What you need to know about Leadership Assessments
Contents
What should Leadership Assessments measure?
Before test-driving cars, walking through open houses, or touring campuses, most people make a list of criteria to narrow down their options. These lists usually include MUST HAVES, MUST NOT HAVES, and NICE TO HAVES. Similarly, before you decide what type of leadership assessment tools to use, you should have a list of criteria you want to measure. In this section, you’ll learn about the 5 criteria that predict leadership potential and effectiveness.
Pro Tip:
Don’t shop around for
leadership assessments until you know what you need them to measure.
Culture Fit
It happens all the time. A leader is highly successful at a past employer but fails or derails at another. They’re the same person, but the situation is different. There was something about the past organization that helped them succeed that they didn’t have with the new employer. Or the new employer expects something the old one didn’t. That’s why it’s critical to define your culture. These are typically defined in Core Values or Culture Statements.
To be clear – culture fit doesn’t mean everyone is the same. It means there are a few things that everyone needs to embrace to thrive in your organization.
Competecies
Competencies are clusters of behaviors and skills that help a person perform their job successfully. A competency model defines what success looks like in your organization. You should define Core Competencies that apply to all employees and Leadership Competencies.
Pro Tip:
Your leadership assessment tools should measure your competencies because they literally define what successful leaders do in your organization.
Cognitive Abilities
Cognitive ability is a strong predictor of performance in most jobs and the strongest in complex roles. As leaders move up, the problems they need to solve become more varied and complex. So, it’s perfectly legal and appropriate to include cognitive ability tests in your leadership assessments. The tools you use should measure cognitive skills that match the complexity of the role. For instance, your front-line Managers may need general problem-solving skills, Directors may need financial-analysis skills, and executives need critical-thinking skills. Ideally, one Core Competency (e.g. Solves Problems) and one Leadership Competency (e.g. Strategic Thinking) should be related to cognitive skills.
Don’t assume that everyone who’s risen to a leadership role must have strong cognitive abilities. Other reasons include strong interpersonal skills, an inspiring leadership style, or internal supporters. Hiring or promoting leaders beyond their ability to deal with the complexity is a lose-lose situation.
Preferred Leadership Style
Believe it or not, someone’s preferred way of leading people isn’t highly correlated with their personality. Other factors play a role, such as their knowledge of what effective leadership looks like and the styles they’ve observed at work. It’s important to know how a person is inclined to lead because the research is clear. Highly considerate leaders who provide a moderate degree of structure tend to be the most effective. The good news is that this is easy to measure and can be developed.
Pro Tip:
The two broad aspects of leadership – consideration and structure – should be rolled into your competency model (e.g., Empowering People; Driving Results).
Job-related Knowledge
Experience is often used as a primary data point when making talent decisions. This is usually due to the assumption that with experience, comes knowledge. However, this is not equally true for everyone. People who are cognitively capable, open to experience, and intellectually curious are more likely to gain implicit and explicit knowledge than those who are not. You can evaluate knowledge with your leadership assessment tools both directly (e.g., conduct a technical interview) and indirectly (e.g., measure learning ability and learning motivation). Be sure to separate NEED TO KNOW from NICE TO KNOW, so you don’t exclude people unnecessarily.
Don’t assume that experience equals knowledge! Work experience at a different company is a weak predictor of success in a new organization. But relevant knowledge (e.g., industry, technical, functional) is a good predictor, so focus more on this than experience. Hire for Skills vs. Experience
What are the most common Leadership Assessments?
Broadly speaking, the term Assessment is interchangeable with Evaluation Method. There’s many different tests, tools, and assessments that you can use to evaluate leadership potential and effectiveness. In this section, you’ll learn about some of the pros and cons of common approaches to help you decide which assessments to explore in more depth.
Employment Interviews
Employment interviews are cost effective leadership assessment tools that will help you hire better leaders and determine readiness for new leadership roles. But only if the interviews are structured. The questions should be designed to measure Culture Fit, Core Competencies, and Leadership Competencies. And interviewers should be trained on how to use the guides, avoid common biases, and rate responses.
