Developing High-Potential Talent: 7 Challenges in Identifying Emerging Leaders

Summary

Developing high-potential talent starts with identifying leadership potential early, distinguishing it from current performance or readiness, and giving emerging leaders targeted opportunities to grow. Overcoming common challenges requires objective assessments, clear criteria, coaching, and growth experiences to build a stronger leadership pipeline while keeping top talent engaged and growing.

Organizations are struggling to build the leadership pipelines they need. DDI’s Global Leadership Forecast found that only 20% of organizations have a strong leadership bench, leaving 80% without confidence in their pipeline. One reason is that organizations aren’t identifying and accelerating high-potential talent early enough.

Developing high-potential talent early is critical to closing that gap. Organizations need to identify people with the potential to lead, beginning with emerging leaders, and intentionally prepare them for future roles. But several common challenges can make it

What Is High-Potential Talent?

High-potential (HiPo) talent refers to people who have the capacity and motivation to accelerate their growth toward future leadership roles. The term can apply to people at any level, from individual contributors to high-level executives. What’s important is that these are the people an organization identifies for differentiated investment and development to strengthen its leadership pipeline.

Identify Emerging Leaders: Performance vs. Potential vs. Readiness

One key challenge is creating organization-wide alignment around the difference between performance, potential, and readiness. Performance measures how someone is doing in their current role. Often, however, managers confuse performance and potential. They assume that a high performer automatically has growth potential and will excel in a future leadership role.

Readiness is more straightforward because it reflects how well someone fits a specific role or job type right now. That said, many organizations and their leaders struggle to determine when someone is “ready.” A better question is whether the individual is “ready enough with support” to stretch into the next assignment. 

Watch the video to learn how assessment helps you see beyond current performance to identify and develop leaders ready to take the next step.

Additionally, organizations need to consider how far into the future they are evaluating talent. Some organizations confuse readiness—the likelihood of performing well at the next level—with potential. Unfortunately, that can concentrate investment on people who are “ready enough” while overlooking emerging talent with the capacity to grow significantly over time.

Understanding these definitions and adopting a common language is one of the most critical steps in developing high-potential talent. A clear, consistent approach helps organizations invest in the right people now while building the leadership capacity they will need in the future.

Diversity in Your High-Potential Pool

Before we dive into the challenges of identifying and developing emerging leaders, it’s important to consider the role of diversity in developing high-potential talent.

One reason companies struggle to build diverse leadership teams is that their high-potential talent pools often lack a broad mix of perspectives. To ensure that the C-suite reflects varied ways of thinking and problem-solving, companies must start by developing diverse talent at lower levels. When high potentials gain the right opportunities early on, they bring a wider range of experiences, fresh approaches, and sharper insights to senior roles over time.

But what is diversity exactly? Diversity encompasses the different identities, backgrounds, experiences, and perspectives that shape how people think, collaborate, and lead. A broader high-potential pool can challenge assumptions, bring different perspectives to decisions, and help organizations avoid repeatedly selecting future leaders who look or think like those already in leadership.

The bottom line? Building a well-rounded leadership pipeline starts early. Investing in high-potential talent through growth experiences, mentoring, and career opportunities ensures your future leaders bring the diverse perspectives needed for long-term success.

Overcoming Barriers to Developing High-Potential Talent

Here are seven challenges that can make identifying and developing emerging leadership potential difficult and how you can avoid them:

1. There’s a huge volume of people.

It can be overwhelming to look at the entire population of individual contributors to spot leadership potential. That’s why so many companies rely on managers to identify high-potential leaders (see next point). But manager input doesn’t have to stand alone. Targeted, scalable assessments can supplement manager ratings and help talent professionals look broadly across the organization to identify strengths, gaps, and hidden potential more objectively.

2. Only managers can evaluate potential.

As mentioned above, many companies rely on managers to identify leadership potential. After all, managers see these employees in action. But most managers haven’t been trained to look for potential, avoid biases, and distinguish it from performance and readiness. Without the right training and accountability, managers may fall back on what they know best: using current performance to determine growth potential. 

A more consistent process combines informed manager observations with clearly defined criteria and objective data, reducing the likelihood that high-potential identification depends on one person’s judgment.

