The Past Performance Trap: Why It’s a Mile Marker, Not a Signal

You’ve seen the CV. It’s impressive. The numbers, the titles, the track record — all check out. But here’s the question no one’s asking: How much of that will matter in the role you’re hiring today – to lead into the unknown of tomorrow? In a future that won’t look like the past, why is past performance still regarded as a strong predictor of future success? 

Past performance as a predictor of future performance, we might say, is more of a myth than a reliable measure you can count on when choosing your leaders.

Here’s why. When you select a leader with a rearview mirror focus, you limit your perspective of a leader’s future effectiveness and potential, shortchanging both the leader and the organization. A ‘rearview’ of performance can also lead to problems on the road ahead for the leader and for the organization, including important signals of risk, or opportunity that may go unnoticed.

Scrutinizing the Myth

Early in my search career, the mantra, “past performance is a predictor of future performance” rang through the offices of executive search firms and organizations alike. It carried significant weight as a benchmark for assessing the likelihood of a leader’s future performance, and even their "potential."

But lived experience and research tell a different story.

I recall multiple instances of "high performing" executives who were promoted into elevated roles – and yet, their past performance failed to carry them to success in their new situations. In contrast, there were other executives with less stellar past records who thrived when tested in new roles – revealing potential that had previously gone unseen.

These outcomes challenge the myth. Judging an executive’s capabilities primarily through a reflection of past performance is both unreliable and risky.

Context Changes Everything

Past performance can’t be separated from the context in which it occurred. No new role ever replicates the exact conditions of a previous one. Neither past experience nor historical outcomes can offer a mirror image of a present or future situation.

That’s why the past performance myth is inherently flawed in its reasoning. And flawed reasoning leads to flawed outcomes.

This myth creates risk for both the hiring organization and the leader. Wouldn’t relying on past performance as “the” indicator of future performance, also ignore the possibility that an executive may have greater capability than they’ve had the opportunity to demonstrate?

Overlooking potential shortchanges everyone.

The Research Behind the Risk

A Harvard Business Review study found that only 10% of high-performing employees remained high performers the following year, while 20% of low performers improved. These findings clearly show that past performance does not consistently predict future success.

Dr. Robert Hogan and his colleagues at Hogan, a worldwide leader in validated assessments that reliably predict behavior within the context of a certain situation, have long challenged this belief. They argue that past performance provides only a snapshot of behavior under specific conditions. It says little about a leader's ability to adapt, innovate, or succeed in diverse future circumstances. Hogan calls this reliance on the past an "incomplete picture."

And yet, the myth persists.

The Impact of External Factors

Economic, market, and environmental shifts can have a dramatic effect on a leader’s performance. New challenges and disruptions demand different thinking, new behaviors, and a fresh set of capabilities.

VUCA environments (Volatile, Uncertain, Complex, Ambiguous) have become our norm. Jamais Cascio, a futurist and anthropologist, has offered another acronym to reflect our times: BANI (Brittle, Anxious, Nonlinear, Incomprehensible).

These realities make the idea that past performance can reliably predict future performance seem even more out of touch.

Just look to the Great Recession of 2008 or the global pandemic of 2020. These moments forced organizations to shift from value creation to value protection. Playbooks written for one context became irrelevant. Leaders had to reinvent themselves, and many roles were redefined or eliminated. Those who clung to their past performance struggled. Those who proved to have capabilities, never before tested, adapted and thrived.

When economic, market, or societal conditions shift dramatically, leadership effectiveness must shift too. Which brings us to a crucial truth: past performance is always contextual.

Context: The Missing Variable

When the context changes, the limitations of past performance are revealed.

The Sculley Stumble at Apple

In the early 1980s, John Sculley was recruited from PepsiCo to serve as Apple’s CEO. He was a highly successful executive with a marketing track record that helped Pepsi dethrone Coca-Cola in the famous "cola wars." Apple’s board believed that Sculley’s past performance would translate seamlessly into success in the tech world.

But Apple wasn’t Pepsi. What made Sculley successful in a consumer-packaged goods environment didn't align with the fast-evolving, innovation-driven culture of a technology startup. His leadership clashes with Steve Jobs became legendary — and ultimately led to Jobs’ ouster from Apple in 1985. Ironically, it wasn’t until Jobs returned more than a decade later that Apple realized its full potential.

Sculley’s story shows that even a high-performing executive with a brilliant track record may falter if the context changes. Past success doesn’t always equip a leader for the future. In this case, a bet on experience without regard for contextual fit almost derailed Apple’s trajectory.

And Sculley wasn’t the only high-profile example. Marissa Mayer’s story at Yahoo echoes a similar theme.

The Mayer Misstep at Yahoo

When Marissa Mayer, one of Google’s most celebrated executives, stepped into the CEO role at Yahoo in 2012, her impressive track record fueled high hopes for a turnaround. But Yahoo’s challenges required more than product innovation and engineering excellence. The company’s aging culture, strategic drift, and internal fragmentation presented a very different context from Mayer’s past success. Despite bold efforts, including acquisitions and brand revitalization initiatives, Yahoo continued its decline and ultimately sold its core business to Verizon.

Mayer’s story echoes the message that extraordinary past performance in one environment doesn’t signal success in another. Context matters. And leadership effectiveness demands more than a rearview mirror view of experience — it requires a windshield view of potential and fit.

Leadership effectiveness is inseparable from context. When context shifts, past performance loses its relevance, leaving leadership effectiveness hanging in the balance.

