It is no secret that highly effective leaders are crucial for long-term success in any industry. Effective leaders build strong teams, inspire others to achieve goals, and engage team members to ensure continuous commitment to the organization and its overall objectives—which is linked to positive business performance.
However, many businesses struggle with their succession management strategy and do not have a pipeline of strong leadership talent. It’s common for people to be promoted based on factors that seem valuable or important at first, such as tenure or current performance, but are all too frequently insufficient indicators of future success. The consequences of having poor leaders can include low productivity, high turnover, low employee morale, and impaired collaboration between employees.
Businesses need a reliable means of identifying high-potential leaders from those who would be less effective. This is where leadership assessment becomes important to ensuring an effective succession management process.
What is a Leadership Assessment?
In the broadest terms, leadership assessment is a process for identifying leaders by evaluating employees to measure their leadership potential. Through these assessments, a business can identify its high-potential employees and develop plans to ensure these people will be ready to fill key roles when they become available.
What Are Common Steps in Leadership Assessment?
Creating an effective leadership assessment is a multi-step process with several moving parts, including:
- Develop Success Profile. What does “good” or “great” look like for a given leadership role in the organization? When developing a success profile, information is gathered from stakeholders and employees to create a comprehensive profile of the skills and behaviors that enable future success for a given role.
- Select Assessment Tools. To achieve a thorough, data-driven assessment of leadership potential, a robust array of assessment tools should be used, including:
- Leadership Questionnaires. These measure key characteristics, preferences, and motivations for leadership candidates. They also capture potential “red flags.”
- Behavioral Interviews. Effective interviews capture what and how people have done things and assess self-awareness.
- 360 Degree Feedback Surveys or Referencing. References are important to assess the perceptions others have of the leader’s strengths and weaknesses.
- Simulations. These assess the leader’s knowledge and behavior and may include role play sessions, group exercises, decision making tools, presentations, and situational judgement tests.
The end result is a data-driven, comprehensive approach to identifying and developing high-potential leaders.
Why Does Leadership Assessment Matter?
A comprehensive leadership assessment is what top-performing businesses use to make sure that they’re putting the right people into the right roles to drive future success.
For example, AmeriGas, America’s largest propane company, began using leadership assessments as part of their succession management process for their Area Director position. Prior to using leadership assessments based on a “profile of success,” the company was having issues reliably finding future leaders to take on the Area Director role, which was causing productivity issues and high turnover for the position.
After implementing a comprehensive leadership assessment process as part of a larger succession management program, AmeriGas was able to turn around the Area Director role. They made what was once a hard-to-fill position into a highly successful role in the company that attracts top talents who are interested in furthering their careers.