Stop Counting HiPos by Square Root.

Start Designing Your Pipeline

Ever heard this rule of thumb? Your number of High Potentials should be roughly the square root of the target employee pool.

So, if you’ve got 25 Sales Leaders, expect about five HiPos. If you’ve got 100, expect 10.

It sounds neat, doesn’t it? Simple, memorable, mathematical. But is it right? And more importantly, is it useful for succession planning? Let’s unpack this.

What’s the appeal of the square root rule?

Square roots show up in real systems where uncertainty grows with size. For example, call centres use a “square-root staffing” rule: if you need 100 agents to handle calls, you add a buffer of about √100 (10) to absorb variability. It works because randomness scales with √N.

So, applying that logic to talent feels clever: bigger pools bring more variability, so maybe the number of HiPos grows slower than the pool size. It also stops us from inflating HiPo lists just because we have a big cohort.

So, what’s wrong with it?

Here’s the problem: talent isn’t a queueing system. The number of HiPos you need depends on business demand and role complexity, not the size of the pool. Using √N creates odd distortions:

• In a pool of 25, you’d label 20% as HiPo. In a pool of 400, only 5%. Why should the percentage shrink just because the pool grew?
• It ignores assessment quality. Decades of research show success rates depend on three things: base rate (how much true potential exists), selection ratio (how choosy you are), and validity (how good your assessment is). A neat formula can’t replace that science.
• It also assumes potential is evenly distributed. It’s not. Performance and potential often follow a power law: a small minority drives outsized impact. That means the right number of HiPos could be lower, or higher, than √N, depending on your context.

What should you do instead?

Here’s a better way to think about it:

So, what should you do instead?
Here’s a better way to think about it:

1. Start with demand, not pool size
   If you need three enterprise-level successors in two years, design for that. Model attrition, readiness, and failure rates. This is reliability engineering, not square roots.

2. Use evidence, not heuristics
   Set HiPo targets by leadership tier and complexity. For example:
   • Enterprise roles: 5–10%
   • Business-unit leads: 10–15%
   • Functional leaders: 15–20%
   These are directional, not rigid. Adjust for strategy and risk.

   Together, these define what you’re solving for — now here’s how to find and grow them:

3. Upgrade your assessment game
   Combine cognitive ability, structured interviews, and behavioural evidence. Validity matters more than pool size. A process with .65 validity beats one with .35 every time.

4. Separate performance from potential
   Your top performer isn’t always your future CEO. Use learning agility and crucible experiences to test for stretch.

5. Keep the square root, just in the right place
   Use it for buffers, not headcounts. If you plan 40 critical development experiences next year, add a buffer of √40 (~6) to absorb derailments and schedule slips. That’s where the mathematics belongs.

Now what?

If you’re still using √N to count HiPos, retire it. Replace it with a governance model:

• Evidence-based designation
• Tier-specific targets
• Regular reviews against readiness and success rates

And if you want a metaphor, keep the square root as a reminder: uncertainty grows with scale, so build buffers into your pipeline.

Bottom line:

Succession planning isn’t about clever formulas. It’s about designing a pipeline that meets your business needs, backed by science, not shortcuts. If you want to stress-test your HiPo strategy, or build one that actually works, let’s talk.

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Justin Miles

Manager Partner, Melbourne at Generator Talent

Justin is the Managing Partner of our Melbourne office, an outcome focused leader with a track record of driving business performance through proven talent and organisation development practices. Justin’s methods and skills have been shaped by working with performance oriented leaders in great companies including PepsiCo, The Campbell Soup Company, Diageo, Rip Curl, Fonterra and Wesfarmers, in Australia, the USA and Latin America.