Predictions 2021: Potential

To boost productivity, organizations will invest in their workforce’s hidden potential  

Between technological innovations and the shift toward virtual and hybrid work, organizations are struggling to evaluate—and increase—productivity. The importance of routines and processes is diminishing, and leaders are left with a new set of questions to evaluate the untapped capabilities of the workforce: What is productivity when exceptions and flows are ascendant and the paths to outcomes are so variable? What data will illuminate the value of current and future contributions from individuals and teams? Our 2020 Global Human Capital Trends study finds forward-looking organizations are better at anticipating disruptions likely to affect their workforces—due to their foresight and creativity, not simply access to technology or data.

In 2021, we predict more organizations will start to ask future-focused questions about workforce potential—expanding their aperture on the familiar leadership development concept. Rather than assessing the few workers with enduring human capabilities[1] ready to fill leadership roles, organizations will sense and nurture the seeds of these capabilities across the entire workforce to realize its full potential value.

Understanding the Value of Potential

The concept of potential implies value not yet realized. Historically, potential has been used to identify future leaders for the purpose of succession management. Many organizations invest only in workers exhibiting certain desired traits—and take the presence of these traits as the sole marker of potential.

The increasingly dynamic nature of work has helped to show that much of what is measured to define potential are, in fact, the capabilities that define us as humans. Capabilities such as emotional intelligence, conceptual thinking, and resilience exist within all workers and serve as amplifiers for the skills used in the ever-changing contexts to complete work.[1] Some workers exhibit certain capabilities more strongly than others, likely because they have had more opportunities to hone and develop them over the course of work and life. 

As the ways we define productivity begin to shift, organizations will reframe the concept of potential—including how they define, evaluate, and invest in the capabilities of their workers. Companies will expand their focus beyond workers with developed capabilities to create possibilities for expanded returns—including contributing to new, innovative, and unforeseen organizational outcomes.

Understanding How to Invest in Potential

Investors buy commodity futures not just for current value but on the expectation that value will increase over time. Similarly, organizations should consider the potential lifetime value of and returns on systematic investments in workers. Leaders are taking interest accordingly: 52 percent of respondents to our 2020 Global Human Capital Trends survey say leader demand for workforce-related information has increased in the last 18 months. Significantly, the highest-priority ask was understanding the readiness of the workforce to meet new challenges.³ But organizations may need to look toward new approaches to recognize and amplify this expanded framing of potential.

Organizations are often practiced at capturing backward-looking process data, but many do not know how to effectively interpret data that might offer future perspectives. They will need to evaluate for both the current presence of an attribute as well as the potential payoff for the attributes that may still be “in the rough.” This will require assessments that mitigate biases inherent in our current ways of recognizing talent, including overvaluing educational credentials, work history, observers’ tendencies to look for homogeneity among job candidates, and other markers of privilege.

Focusing on potential optimizes the full, unrealized value of the workforce—not just in service to organizational goals but also to provide value for workers (e.g., meaning, career, aspirations, compensation). “Human capital” is a common term in our industry for a reason—it’s time to invest in the workforce as a driver of future value.

Looking Ahead

Organizations will need new ways to recognize, evaluate, and unleash potential—beginning with rethinking how workforce contributions are defined and validated as part of the organization’s workforce architecture. Consider a simpler, broad-based approach to skills and human capabilities. Expand workforce-planning efforts from traditional notions of talent supply and demand to making informed talent investments that have the potential to return even greater value over time. Then:

• Align career interests of individuals with high-leverage, potential-realizing opportunities. 
• Design work roles to include capacity for lifelong growth.
• Use talent marketplaces to leverage internal mobility for development.
• Reward realized potential by paying for performance—with additional remuneration for expanded value. 
• Recognize the amplified potential of individuals in teams.  

By focusing on and tapping into human potential, leaders and organizations may be able to unlock motivations, productivity, and value that have previously been unimagined or out of reach. This can change the game for their workforces and redefining the relationship with their talent. 

Authors:

Julie Hiipakka - Vice President, Learning & Leadership Research Leader

Mike Kemp, PhD - Manager, HR Research Leader

David Mallon - Vice President & Chief Analyst

Endnotes

¹ Capabilities and Skills: The New Currency of Talent, Deloitte Consulting LLP / Julie Hiipakka, David Mallon, Denise Moulton, and Kathi Enderes, PhD, 2019.

² Capabilities and Skills: The New Currency of Talent, Deloitte Consulting LLP / Julie Hiipakka, David Mallon, Denise Moulton, and Kathi Enderes, PhD, 2019.

³ “Governing workforce strategies: New questions for better results” from 2020 Deloitte Global Human Capital Trends: The social enterprise at work—Paradox as a path forward, Deloitte Consulting LLP / Erica Volini, Jeff Schwartz, Brad Denny, David Mallon, Yves Van Durme, Maren Hauptmann, Ramona Yan, and Shannon Poynton, 2020.