Performance vs. Potential & The Ferrari Formula One Lesson

Recognising the difference between performance and potential could mean achieving long term success or something less appealing…

But how do we judge that someone is able to develop and help us achieve more? Typically we use performance as the key indicator. We tend to ask: “What has that person achieved?” If they have achieved a lot, we look more favourably on that person as a candidate for progression.

Achievements are the easiest elements to judge. We can see them! In high-pressure, high-stakes cultures it’s common for top-achievers to get recognition and attention. However…what about things we can’t see?

What about those with potential? Players with potential may not necessarily have posted achievements on the board yet. This could be from a lack of opportunity, not being naturally outspoken or just not wanting to step out of line. Perhaps they may not be looking for progression in their careers just yet so might be happy to go-with-the-flow.

Achievements are in the Past…

Achievements are great. But they carry no guarantee that they are going to benefit you moving forward. These are days of rapid change, not only if you are specifically dealing with evolving technologies. Markets, governments, demographics, transportation…these are all changing and past successes can’t be relied on.

Potential is focused on the Future…

A team member’s potential – the possibility that they can help us in the future – is harder to see but can often be a big key to making future gains. The snag is that, unlike achievement, potential can’t be ‘seen’ in the same way. So how can we detect it?

We need to look!

Some players on our team may have good ideas or views on our current direction but – particularly in high-pressure, high-stakes companies – no one has bothered to ask them! They may feel overshadowed by high-achievers and often these players may be tempted to leave if they feel they cannot make a significant contribution…and that might mean your next big idea walking out with them!

Make it a habit of asking all levels of the organisation for their opinion and ideas. Make sure that there’s no judgment and make them feel at ease in sharing their views. This has to be a regular interaction (hence the word ‘habit’ in the earlier sentence). If we create an environment where we can hear from our team members we can tap the potential that often goes unnoticed.

The Ferrari Lesson

If you follow Formula One motor racing – my apologies if you don’t but the lesson is clear – you’ll be aware that Ferrari has been in a bit of disarray over the last few years. The Mercedes team has all but totally dominated the last three seasons and Ferrari haven’t won the driver’s championship since 2007.

Ferrari had a reputation of being a typical high-stakes team with many high-achievers. It was clear that this wasn’t working in an era of totally new engines and design parameters. They were getting beaten often and it did not sit well.

Ferrari’s CEO, Sergio Marchionne is a high profile outspoken character but has revealed himself recently as having a far more subtle approach than many gave him credit for. Last year he took the decision to interview employees at all levels for their ideas on what they saw as good and bad in their departments. He also got rid of ‘a boss’ giving out tasks and ensured there was a key group contributing ideas.

The results this year?…At the time of writing, even though we are only five races into the season, Ferrari have won two with Mercedes picking up the other three. Ferrari are however judged to have the most ‘drivable’ car at this stage and look stronger than they have done over the last ten years!

What does this mean for you?

Achievements are still valuable but we’ve seen that we also need to tap potential to deal with new challenges. Its harder to see which means we must continue to look for it. Potential could be right under our noses and to miss it would be a shame!


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