CEOWORLD magazine - Latest - CEO Advisory - Managing HiPOs For A Competitive Edge

CEO Advisory

Managing HiPOs For A Competitive Edge

workplace co-workers and employees

“We need to talk.” mentioned Jerry to his boss Linda, on the final day of the budgeting meet for the year. For a moment Linda was not sure where Jerry was coming from, but sensed through his voice that it was something important. Her mind started to ponder. Jerry is a HiPO (Hi-Potential employee) who has been consistent with his performance for the past 3 years. He had been such an integral part of the system, and she was not sure what was in the offing. It almost worried Linda. “Sure, coffee at the restaurant, say 6 pm?” responded Linda. “Perfect”, replied Jerry. By 8 pm, Linda’s apprehension came true; Jerry wanted to move on. Though she gave him a few options and a couple of days to reconsider, it was pretty evident he was not going to stay.

How many of you leaders have gone through such situations? Unfortunately, this sounds too familiar for far too many. Some of us might actually think these things are bound to happen and our strength should not be person dependent but rather system and process dependent. Even so, it is people who complement these systems and process, making them effective; thanks to their ‘unique relationships’ and expertise they have established over time. Not just with fellow employees but also with the assets; the tangible (computers, technology, equipment, etc.) as well as the intangible (knowledge, skills, abilities, etc.). This ‘unique relationship’ is perhaps best explained by a proven theory called The Resource Based View of the Firm (RBVF)1 that champions for a change from an ‘Out-side in’ to an ‘Inside-out’ approach. It states that competitive advantage is met when an organization has resources that are Valuable, Rare, Inimitable and Organized, and which cannot be easily replicated by its competitors.

Therefore, if RBVF evolves over a period of time, the best way to take advantage of it would be to align the Ability, Motivation and Opportunity2 of your existing employees to the mission and vision of the company. Simply put, we should look within the company for these sources of competitive advantage, rather than outside of it. McKinsey surveyed3 4,500 senior managers across 56 US companies and found that the ‘A’ players or HiPO had a clear advantage of producing 40% more average than the others in operational roles and these numbers rose even higher to 49% and 67% for general management and sales roles respectively. Bottom line: Do not lose your HiPO employees!

Which brings us to an important question, “How do we build a strategy and a culture that not only retains people but also ensures a voluntary high engagement and greater productivity?”. The key is in the word ‘Voluntary’. If we have to drive towards it, we should focus on other areas along with our existing traditional approaches. Some of them could be Motivators: All the CHROs will agree, ‘Money does not make people feel unique’. Therefore, your ESOPS, perks and benefits are not going to motivate them to their fullest potential, at least not in the long run. At best, it can complement their immediate interest but definitely cannot drive it. For your employees to attain their peak performance, consider the below two points.

First Factor: Intrinsic motivation and Shared values:

Intrinsic motivation is the spontaneous satisfaction individuals derived from the activity itself. Extrinsic motivation, in contrast, requires tangible or verbal rewards4. Intrinsic motivation can lead to more engaged and committed employees, and the four most critical intrinsic rewards are: a sense of meaning and purpose; a sense of choice; a sense of competence; and a sense of progress5.

Also, Intrinsic motivation goes hand in hand with shared values. Employees tend to establish a connection if they share common values with the organization. It makes them almost inseparable from their work. If you do not wish to lose your HiPOs, then it’s recommended to identify these values first.

In conclusion, the onus is on HR and management to identify these individual motivators and create aligned rewards and recognition.

Second factor: Coaching and mentoring:

Business globalization, the war for talent and the increasing client expectations has made it crucial that we invest in continuous professional development of your HiPOs through coaching and mentoring. It is almost a panacea for all your possible people-related challenges. Coaching techniques like the GROW model (Goal, Reality, Options and Way forward) not only establishes SMART personal and organizational goals but will also help employees to achieve the same to realize their full potential. Studies have shown when organization takes such interest in their personal development, employees become loyal with a sense of belonging to the organization.

At a time when the millennials will become 75% of the global workforce (most report predictions point to 2025 6), not just mentoring, but reverse mentoring also comes in as a great tool for success.

A further statistic to interest business leaders, PWC published that the ROI for the companies that invest in coaching is 7 times more than their initial investment. 7Deloitte reported, ‘Retention is higher by 25% for those employees who are engaged in company sponsored mentoring’.8

Of course, irrespective of all our engagement efforts, across-the-board employee loyalty is not fully possible. And it is also a given that many companies engage in a plethora of retention strategies including risk assessment of positions, compensation strategies etc. especially for a HiPO. But the fact of the matter is, we have just touched the tip of the iceberg. Check out this fact: As per the national employee retention report by work institute9, an estimated $ 600 billion is borne by the employer in employee turnover cost in 2018. Apex global HR bodies like the SHRM peg the cost anywhere between 6 to 9 months’ salary every time we have to replace an employee. This being the case, just imagine the turnover cost for HiPO, and not to mention the potential earnings lost when a top performing employee leaves.

By any standard, it is worth-its-weight in gold to invest in HiPo employees, but the key here would be proactive and consistent engagement, based on motivators and shared vision and values, well complemented by coaching and mentoring. And yes, it has to be a joint effort of HR and Leaders driven by the Executive committee and possibly even the board.

Remember, if finance is the lifeblood of the company, then it is your people – especially HiPO – who are the brains! They will continue to be the future of your company! Therefore, Good development for all and Great development for your HiPO!


  • 1. David Farnham, (2017), The Changing Faces of Employment Relations: Global, comparative and theoretical perspectives, Palgrave, 16-Sep-2017.
  • 2. Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of Management, 17: 99-120.
  • 3. Rob Silzer Ben E. Dowell (2009), Strategy-Driven Talent Management: A Leadership Imperative, John Wiley & Sons. 04-Nov-2009. ISBN: 978-0-7879-8847-0
    4. Raymond French, Gary Rees, Leading, Managing and Developing People, Kogan Page Publishers, 15-Apr-2016
  • 5. Marylène Gagné and Edward L. Deci, Self-Determination Theory and Work Motivation. Journal of Organizational Behavior. Vol. 26, No. 4 (Jun., 2005), pp. 331-362. Published by: Wiley.
  • 6. Jeremy K. Balkin (2017) Millennialization of Everything, CreateSpace Independent Publishing Platform,15-May-2017
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CEOWORLD magazine - Latest - CEO Advisory - Managing HiPOs For A Competitive Edge
Krishnan Bangaruswamy
Krishnan Bangaruswamy is Associate Vice President for Human Resources at Omega Healthcare Management Services Pvt. Ltd. He has spent over 16 years in Human Resources, Organizational Development, and Corporate Communication.

Krishnan Bangaruswamy is an opinion columnist for the CEOWORLD magazine. Connect with him through LinkedIn.