The Leadership Assessment Toolkit

key developments in the science behind executive search and leadership consulting

Executive talent decisions are highly sensitive. We’ve all read the articles about the cost of a bad hire: the hiring organization is exposed to recruitment costs and lack of productivity, the executive search firm is exposed to reputational risk, and the candidate has embarked upon a misguided career choice. But executive talent risk expands beyond just hiring decisions – it covers decisions around how you define high potential, how you assess individuals against that definition, and how you manage the development of those selected high potentials.

While the risks are easy to quantify, the value of getting it right is much harder to calculate. However, the science behind assessing and managing executive talent is improving dramatically, therefore derisking the process. Executive search firms have been formally assessing executive candidates for years, but the advances in both the assessment methodology and the ability to interpret this social science of leadership and cultural assessment, has led to clients asking for assessment work to be conducted outside of search work. In many cases executive search firms have hired specialist leadership consultants, or developed their own proprietary methodology, in order to service this client need.

We spoke to a number of AESC members about the different assessment methods that are available, and how they are de-risking the assessment and development of executive talent: 

The Leadership Assessment Toolkit

Big Data and predictive modelling

“Many clients are now talking about Big Data in the HR field. Once you have collected enough performance data through psychometric testing, and benchmarked that against your client’s data on their organization, we can predict performance by looking at people with those same skills and competencies. There are investment banks that can now use their data to anticipate which staff members are going to leave their organization and when they will leave, even though the individual may not have thought about it yet. If we are not careful, this data can be used in a non-ethical or manipulative way. This is one of the trends of the new economy: you will need to clarity in your values about when information can be used during a recruitment process.”

Jean-Marc Louachez, Global Managing Director, Expertise and Knowledge Management, Hay Group

Psychometric testing

“Leadership assessment is an important part of the search process. If we are going to meet the needs of our clients now and in the future, we need to develop assessments that uniquely serve our clients. Often we find that our assessments validate the gut feelings that our clients have, but it adds information for them to be aware of and when they are onboarding successful hires. The executive search business is built on strangers meeting strangers, and we believe this makes the process more sophisticated.”

Richard Metheny, Leadership Solutions Practice Leader, Witt Kieffer

“An important part of what we do is psychometric testing. We measure the traits of candidates who have joined the client organization recently and who have been successful, as well as measuring successful internal executives and find some commonalities between them. We then identify the key areas to focus on when assessing executives during a search. It means that the process is flexible and built around each client’s need.”

Florence Ferraton, Managing Director, Russell Reynolds

“The value of an organization of people is that we are human beings, not robots. We describe people as icebergs – there are personality traits, motives and values that lie beneath what you can originally see about them. Once you have measured for those things, you begin to individualize the data so that we can understand much more about a person’s personality. Once you match that the competencies required for the role, it becomes very scientific and very powerful.”

Jean-Marc Louachez, Global Managing Director, Expertise and Knowledge Management, Hay Group

Cultural assessment

“Candidate identification has become easier over the last 10-15 years, with the rise of LinkedIn and the internet. That creates a need for greater depth and more information about candidates and employees. Once you start to capture that information, you begin to think about how you can measure it against culture. It is important to make a framework that is removed of bias, but that is flexible enough to anticipate global differences and differences from one organization to the next. As a result, executive search is becoming more robust and leadership consulting is more sophisticated. The easier part of search [candidate identification] is easier and the harder part is becoming more strategic.”

Michael J. Anderson, Chief Innovation Officer and Head of Products & Services, Spencer Stuart

“One of the most common pitfalls that we see with organizations undertaking cultural change is that they think they can shape culture through an internal communications plan and performance management plan. The second pitfall is that the CEO says that they recognize that culture is a problem and then they delegate to HR. Culture is shaped and changed by leaders and the shadow that they cast. We learned many years ago that consulting firms don’t change culture, leaders change culture. We work with leaders and their senior leadership teams to train develop them to lead the culture of their organization. The faster the world is changing, the more volatile and uncertain it is. As a result, culture becomes even more important. People now understand that it is a very important lever to pull in order to get the best out of your organization.”

Jim Hart, CEO, Senn Delaney – a Heidrick & Struggles Company

Anthropological and sociological assessments

“When you think about what it takes to be a great leader, it goes beyond psychology. Sociology and anthropology play a larger role when you factor in the impact that leaders have on the people around them and society at large. This is as true internally as it is externally. It is changing the way we develop relationships with existing clients, and how we assess candidates. It has added to the executive search business and our clients now ask for it outside of our search work.”

Jose Ruiz, Chief Executive Officer, Alder Koten

The science behind executive search and leadership consulting is certainly becoming much more rigorous – and ultimately “getting it right” is a case of combining the above services, based on the needs of a specific client. When this information is shared, it can lead to more effective onboarding of new hires, a better understanding of team dynamics, a deeper appreciation of cultural issues, and is also crucial during mergers and acquisitions to manage the combining of two unfamiliar workforces. For executives, they are able to identify areas for improvement and growth, while also having a better understanding of the types of organizations and cultures that they can thrive in. 

For executive search and leadership consulting firms, this data-driven approach creates a consistent framework behind what has historically been left up to face-to-face interviews. But, as Louachez explains, the value isn’t in the data itself, but in interpreting the data in an intelligent manner. This will likely lead to a shift in the skills required to be a successful leadership consultant: they will need to be client-facing and data-savvy in equal parts. With many great consultants already striking this balance, it provides the ability to align a client’s talent strategy with their culture and their operational strategy, to differentiate and elevate the services provided. When combined with the traditional value proposition of executive search, it differentiates executive search and leadership consulting firms as leading high-impact executive talent advisors.

Download Issue Six