Today we're going to dig into a topic that confuses people at every level of the corporate ladder. You'll hear about it in calibration meetings, in talent reviews, in leadership offsites. Sometimes it's talked about openly; other times it's whispered about like some kind of secret scoring system. I'm talking about performance and potential.

Performance… sure; that part makes sense. What did you deliver; how well did you deliver it; how predictable and reliable is your output; did you solve the problems in front of you; did you create value for your team. But potential; that's the fuzzy part. Potential for what; and how do you influence a rating that sounds like it's based entirely on somebody's personal opinion.

Imagine being evaluated not just on the work you deliver today… but on a future version of you that may or may not exist. Most people in corporate jobs don't even know that their rating has two pieces. They think their "performance rating" is the whole story. But the real decisions about promotions and opportunities are often driven by the other number; the potential number. So the question we're asking today is simple: what is potential really measuring… and do you even want to maximize it?

A common tool used in end of year evaluations is the classic two‑axis grid; one axis for Performance and the other for Potential. It looks simple on paper. People are sorted from low to high on both scales, then placed into a tidy little box that supposedly determines their future. Those who land in the top right quadrant get the opportunities, the visibility, the fast track. Those in the bottom left… well, they often find themselves stalled out, sidelined, or in some cases quietly pushed out. The biggest issue is that these scales are vague and often applied inconsistently across teams. Two leaders can sit in the same talent review and have completely different interpretations of what "high potential" even means.

For some companies, potential means "how likely are they to produce at a high level in the next year." For others, it means "how close are they to their next promotion." Some organizations define potential as "shows leadership skills." Others look for "scalability"; meaning the ability to handle bigger, broader, and more ambiguous challenges. And a few go even further; blending curiosity, change-readiness, resilience under pressure, strong communication, and strategic thinking into one catch-all label. In other words; potential is often a company's way of asking "Do we see you becoming more valuable to us in the future than you are today?"

But because it's forward-looking, your ranking on this scale often comes down to something people don't like to admit… politics. Potential isn't a direct measurement of your abilities or your hard skills; it isn't even a pure reflection of your current performance. It's a perception game; a bet leaders make about how you'll behave in situations you haven't faced yet. It's assumption dressed up as science. But that doesn't mean you're powerless. Once you understand the ingredients that drive potential, you can learn how to shape the perception of your future self—and change the trajectory of your career.

Even though the definition of potential varies from company to company, there are several core elements that show up almost everywhere.

**Adaptability**. In today's fast-paced world, this one shows up near the top of almost every potential rubric. Change is constant… technological change, regulatory change, shifting priorities. I joked with my boss this week that we've moved beyond "dealing with ambiguity"; we're now just "living with ambiguity." High potential employees are the ones who don't freeze when the landscape shifts. They stay steady, recalibrate quickly, and keep moving.

**Leadership**. This doesn't always mean holding a formal title. Often it's about influence. Can you guide others? Do people seek your input? Do you demonstrate sound judgment? Leaders evaluating potential notice when someone consistently steps up, rallies a group, or helps drive decisions forward.

**Strategic awareness**. This shows up differently depending on where you sit. For individual contributors, it means understanding how your work aligns with broader goals… and making day-to-day choices that reflect that understanding. For front-line leaders, it's about setting priorities for your team that advance corporate objectives. And for senior leaders, high potential often translates to shaping those strategic directions in response to a shifting market.

**Communication skills**. People with high potential communicate clearly, succinctly, and in a way that resonates with their audience. They know when to expand and when to get straight to the point. Their communication builds momentum rather than creating confusion.

**Scalability**. This is the quiet filter behind most potential ratings. High potential employees are perceived as capable of taking on "more." More responsibility, more impact, more scope. Whether that looks like larger projects, more visible initiatives, or simply a broader portfolio of work, scalability signals that your capacity can grow with the organization's needs.

Now, ask yourself: do you really want to optimize for this? For some, the honest answer might not be a simple "yes." It could be "maybe," or even "no."

