"undermining the potential" is correct and is used in written English.
You could use it in a sentence like: "The new policies have had the unintended consequence of undermining the potential of our company."
Creating disincentives for taking time out of training risks undermining the potential to create the clinical leaders of tomorrow.
But "voluntary can't mean undermining the potential effectiveness of an auction by giving every broadcaster a new and unprecedented right to keep their exact channel location".
While the lifeblood of these ecosystems is the talent pipeline, there is concern that a skills shortage is holding back growth and undermining the potential of local startups to compete with the darlings of the US.
For every observer who tells you Chinese companies offer greater efficiency and value for money, another will claim they flood developing countries with imported labour, undermining the potential for local procurement, skills transfer and capacity building.
Without the intention of undermining the potential value of fences as conservation tools, our data suggest that fences are only as effective as the management and enforcement efforts that accompany them.
But this new play is more Blake's 7 than Blade Runner with a rather unconvincing array of "futuristic" clothes and clunky gadgets (including a couple of iPads) somewhat undermining the potential menace of the deeper themes.
The conflict continues to undermine the potential of a generation and the future of Syria itself.
Fear of congregating in one place may undermine the potential popularity of such a centre.
"In the long term, that could undermine the potential of grassroots mobilizers to change things.
Have you observed situations where cultural differences have undermined the potential synergies of mergers and acquisitions?
"Take-up on sales today is likely to undermine the potential for purchases later in the Christmas shopping period.