As Claudius Hildebrand, Cathy Anterasian, and Jordan Brugg of Spencer Stuart wrote in Predicting CEO Success: When Potential Outperforms Experience, "Directors need to define an explicit scope of priorities for the future CEO, based on desired outcomes and context. Regardless, the defined scope should inform the development of a set of well-defined leadership capabilities and traits that can be measured and assessed."

The Limits of Competency Models

Leadership competency models have become a widely used tool in leadership development and selection. They provide a useful baseline for defining and measuring leadership behaviors. But there are caveats.

As noted by Deloitte Human Capital Consulting, competency models may be useful for performance management, but they often fall short when used to predict leadership potential. Why?

• Competency models ignore situational factors.

• They reflect past behaviors rather than future adaptability.

• They’re complex. Competencies are descriptions of multi-faceted behaviors, skills, and psychological processes, making them difficult to unpack and apply to unfamiliar or shifting conditions.

• And most importantly, they measure what a leader has done, not how they are wired to lead in future contexts.

As Deloitte explains in The DNA of Leadership Potential, "Potential is innate, stable, and reflective of how a person is wired."

The Rearview: It's Seductive and Deceptive

Until now, we’ve looked at the risks of relying on past performance from the perspective of hiring executives. But it’s just as dangerous for leaders themselves.

When a leader enters a new role, it's tempting to lean into what worked in the past. The problem? Defaulting to prior experience can result in decisions misaligned to the current context. What helped them succeed before may now become a liability.

This tendency is reinforced by cognitive biases including:

• Well-Traveled Road Effect: The familiar route is easier and more comfortable, but often blinds leaders to new risks or signals.

• Intuition Bias: As the late Nobel Laureate Daniel Kahneman warned, sometimes what feels like "gut instinct" is just bias dressed up as insight.

• Availability Bias: Leaders often reach for the most accessible or emotionally charged memories to inform decisions, whether or not they apply.

These mental shortcuts cloud judgment. And because they often operate beneath the surface, executives may be unaware of their influence.

Awareness is the first step. Once you see the rearview for what it is, you can begin to shift your focus forward.

A leader’s mental lens matters. It fundamentally affects every measure of performance and potential.

Putting Performance and Potential in Context

My work centers on aligning leaders with roles where they can succeed — based not just on what they’ve done, but on what they’re capable of doing in a new and specific context.

That starts with defining the coordinates of the role: the organizational context, situation, mission, environment, and success metrics.

Without those coordinates, leadership fit is impossible to navigate. It’s unmapped and unpredictable.

The Mission: Destination Potential

Leadership selection for a defined role is a “destination potential mission.” The key question: Is the executive uniquely positioned for optimal performance in this specific context?

Dr. Allan Church, Co-founder and Managing Partner, Maestro Consulting and former SVP of Global Talent Assessment at PepsiCo, differentiates between broad leadership potential and role-specific potential, which he refers to as destination potential. The former is a wide-angle view — useful for long-term development. The latter zooms in on readiness for a particular defined position.

Leadership positioning requires context. It considers experience, past performance mile markers, and all the facets of potential. Positioning is essential to determining an executive’s destination potential.

Why is this important? Well, because you need to know where you are to get to where you want to be. This applies to the hiring executive who’s hiring for a leadership role, and to the executive being considered.

Hiring executives should focus their lens accordingly.

A Convergence of Evidence: Science, Sensing & Signals

Getting destination potential right requires a convergence of relevant signals:

• Science: Validated psychometric assessments, “augmented intelligence” and structured methods.

• Sensing: “Human intelligence” from deep interactions, insights, and situational understanding.

• Signals: Relevant key behaviors, themes, patterns of performance from past roles; reputational insights from referencing and 360 surveys; and data intelligence from a multi-science, multi-trait, and multi-method assessment framework. A convergence of evidence.

This is not about relying on a single source of truth. And it’s not about the sheer volume of data. It’s about the relevance and convergence of the right signals.

The 3P Strategy: Positioning, Potential, and Probability

These three principles guide every destination potential leadership search and selection mission:

1. Is the leader uniquely positioned to succeed in the specific role?

2. Do they have the potential to stretch beyond what they’ve done before?

3. What is the probability for leadership effectiveness within the current context, and for sustained success in achieving evolving strategic priorities down the road?

The answers to these questions are not found in the rearview. They are revealed by a windshield view — one that looks ahead.

Mission Outcome

Leadership isn’t about replicating past success. It’s about navigating forward. That requires clarity about context, humility about what worked before, and sharp discernment about what it will take next.

For hiring executives, identifying destination potential is mission critical. For leaders, understanding their own positioning can reveal the path forward.

Because leadership positioning and potential — not past performance as a predictor — is what propels leadership and organizations into the future.

The past is a mile marker and measure of where you’ve been. It informs you about where you need to go—to get to where you want to be.

Curious how to apply context mapping in your leadership decisions?  

Access your free Context Mapping Intelligence™ Guide.

You might also find value in these resources:

Leadership That Fits: The Strategic Case for Leadership Positioning

What is Leadership Intelligence?

GPS Assessment Intelligence™

Not currently a LeaderEdge Insider?

LTA invites you to join thousands of executives like you who are committed to sharpening their leadership edge.

Subscribe to LeaderEdge here.

And if it’s not for you, you can always back away from the edge by unsubscribing.