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Understanding Performance vs. Potential
June 3, 2012 | Category: Blog, Performance vs. Potential | Last updated on: June 3, 2012
Lessons Learned fromย Major League Baseball
Every June, Major League Baseball drafts (selects) 1500 players from high schools and colleges across the US and Puerto Rico. It is important to understand that this player pool of 1500 is a very select group as it represents an extremely small percentage of the total population of players who play high school and college baseball. It is also important to understand that fewer than 10% of the 1500 will eventually play major league baseball.
What does this mean? Yes, it is nearly impossible to make the major leagues! But it also points to major league baseballโs objective and proven talent โsiftingโ processesย that result in: (1) the initial identification of an elite group of 1500 players who need to be developed and nurtured and (2) the later identification of the absolute most elite and talented players who are deemed โthe best of the bestโ โ major league players. ย Letโs examine the โsiftingโ processes used by major league baseballโsince these processes and tools have relevance for how organizations can more accurately determine and differentiate who their high potentials and successors should beโwho their future major leaguers should truly be.
First, major league scouts and talent evaluators understand the difference between skills, performanceand potential. In fact, they rate players and potential draftees on three scales: (1) present performanceโactual numbers produced (for position playersโbatting average, home runs, errors, etc.); (2) skills (for position playersโrunning, throwing, fielding, hitting, and power); and (3) potentialโsame scale thatโs used in number 2 but they estimate future skill ratings based on how they see a player growing, maturing, etc.
In terms of weightingโactual performance means very littleโin fact, there are many players who produce great numbers in high school and college who are never drafted. Once a player begins their professional career, however, their performance becomes more important especially as they ascend up the ladder of competitionโmoving from the low minor leagues to Triple A baseball which is one step from the major leagues. ย An assessment of a playersโ current skills is slightly more important than actual performance, however, when compared to estimates of potentialโit pales in comparison.
Early estimates of potential are often wrong. There are many 1st round draftees who never make the major leaguesโand conversely there are some late round draftees who were not seen to have great potentialโyet they do make the major leagues. On average, however, there is a high correlation between the round a player is drafted in and their actually making the major leaguesโmeaning that scouts are pretty good at calibrating and re-calibrating potential. How do they do it?
- They understand and differentiate performance, present skills, and potential.
- They have a clear concept of what a major league player looks like—skills required, body type, and mental make-up (the โDNAโ).
- They isolate the micro-skills and โDNAโ that predict success as a major leaguerโthey assess hand-eye coordination, quickness, speed of the ball off the bat, bat speed, mental resilience, etc—the skills and traits that tend to endureโregardless of situation and level of competition.
- They obtain input from other scouts (as in multi-rater) to verify and re-verify their estimates
- They calibrate and re-calibrate by placing potential major leaguers in progressively moreย challenging simulationsโthat reveal โprobabilitiesโ of being successful as a major leaguer. A player who performs well in triple A is more likely to perform well as a major leaguer than someone who performs well in the lower minor leagues.
Whatโs the end result? The 650 players who play major league baseball—with few exceptions—all belong thereโthey are truly the โbest of the bestโ.
This leads me to ask two important questions: (1) Are your current manager and executive teams comprised of true major leaguers? and (2) Who are your future major leaguers? If your organization is representative of the organizations we consult withโyou have a large percentage of major leaguers but you probably also have too many minor leaguers—right? That will need to be dealt with as we all know you cannot compete in the major leagues with minor league players. It is also vital, however, that you begin creating and implementing well validated, compelling and accurate โsifting processesโ. This will ensure your organization accurately identifies, develops and promotes your future major leaguers.
What Does Performance Mean?
Performance is often measured two ways: (1) using a performance appraisal system/review where the incumbent is assessed by their direct manager; and (2) a 360-degree process that lends greater objectivity to the assessment of actual performance because of the multi-rater aspect. The 360 should never take the place of the formal review, however, since raters will be less than honest if they perceive the 360 is to be used for this purpose. It can be a powerful process for teaching objectivity, honestly and dialogue and as such can often lead to more objective performance reviews.
Performance is often evidenced and measured in certain core predictive componentsโcapability (skills and knowledge to executeโthe โcan doโ); commitment (passion, drive, motivation, DNAโthe โwill doโ; and alignment (degree of connectedness to the mission and how well a leader aligns his peopleโthe โmust doโ to execute). These predictive componentsโif presentโprovide the foundation for the achievement of operating success. 360โs are very good at measuring all threeโbut primarily in terms of performance assessment against current job requirements.
Potential
Estimates of potentialโif they are to be accurateโmust start with accurate profiles of success (i.e., you need to know what a major league player looks like). 360 information and performance review information need to be consideredโhowever, much more emphasis needs to be placed on calibrating future estimates of capability, commitment and alignment. Using simulationโmeasures of performance potentialโis a great place to start. Using an assessment center or on-line objective simulation is a great way to assess โcan doโ or performance potential.
You need strong measures of โwill doโ and โmust doโ—DNA measures that reliably measure core values and attributes and potential de-railersโcomponents of the personality that reveal themselves consistently and regardless of roleโare critical to add to the mix. Using objective behavioral interviews where managers are asked to reveal experiences or โhow they would respondโ against the competencies required for success in future positions are also important. Using a measure of critical thinkingโsuch as the Watson Glaserโis also important to add to the mix as we know that critical thinking is an accurate and reliable predictor of executive success.
What can business organizations learn from Major League Baseball as it relates to succession management processes and tools?
- The importance of differentiating performance, skills and potential. Implication: performance reviews and 360-degree assessments should be utilized to calibrate a leaderโs performance and present capability.
- Potential is more elusive. However, you can mitigate risk by calibrating and re-calibrating the more enduring micro-skills, competencies and traits that tend to endure over-time regardless of the situation or challenge. ย Implication: predictive trait assessments that measure a leadersโ enduring values and goals, behavioral tendencies and critical thinkingโare all very important measures that help accurately estimate a leaders potential. What also helps is seeing how they act and respond to the tougher situations and challenges that come with larger roles without actually being placed in the larger role (e.g., simulation assessmentsโassessment centers, on-line leadership simulation assessments, and behavioral interviewing are powerful tests of leadership potentialโespecially when combined with trait and critical thinking assessments.
- Calibrate and re-calibrate performance and potential. The disappointing reality in the corporate world, however, is once an individual is designated โhigh potentialโโinvariably they remain a โhigh potentialโ. In professional baseball, once you are drafted and deemed โhigh potentialโ, you begin an arduous journey in which talent evaluators, scouts and coaches measure and calibrate a players performance, skills and potentialโevery step of the wayโevery day. In fact, โhigh potentialsโ in professional baseball have no guarantee they will remain on the โlistโ. Inevitably, most do get removed as they are replaced every June by the next wave of โhigh potentialsโ. Itโs โput up or shut upโ! Implication: organizations need to become more passionate and diligent about measuring and re-measuring performance and potential and they should use this information to: (1) hold their โhigh potentialsโ more accountable so they strive to become the best they can be and (2) drive better succession and development decisions.