Chasing a high potential rating can change your behavior in ways that clash with your values or long-term goals. Suppose you thrive as an individual contributor; you love deep work, craftsmanship, technical excellence. But the company defines potential as "ability to lead people." Insisting you don't want that path may actually protect your career rather than hurt it. Or perhaps high potential at your company equates to larger projects or higher visibility, but your personal situation—caring for aging parents or young kids—makes that path impractical.

There's also a hidden risk in being labeled "high potential." The bar moves; expectations increase. Suddenly you're being measured against a future version of yourself rather than the present one. If you don't keep up, the fall can be demoralizing. Opting out isn't usually an option, since failing to demonstrate potential often brings negative consequences. The goal isn't to reject the system; the goal is to understand it and use it intentionally. So how do you make the most of a performance vs. potential model?

If you decide that you do want to optimize for potential, remember this: you cannot optimize for a category you haven't clearly defined. It starts with gaining clarity. Depending on your company; potential may be entirely behavioral, entirely political, or somewhere in between. Begin by asking your manager a few grounding questions… though don't be surprised if they struggle to answer. Try questions like: "How does our company define potential?" "What specific behaviors demonstrate high potential here?" "What would you need to see from me to confidently place me in that category?" "What would remove doubt about my readiness for the next level?" If your manager can't answer, it usually means the system is more political than procedural.

Next, observe the people who are consistently identified as high potential. Watch how they behave; how they speak; the kinds of problems they volunteer for; the way they frame decisions. This isn't about imitation… it's about understanding the signals your company rewards. And here's something that surprises a lot of people: you don't need to be the top performer to be labeled high potential. You just need to show that you learn quickly; you handle complexity; and you stay steady when things get messy.

Early in your career, your potential is often judged by how quickly you absorb information. Are you coachable? Do you ask thoughtful questions? Do you seek clarity instead of avoiding uncertainty? The faster you reach the level of understanding required to take on bigger tasks, the higher your potential rating climbs.

As you grow, the criteria start to shift. Depending on your company, this may mean demonstrating strategic thinking, showing calm under pressure, or taking on visible leadership moments. People who navigate complexity without spiraling; who frame problems in broader business terms; who help teams move forward—those individuals tend to rise in the potential rankings.

Later in your career, the measuring stick becomes scale and impact. Can you drive larger projects? Can you deliver outcomes that matter to the enterprise? Can you influence and persuade people who don't report to you? The scope of your contributions starts to matter as much as the quality.

And as a manager, your potential no longer sits entirely on your shoulders. It reflects in your team's performance and reputation. When you're well regarded, your team benefits. When you lose the trust of senior leaders, your team feels the consequences even if they're performing well.

Regardless of where you sit on the career ladder, potential is always about your future… or more accurately, your perceived future. If you want to shape that narrative, you need to make sure the key decision makers see the signals you want them to see—consistently and repeatedly.

At the end of the day, navigating the performance versus potential model isn't about gaming the system. It's about understanding the rules well enough to make intentional choices. Start by asking your manager directly how your company defines potential. Don't guess; get clarity so you know exactly what you're optimizing for. Then, look closely at the people who carry that high potential label. Pay attention to how they communicate; how they approach problems; how they position their decisions. You're not copying them—you're learning the principles your organization rewards.

One of the strongest signals you can send is your willingness to step into ambiguity. When you volunteer for messy, undefined projects, leaders take notice. Pair that with clear and concise communication—especially under pressure—and you'll demonstrate two of the most valued traits in nearly every rating system.

But before you chase the label, ask yourself whether you truly want it. If it aligns with your goals, pursue it with intention. If it doesn't, shape a career path that reflects your definition of success. The real power comes from choosing the future you want rather than inheriting one someone else imagines for you.

If today's episode helped you understand how performance and potential ratings really work… take a minute to leave a rating or a review. It helps others discover Managing A Career and gives social proof that this show is worth listening to. Share the episode with a colleague who's trying to navigate their own growth. And if you want more tools to get promoted faster, check out https://managingacareer.com.