Did you know that structured interviews are twice as predictive as unstructured?
Other People's Perspectives
Other people’s perspectives can add some value. But, people only see a sliver of an individual’s behavior, and their opinions about that behavior are subjective. That’s why this leadership assessment tool should always be supplemented with objective data.
- Performance Evaluations – There are many limitations to using this as a data point for decisions about leadership potential and future placement. One is that research shows that performance evaluations tell you more about the rater than the person rated. Another is that Job Performance is a function of the Person and the Situation. It’s possible that a person can struggle on one team and shine on another.
- Talent Review Process – This type of leadership assessment can combat the limitations of performance evaluations because multiple perspectives are uncovered through rich dialogue. The process is usually conducted annually, and all leaders at specified levels are discussed. This gives everyone equal airtime, which can improve your ability to identify and promote diverse talent. The Talent Strategy Group has some good content to help you do talent reviews the right way.
- 360 Feedback – This is best used for leadership development versus decision making. Off-the-shelf tools are the most economical choice. There are also technology platforms that allow you to create a customized survey that measures your core and leadership competencies. For C-level roles, interview-based 360 is popular. However, this is usually done by an external consultant who needs to analyze and summarize qualitative responses. So, it can be costly.
- Reference Checks – Other people’s opinions are subjective and are based on limited observations of the person. That’s why they’re weak predictors of job performance. Don’t weigh these too heavily and consider not doing them at all.
Work Samples
Work samples can add some value to the leadership assessment process, but they typically on measure a few competencies.
- Case Study, Presentation – Candidates review and analyze a packet of data and information and present their observations and recommendations to the hiring team. Everyone is given the same exercise, allowing for an apples-to-apples comparison of leaders. These should be designed to measure specific competencies, with structured rating guidelines. While these can be developed in-house, they aren’t easy to create and measure only a few competencies well (e.g., Influencing, Communication Skills, Big-Picture Thinking). And it adds at least a few hours to the participant experience. These are usually used for senior-level leadership assessments.
- Writing Sample or Portfolio – Most often used with professional and mid-management roles, these are good measures of written communication skills and creativity.
- Resume Review – These are usually used as a checklist to decide if a person has the basic qualifications, such as education, years of experience, and technical skills. However, there’s a lot more you can learn about a person from their resume. Resumes are Work Samples. If something looks off, it’s usually meaningful. For example, misspellings and other errors may signal low cognitive ability or low conscientiousness.
Third-party Leadership Tools, Tests, and Assessments
There are many companies that offer a wide range of products and services to help you hire and develop leaders. This makes selecting a partner difficult. In this section, you’ll learn about the most common types to help you narrow down your options.
- Type Indicators. Surveys like MBTI, DISC, Real Colors, or Enneagram are widely popular because they are inexpensive, simple to understand, and make people feel good. Every “style” is portrayed as having positive attributes, and it simplifies personality into “codes” (i.e., letter combinations, colors, etc.). These tests are often used for team exercises and leadership development, but there are many reasons NOT to use them. The biggest one is they do NOT reliably or accurately measure personality.
Pro Tip:
Type Indicators are NOT reliable or valid assessments. Save your money and don’t use them to assess leaders (or anyone). Learn more
- Psychometric Tests. There are many tools published by test publishers like Hogan, SHL, and Talogy, to name a few. Some have better psychometric properties than others, making them better predictors of leadership potential and effectiveness. At PCI, we don’t develop tests, so we can objectively review all the tools on the market and recommend the ones that best meet each client’s needs. You can also do your own homework. Ask the test publisher to send you the technical manual and research briefs so you can review reliability statistics, validity evidence, and norm-group composition. The Society for Industrial Organization Psychology has more detailed guidelines.
Off-the-shelf leadership assessment tests are a relatively inexpensive option. But, they have limitations. They can’t measure your competencies, consider context, or integrate data points. So, you won’t know how combinations of abilities, traits, and preferences are likely to play out on the job or in your culture.
