driving change rather than maintaining status quo.
Extra-credit assignments and project-based ‘gigs’ expand the pool of identifiable high potentials by giving visibility to capabilities that go unnoticed in day-to-day work. Opening opportunities to the broader team, rather than always tapping the same go-to performers, surfaces hidden potential and tests readiness in low-risk environments.
Four diagnostic questions separate potential from performance: Does this person move the needle or maintain status quo? How do they get results—do they leave damage in their wake? Do they display learning agility and emotional intelligence? Regular, honest conversations throughout the year prevent performance review surprises and build trust.
High potentials are a flight risk if opportunities don’t follow recognition. Managers must act as sponsors, brokering cross-functional assignments and leveraging the broader organisation to create development pathways—it’s not a solo job, and it requires genuine commitment to their growth.

Frequently
Asked
Questions

How do you identify high potential during performance reviews?
Look for people who challenge the status quo and drive change, not just maintain it. Assess how they achieve results—do they build relationships or leave damage? Evaluate learning agility, emotional intelligence, and self-awareness. These four dimensions separate potential from strong performance in a current role.
Approximately 35% of high performers also demonstrate high potential. The gap reflects different skill sets: performance is about execution in a current role, while potential requires learning agility, emotional intelligence, and comfort with conflict—capabilities not always present in top individual contributors.
360s are valuable for fine-tuning and revealing blind spots, but only if respondents are genuinely candid. Select a diverse group—not just supporters—and frame the process as developmental, not corrective. A perfect 360 rating is a red flag; everyone has growth areas.
Create cross-functional development opportunities and act as a sponsor. Broker assignments in other departments, allocate time for stretch projects, and leverage mentors and coaches outside your direct team. High potentials need visible growth paths; without them, they’ll leave.
Observe leadership styles you admire, find mentors and sponsors outside your reporting line, and raise your hand for visible projects. If your manager remains unsupportive, consider moving to a different role or team within the company. A nurturing environment is essential for growth.