Leadership Assessment: The Importance of Behaviours
There are many leadership assessment models and tools available, but without the behaviour element, they cannot truly predict performance.
By: Leadership Dynamics team
Identifying future leaders and assessing candidates for leadership roles is more effective when treated as a science.
This might sound counterintuitive; people are inherently emotional and irrational, making them difficult to predict. And so, many senior executives find it more comfortable to rely on their “gut feel” when hiring people. The problem is, we are drawn to those who are like ourselves. We understand their personalities and behaviour, so we expect to be able to work well with them.
But if we only hire people who are similar to us, we will only get similar ways of looking at the world. A lack of cognitive diversity in a leadership team denies the organisation access to alternative perspectives and approaches to problems, and can often lead to groupthink, which has in the past led to business failure.
Fortunately, today we have access to vast amounts of data to build psychometric personality types and behavioural analytics models with which we are able to add a new dimension to the assessment process. In addition to the human side of hiring, we have emotionless and bias-free data that gives us an objective understanding of an individual’s likely future performance.
For companies on a strict schedule for value creation, like those backed by private equity or venture capital, getting the leadership team right is even more pressing as there is little room for error at all stages of the investment journey. If you only have 3 years to double your value, you cannot afford dysfunction at the top; when an unplanned CEO exit delays a PE investment timeline, on average, by 18 months, having the right team in place makes all the difference.
Finding “A-Player” leaders
It’s not enough to find functionally talented individuals. In our experience, a high performing leader needs all of the following to succeed:
Functional competencies: The skills necessary to fulfil a role, both technical and soft.
Domain experience: Market sector area experience, their experience of companies and their market and customer focus.
Situational experience: How that business has created value whether inorganically (e.g. M&A trade exits) or organically: internationalisation, digital transformation, operational effectiveness etc.
High performing behaviours: A behavioural profile that is aligned with both the objectives of the organisation and with the requirements of the role.
Behavioural complementarity: Matching those behaviours across the team, how well each behavioural profile works with another. It achieves what we call ‘cohesion’ and is a high predictor for successful teams.
Going beyond the CV
So how do you go about identifying, assessing and hiring (or promoting) your high-performing leaders? CVs will give you the basic requirements: competencies and past experience. Interviews attempt to dig deeper into the intangible qualities like communication and self-awareness, but both CV and interviews can only see what the candidate is willing to show. This is where the psychometric tests come in. By using data, these tests are objective, removing the subjectivity and bias involved in building personal relationships.
Personality types vs behavioural assessments
Personality traits have been studied for decades in order to build psychometric models of personality types. Many such as the Myers Briggs Type Indicator (MBTI) and the Hogan Personality Inventory (HPI) have been used to select and place people in organisations to great effect. However, there is an aspect to psychometrics that is a better predictor of future performance than personality – behaviours.
While personality types are still very useful – we recommend getting as full a picture of candidates as possible – behaviour is a more tangible and observable aspect of leadership. While personality traits can provide insights into an individual's tendencies and preferences, behaviour provides a more direct measure of how an individual actually behaves in different situations.
Knowing the behaviours of a leader is a far better predictor of success than simply looking at past performance and personality. While personality is static (what a person is like “at rest”), behaviours are dynamic (what a person is likely to do in a situation). I.e. behaviours tell us what a person is likely to do in a given situation, no matter their experience. While personality traits show us "who they are", behaviours tell us "how they act".
Ensuring a high-performing team dynamic
An effective leadership team is diverse, balanced and sustainable. While it’s important to have individuals with high-performing behaviours and the right experience, it means nothing if the team dynamic is dysfunctional. Getting cognitive diversity and behavioural complementarity right will ensure its effectiveness and sustainability.
Diverse thinking styles can have a positive impact on an organisation's performance. For instance, teams that balance analytical thinking with intuitive approaches are better equipped to make informed decisions and solve complex problems. Various perspectives within a team can lead to more thorough discussions, comprehensive evaluations and creative solutions.
However, to achieve these benefits, organisations must first assess their current team composition. They can employ psychometric tests, which measure cognitive abilities, personality traits and other factors relevant to leadership potential. These assessments can reveal the strengths and weaknesses of each individual, providing insight into their preferred thinking styles and areas for development.
While cognitive diversity brings in different viewpoints and ways of working, the team needs to be able to work well together. Someone with low emotional intelligence can clash with someone with high emotional intelligence if their behaviours do not complement one another.
It’s hard to know from a CV and an interview if a team will work well together before they have a chance to meet, but that is exactly what behavioural complementarity tests are made for. If the test works with relevant data – i.e. data that is not simply a sample of the general population, but from the industry or market in which you will be seeking leaders.
Employing people analytics
There are many people analytics tools designed to help businesses with their leadership assessments. Personality tests such as MBTI, the Big Five or HPI have been in use for decades to help all kinds of organisations assess their employees and allocate them to the right departments.
Some others look specifically at behaviours. PACE by Leadership Dynamics is designed to identify future leaders by comparing their behavioural profiles to those of high-performing leaders in their roles, and to assess existing teams against successful private equity exits from the past ten years.
The upgraded PACE version on Leadership Dynamics platform displaying a sample leadership team’s poor behavioural complementarity
Behaviour and personality for successful leadership assessment
There are many tools that can help organisations ensure they have high performing leaders in place and others ready to take the reins in the future. Behavioural analytics is one more weapon in the arsenal, and is best used in conjunction with other forms of leadership assessment. Personality helps us understand what a person is likely to default to. Behaviour helps us understand how they will act in a certain situation.
Both help us understand the intangible qualities of leaders a little better. Due to the objective nature of people analytics, they can help build a picture of individuals or teams that is not coloured by emotion, which is very useful in times of leadership change for example during an acquisition.