- Assessment Centers. Traditionally, these are conducted in-person and used for leadership development. However, they can be delivered virtually, and some companies use them for hiring. Groups of leaders participate in individual activities (e.g., in-basket, role plays, presentations) and group exercises (e.g., a problem-solving or discussion exercise). Trained assessors (often, entry-level consultants) observe the interactions and assign ratings on competencies that each exercise was designed to measure.
Pros of Assessment Centers
- They have high face validity (i.e., they appear job-relevant).
- They can uncover leadership gaps that need to be addressed. But only when participants are given feedback on their performance during a debrief.
- When multiple exercises are delivered by trained, experienced assessors, they can be valid predictors of leadership effectiveness.
Assessment Center Drawbacks
- They require expertise to develop and administer, which is costly.
- They add a lot of time to the process, especially when delivered in person.
- Some excel because they have great impression- management skills, but they may not act this way in real life. You see how the leader acts in a highly controlled situation. When situations are controlled, people feel compelled to act in acceptable ways. So, what you see may not be what you get once hired or promoted.
- In-depth, Psychological Interviews. Some executive assessment firms conduct 4- to 5-hour interviews. The psychologist (some of whom are licensed to provide psychological services to people with clinical disorders) then writes a report, describing the person and what they believe they will act like as a leader. Often, the interview covers childhood experiences, which can be invasive and lack job relevance, leaving leaders with an unfavorable impression. Typically, the assessment is based solely on one psychologist’s interpretation, making it subjective. If you’re considering one of these firms, ask to see research briefs that show the assessment is a valid predictor of performance.
In-depth psychological interviews can cost tens of thousands of dollars! Beware of these leadership assessments, as you probably are not getting what you’re paying for. At the very least, ask for evidence of the predictive validity.
- Psychologist-led Psychometric Assessments. This approach combines a battery of psychometric tests and an interview with a business psychologist, giving you objective data interpreted by an expert. When done well, these assessments measure the Five-Factor Model of Personality (which can be used to evaluate many competencies), Preferred Leadership Style, and Cognitive Abilities. The experience and expertise of the assessors also matter, as they should be trusted advisors to hiring managers and C-suite executives. This is the type of executive assessment we use at PCI because it is the most objective, scientific approach.
Pro Tip:
Many consulting firms offer this type of leadership assessment. However, they are not all the same. Learn more about the questions to ask when vetting potential partners.
Which Leadership Assessments should I use?
It depends. What problem(s) are you trying to solve?
1. Avoid hiring mistakes. You’ll want to consider several factors, including:
- The participant experience. The biggest factors affecting candidate reactions are (1) how much time it takes them, (2) if they receive feedback on it, and (3) where the assessment falls in the overall hiring process and if that process was clear from the outset.
- Costs. Lower-cost tools should be implemented early in the hiring process. Higher-cost leadership assessments should be administered to the final 2 to 3 candidates. Structured interviews usually take place in the middle, as there is an indirect cost of the hiring team’s time.
- Utility. Consider (1) how the leadership assessment results will be used, along with other data points, to inform the hiring decision, and (2) how the results can also be used to help with onboarding and developing new hires.
2. Identify successors for key roles.
Typically, leadership assessments for succession planning include a 360 feedback tool, an objective assessment (e.g., psychologist-led psychometric assessments), and performance data.
3. Identify & Develop Leaders.
Many organizations use different developmental assessments for different leadership levels. Assessments should be integrated into your emerging leaders and high-potential programs, giving leaders different experiences and insights as they grow with your organization. For instance, you may invest in a customized 360-feedback assessment for your executives, a psychologist-led psychometric assessment for your high-potential cohorts, and a psychometric test for your first-time managers.
Next Steps
- Share what you’ve learned with your colleagues.
- Discuss and prioritize the leadership problems you need to solve.
- Shortlist your leadership assessment options.
- Contact consulting firms to see how their expertise could help you solve your leadership problems.