Potential Analysis
Every assessment center is also an analysis of potential, because the aim of every assessment is to evaluate two different aspects of (potential) employees: their current skills and abilities and their potential for future challenges.
The focus here is on the special features of the second aspect, i.e. the assessment of employees’ potential for future challenges – although these challenges are often not even known at the time of the potential analysis.
Definition: What is a potential analysis?
Potential analyses are also referred to as “strengths and weaknesses analyses”. The distinction between assessment centers, management assessments, development assessments and management audits is not always clear in practice.
However, the core of a potential analysis is the diagnostic view into the future, the assessment of how a person will be able to perform:
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expand their already recognizable competencies,
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adapt to future new challenges that are still unknown today and thus
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to acquire completely new skills and abilities.
| Competence vs. potential | |
|---|---|
|
Competence Measurable performance, regarding to todays defined requirements |
Potential Assessment of future competences regarding to partly still unknown, future requirements |
References from over 35 years of experience
Management Diagnostik
Our consultancy focuses exclusively on management diagnostics and can draw on benchmark data from over 30,000 executive assessments.
Making the right management staffing decisions. Recognize competencies and potentials of managers. Avoid bad investments due to miscasting.
Potential analysis in the company
Generally speaking, potential analyses are not limited to managers; it can make sense to create a potential profile and an analysis of the dormant potential in the company for every employee in the company. It is not without good reason that companies describe their staff as their most important resource – but HR departments and managers are often unaware of the hidden potential of their employees:
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What skills do employees have that the company is not yet aware of?
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Do employees have interests in certain tasks and activities that can be promoted by the employer?
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Are there perhaps even skills among employees that neither the company nor the employee is aware of?
Potential analysis for managers
The potential analysis of managers involves analyzing the skills and characteristics that will be relevant in the future – whether because technologies, the market and products are changing or because managers are taking on new tasks and roles and the demands on managers are therefore constantly changing.
More about our potential analyses
What is potential?
There are two different ways of looking at the topic of “potential”. The first is the question of whether an employee has the potential to take on a specific new task.
An example: a successful regional sales manager should undergo a potential analysis to determine his or her potential for the role of sales manager.
The future role is known, as are the requirements for the position. Many of the competencies shown in the past (sales strength, leadership and motivation) have already been uncovered – some of the new ones in the future position (strategic thinking, presentation to the board) have not yet been.
The aim of the potential analysis is to use diagnostic procedures to assess whether the candidate will be able to meet these new requirements. On the one hand, this is about selection for a specific position and, on the other, about development opportunities (what kind of support the applicant needs to grow into the new role).
The second aspect under which a company conducts a potential analysis is a rather open question, e.g. “Does a currently successful employee have the potential to take on a general management position in the future?”. It is not known which specific position this could be, nor what the future challenges will be.
Diagnostically, not only competencies are assessed in a potential analysis, but above all so-called “potential indicators” of the candidates; below we explain what these are.
When are potential analyses used?
Potential analyses are carried out by companies at many levels, although not always under this name. When selecting trainees or apprentices to join the company, we look for applicants who have the potential to develop skills that they have not yet been able to demonstrate. We know that performance at school and university is not a good predictor of later professional performance, so we need to look at young people’s potential rather than past performance.
Potential analyses are particularly important for managers. The conclusion is often drawn linearly from past performance and success to future performance. When switching to new tasks, different skills are often required than those that have led to success in the past. These new success factors need to be identified according to the principle “what brought you here, won’t bring you any further”.
Potential analysis - methods and common procedures
Similar procedures are used to identify employee potential as in any other management assessment: tests, questionnaires, behavioral observations, biographical and competency-based interviews.
As in every assessment, the aim is to evaluate the strengths and weaknesses of the candidates. However, the potential indicators listed below are of particular importance in the context of an analysis of potential.
Competencies recorded - potential indicators
- General intelligence is the best indicator for mastering any form of professional task. Intelligence is the basis for mastering new situations intellectually. Cognitive performance tests of various types (as a test or as a complex case study) are used as an instrument for measuring intelligence.
- Motivation is particularly important in an analysis of potential, because motivation determines how well people actually use their potential to achieve their goals.
- The personal competence to reflect critically on oneself is another important skill. Recognizing your own strengths and weaknesses, making targeted use of the former and working on deficits is a basic prerequisite for developing your own skills.
- Emotional intelligence is particularly important in interpersonal relationships: understanding your own feelings and those of others and using them constructively is an important skill, especially for managers.
- Last but not least, “learning agility” is an important indicator of potential. This includes the ability to learn new things and acquire new knowledge and new behaviors (ability to learn) as well as the willingness and curiosity to do so (willingness to learn).
Success factors of the potential analysis
In an analysis of potential, it is important not to draw linear conclusions about future performance based on currently recognizable skills. There is no such thing as “potential” per se, only “potential for…”. The basis of a potential analysis is to identify the personality traits that are necessary for the future accomplishment of tasks.