Potential is a good thing because it means a person has the capacity to develop new skills and grow in their career. However, it doesn’t reflect what a person is currently able to do.
Confusing potential with current performance is a common pitfall many fall into. For example, organizations often choose ambitious individuals for leadership roles, regardless of their effectiveness as leaders. A Stanford University study confirms this point, showing that executives score themselves high in ambition but are rated by others as being no more effective leaders than less-ambitious peers.
Mistaking potential for performance can have disastrous effects, causing many leaders to underlead employees who may need more direction or support to perform a task. Leaders must take a closer look at an employee’s actual ability and willingness to determine their true readiness for a task, so they can lead them appropriately.
Leaders can mistake potential for performance for any number of reasons, including:
In a workplace context, the “halo effect” is when a leader assumes an employee has positive characteristics based on a good impression or one exceptional trait rather than evidence. Or, they may perceive an employee having abilities that they never demonstrated based on exceptional performance in one task.
In general, the halo effect is a common cognitive bias that many of us experience when forming judgments about another person. Intentionally leaning into objective evidence of performance or abilities, rather than gut feelings, is one way to avoid cognitive biases like the halo effect.
Not considering an individual employee’s Performance Readiness®, or their current ability and willingness to perform a task, can lead to mistaking potential for performance. While it’s true that every employee has potential to grow, not every person is equally ready to perform the same task.
Performance Readiness® is dynamic, changing with each and every task. While an employee may have excelled at a task in the past and shows potential for a similar one, it does not necessarily mean that they are currently performing at a sustained and acceptable level, meaning they may lack the ability to perform that task now.
In general, people have an innate desire to reward natural talent over proven effort. While natural talent can certainly come in handy while working on a task, it is not a guarantee that a person will perform a task well. It’s important for leaders to recognize that employees who display natural talent will likely still need a certain degree of direction and support to deliver great results.
When a leader faces pressure to fill a role quickly, they might assign tasks to an employee who shows potential but has not yet demonstrated ability, simply because they’re available. However, without assessing the person’s Performance Readiness®, they put the quality of the work at risk and may even cause the employee unnecessary stress.
Here’s what can happen organization-wide when leaders confuse what an employee could do with what they’re able to do right now:
Leaders may delegate tasks to individuals who show potential but lack the necessary skills or motivation to perform the task well. Assuming a person can “figure it out on their own” without assessing their Performance Readiness® first can be a sign of underleading, which can cause the employee to feel frustrated or abandoned. Underleading can also contribute to poor performance and unfavorable outcomes. Leaders may have to increase their workloads to resolve the issues caused by poorly delegated tasks, which is a heavy burden for those already spread too thin.
When employees are given tasks they’re not currently ready for, it can increase their stress levels and lead to burnout. For example, a high-performing employee placed in a leadership role without adequate training or an assessment of their current ability and willingness can quickly become overwhelmed, overstressed and tempted to quit. Previous studies have shown that work-related stress negatively impacts employee well-being, productivity, burnout levels and turnover intention.
Placing responsibilities on individuals with potential but not ability can weaken the leadership pipeline. When an organization’s leaders are ineffective, engagement and productivity can decrease, resulting in missed deadlines and unachieved goals. Employees can also lose trust in the organization’s leadership, resulting in disengagement.
According to a 2023 Gallup report, only 21% of U.S. employees say they strongly trust their organization’s leadership, which coincides with a historic decline in employee engagement.
Fortunately, leaders can follow a simple process to accurately differentiate between potential and performance. This process involves evaluating each employee’s Performance Readiness® for every task when assigning it.
At The Center for Leadership Studies (CLS), we’ve established four levels of Performance Readiness®, ranging from low readiness to high readiness, which leaders use to gauge whether an employee can tackle a certain task well.
Assessing Performance Readiness® when assigning a task helps leaders avoid underleading employees and giving them responsibilities they aren’t quite ready for. A Performance Readiness® assessment also reduces the chance of micromanaging high-performing employees capable of working autonomously.
Your organization’s leaders can learn how to accurately evaluate Performance Readiness® through our Situational Leadership® Essentials course. This course teaches participants the foundation of the Situational Leadership® Model, of which Performance Readiness® is an essential component. Through this course, leaders will know how to determine the right amount of direction and support to provide their team members for each task, setting them up more effectively for success.
Every employee has the potential to perform, but it should not be the basis for determining whether or not an employee can perform a task now. Not every employee currently has the skills or motivation to perform a specific task in the present, even if they’re performing well in other areas. Evaluating Performance Readiness® is the key to accurately predicting whether an employee will perform a task satisfactorily.
Ready to prepare your leaders to evaluate Performance Readiness® so they can drive real performance in their teams? Enroll leaders in our Situational Leadership® Essentials course and give them the tools to turn employees’ potential into sustainable high-performance.