3. No clear definition of leadership potential.

Managers rarely have a clear, agreed-upon definition of leadership potential. Without one, each manager may apply different criteria, creating inconsistency across the organization. This also makes your identification process ripe for bias, as managers may be more likely to pick team members who remind them of themselves or of other current leaders. 

Organizations can reduce that risk by establishing a shared definition of potential and clear criteria for evaluating it across roles, teams, and talent populations.

4. Training isn’t focused on leadership.

Training and development for individual contributors often focuses on helping them improve in their current role. For example, they might attend conferences in their field or earn additional certifications. While this isn’t necessarily a bad thing, it often comes at the expense of developing the leadership skills high potentials need to succeed in a future leadership position. We must democratize leadership development, and starting with high potentials is the next step. 

High-potential development should prepare people not only to perform today, but to take on the fundamentally different challenges of leading tomorrow. That means giving emerging leaders opportunities to build leadership skills before promotion.

5. Difficulty providing leadership exposure.

Identifying potential is only the beginning. High potentials also need opportunities to experience what leadership actually requires before stepping into the role.

While development through coursework provides valuable foundational knowledge, high potentials also benefit from direct leadership exposure. On-the-job training and opportunities to “try on” leadership through role simulations offer hands-on experiences that prepare high potentials for the challenges they may face in their next career step. 

Leadership exposure can be especially difficult to create for individual contributors, which makes deliberate planning even more important. Stretch assignments, project leadership, mentoring, coaching, and other targeted experiences can give emerging high potentials opportunities to test and strengthen their capabilities before the next role becomes urgent. 

6. Managers aren’t trained to accelerate high potentials.

When organizations identify high-potential leaders, they typically rely on managers to play a central role in accelerating their development.

But without clear guidance and support, the quality of that development can vary widely across the organization. The consequences can extend beyond development itself to retention. DDI research shows high-potential talent is 3.7X more likely to leave within the next year when their manager doesn’t regularly provide opportunities for growth and development. They are also 2.7X more likely to leave when their manager is not an effective coach.

Managers need to know what their high potentials are working toward, where they need to grow, and how to create meaningful opportunities to practice new skills. Their role isn’t to drive development alone. Instead, managers should reinforce and support development through coaching, feedback, and opportunities to take on new challenges.

7. Leadership assessments are rarely used.

Given the high volume of people and informal approach, many companies don’t use assessments for leadership potential. But assessments are an important source of objective insight. They can reveal potential in talented people who might otherwise be overlooked and provide a clearer view of each person’s leadership strengths and development gaps, and those insights can then guide more targeted development decisions.

DDI’s research reinforces the value of this approach. Organizations that use assessments to inform leadership selection are 1.6X more likely to successfully promote internal candidates, and assessments can help organizations identify potential early, before a critical role needs to be filled.

Watch for Burnout of High-Potential Employees

A word of warning: Once you’ve identified and started to develop your high-potential employees, beware of causing burnout. Because they tend to be high achievers and hard workers, it’s easy to ask them to take on more. And most likely, they’ll say yes.

We surveyed more than 1,000 high-potential employees, and 81% reported feeling used up at the end of their workday, much higher rates than any other population. And women, in particular, are also burning out at alarmingly higher rates.

But high potentials may also be more likely to struggle in silence. Afraid of losing out on an opportunity, they may say nothing about their challenges. Instead, they may conclude that another job is the only way out. Organizations may not recognize the problem until that person is already considering leaving. This highlights the need for a psychologically safe work environment where people feel empowered to speak up and share their challenges openly. 

Invest in High Potentials Early

A strong leadership pipeline doesn’t begin with a vacancy. It begins with identifying leadership potential early and giving emerging talent time to grow. To get there, organizations need a clear, consistent way to recognize potential and address the barriers that can keep talented people from getting the development they need.

Developing high-potential talent can’t be an afterthought, and it can’t be left to chance. But with a clear strategy and tools, organizations can identify leadership potential more consistently, accelerate readiness, and build a stronger bench. That way, your emerging leaders will have everything they need to succeed today—and tomorrow.