Are You Assessing Executive Capabilities to Close Key Gaps?

Assessing Executive Capabilities: A Comprehensive Guide
We know from our organizational alignment research that executives play and outsized role in driving organizational success. According to McKinsey, areas under CEO’s control account for about 45% of a company’s total performance.  Because of this, properly assessing executive capabilities of the CEO and the entire leadership team is an important, yet underutilized, leverage point to directly improve organizational performance.

Better Assessing Executive Capabilities is Required to Reduce Mistakes
We believe that it is the job of the executive team to create an environment where individuals, teams, and the organization as a whole can perform at its peak.  Creating an aligned and high performance culture that sets the stage for peak performance is about a lot more than just designing a corporate strategy and deploying the resources to deliver on it.

Accurately assessing executive capabilities should alleviate bad executive hiring and promotion decisions.  With barley more than half of new CEOs meeting performance expectations in their first eighteen months and less than 10% of companies exceeding average performance, correctly assessing executive capabilities can, and should, provide a competitive leadership advantage.

3 Dimensions for Understanding the Essence of Executive Capabilities
Executives must set a clear and compelling strategic direction, align the organization’s culture and business practices, and mobilize talent to execute against strategic priorities.  In doing so, they must constantly navigate complexities, inspire teams, and steer stakeholders toward desired outcomes. This requires a diverse array of hard and soft leadership skills, ranging from strategic acumen and decision making prowess to emotional intelligence and stakeholder management.

Combined, these leadership skills collectively define an executive’s capacity to lead effectively – especially when the stakes are high. Assessing executive capabilities necessitates a holistic perspective, considering both tangible skills and intangible qualities that drive teams and organizations forward.

We believe that any framework for assessing executive capabilities should encompass three key dimensions:

• Leadership Competencies
  Identify core leadership competencies essential for executive success for your unique, strategy, culture, and marketplace – for both today and into the future. For example, a leadership competency we measure is the ability to Formulate a Concrete Strategic Vision.  It is defined as being able to “vividly communicate a concrete strategic vision that appeals to followers’ values.”

  Do you have a research-backed, strategically-aligned, and agreed-upon list of core leadership competencies required for your executives to excel?

• Behavioral Traits
  Once you have an agreed upon list of core leadership competencies and definitions, your next step is to define the measurable and specific micro-behaviors for each competency. For example, “Formulating a Concrete Vision” could include the following leadership micro-behaviors:

  — Formulates a concrete vision of the organization’s future state
  — Communicates the vision in a vivid way that gets others excited
  — Creates a vision that appeals to followers’ personal values and needs
  — Sets long-term goals that span 3 to 5 years

  Have you defined the specific micro-behaviors linked to leadership effectiveness at your company?

• Personality Traits, Motivation, Learning Agility, and Potential
  Done right, the proper assessment of leadership competencies and related micro-behaviors tells you about current capabilities. To assess potential, you must use assess specific personality traits, motivation, and learning agility.  By integrating these dimensions, organizations can construct a comprehensive framework that captures an accurate picture executive potential.

  Are you accurately measuring leadership potential?

Employing Executive Assessment Tools and Techniques
Numerous assessment tools and techniques are available to evaluate executive capabilities, each offering unique insights into leadership effectiveness. In addition to standard performance reviews based upon organizational success metrics, some commonly utilized methods include:

1. 360-Degree Executive Feedback
   Soliciting feedback from peers, subordinates, and superiors provides a comprehensive view of an executive’s strengths and areas for development. Typically, reinforced with 1×1 executive coaching, 360-degree feedback can provide powerful insights to executives and create the vulnerability and transparency required for growth.

   Are you effectively using 360-degree feedback to assess and develop leaders?

2. Executive Psychometric Assessments
   Leveraging validated instruments such as personality assessments and emotional intelligence tests offers deeper insights into an executive’s behavioral tendencies and leadership potential. Done right, validated aptitude, personality, and emotional intelligence assessments help to predict future on-the-job performance in ever-expanding roles.

   Do you know how motivated and ready for the challenge your current and future executives are?

3. Simulations and Role-Plays
   Immersive simulations and role-plays simulate real-world leadership scenarios, allowing organizations to evaluate an executive’s decision-making skills and approaches in a controlled environment. Done right, leadership simulation assessments allow you to use validated and AI-backed approaches to objectively select the right leaders, improve leadership succession planning, and develop and engage executives in critical leadership roles.

   Are you using leadership simulation assessments to identify, develop, and promote top leadership talent?

A Note About AI’s Role in Assessing Executives
AI is having an impact on the process of finding and assessing future leaders.  As AI continues to evolve, keep an eye on how assessments using AI affect the fairness, equity, and legality of leadership selection, promotion, succession planning, and development.  We believe that a human-centered approach backed by AI is the best approach for leadership selection and assessment.

The Bottom Line
We know from our organizational culture assessment data that top talent is looking for authentic leaders who can get results with elevated levels of empathy and psychological safety.  In today’s complex business environment, balancing results and relationships is not easy.  Leadership assessments are a powerful way to measure if your executive team is capable of delivering on its future strategy and close key gaps that are in the way.

If you are thinking about assessing executive capabilities, download The Top Skills for High Performing Leaders