Untangling the Leadership Knot: What’s Critical in Assessing Executive Performance?

Consider Paul, a newly appointed CEO in the fast-paced tech industry. His selection came after a rigorous selection process that scrutinized his strategic thinking, ability to innovate, and leadership style. However, after a year, it’s clear to everyone that Paul faces challenges in managing relationships with the Board of Directors (BOD) and his C-suite peers. Paul’s first-year accomplishments have been overshadowed by his strained communication and frequent misunderstandings with others. The Board decides to conduct an assessment to understand the root cause of the problem with a view toward getting the most out of their investment in Paul.

It’s important to provide context regarding tenure in the C-Suite and why assessment, followed by development, is increasingly critical. According to the 2023 report by PricewaterhouseCoopers (PwC), the average tenure of CEOs globally has decreased slightly to seven years, reflecting the increasing pressure and challenges of this role. Particularly in the tech industry, the CEO tenure is even shorter, averaging around five years. CFOs, on the other hand, tend to have longer tenures, with an average stay of nine years, according to the same report. The tenure for CHROs, integral to company culture and employee engagement, has seen a significant increase, averaging seven years. CMOs, dealing with ever-changing marketing trends and consumer behavior, typically have the shortest tenure, around four years. In addition, CIOs, navigating society’s rapid technological advancements, have an average tenure of six years. As organizations face ever-changing market dynamics, the role of leaders becomes increasingly critical, as evident in the case of Paul.

I want to note that executive performance assessment benefits the individual and affects the organization’s well-being. As a result, any assessment process should be comprehensive to provide effective feedback and identify areas for development. All of this must be accomplished within the legal and ethical framework.

Judging and Coaching: Thorough Evaluation and Development

Perhaps the essential question in executive assessment is, “Who is fit to lead?”

The response to this question forms the bedrock of any assessment process: the organization’s strategic plan and objectives. Often, those who request assessment are trying to weed out those executives whose leadership style or behavior may be detrimental to organizational health. However, assessment should not be considered in isolation of development.

In executive performance, evaluation and coaching play dynamic yet distinct roles akin to the roles of judges and coaches at the Olympics. Much like the role of Olympic judges, assessment provides a thorough and impartial review of performance based on established criteria. On the other hand, coaching pinpoints areas of strength and identifies areas for improvement. The following five points illustrate the underpinnings of executive assessment.

1. Rationale for Executive Assessment

The impetus behind executive assessments is multifaceted, serving a variety of organizational objectives. Firstly, these evaluations are instrumental for performance improvement. By dissecting an executive’s competencies and offering comprehensive feedback, organizations can encourage their leaders to refine their abilities and address areas of opportunity. Secondly, executive assessments play a pivotal role in succession or replacement planning. Lastly, these assessments are invaluable for talent acquisition. By objectively analyzing skills and abilities, organizations can make informed hiring decisions, ensuring they onboard individuals who align with the company’s strategic vision and possess the requisite leadership competencies.

2. Comprehensive Competency Analysis

A widely adopted approach in executive evaluation involves the use of a competency framework. Competencies are the sum of attitudes, behaviors, and skills. A robust model dissects an executive’s abilities into fundamental elements such as technical expertise, leadership qualities, communication effectiveness, and emotional intelligence. It’s vital for an executive evaluation to integrate diverse appraisal methods, including personal assessments, feedback from bosses and colleagues, as well as quantifiable data. Considering various perspectives delivers a multifaceted view of the executive, which is instrumental in identifying specific areas for growth.

3. Delivering Actionable Feedback

Following an evaluation, providing insightful feedback to the executive is essential. This critique should be beneficial and tailored, emphasizing growth and learning. The feedback must not only underscore the executive’s proficiencies but also identify avenues for improvement, coupled with actionable steps to elevate their performance. Utilizing supportive resources such as coaching and other structured developmental strategies can significantly contribute to consistent advancement in essential executive competencies.

4. Enhancing Organizational Efficacy

Executive evaluations transcend individual analysis; they have profound implications for the organization at large. Such appraisals enable companies to refine their leadership architectures and uncover paths to augment performance in the C-suite. Consequently, this fortifies the efficacy of the leadership framework, propelling the organization toward its strategic goals.

5. Commitment to Ongoing Development

A frequently undervalued element in executive assessment is the necessity for continuous evaluation and adaptation. In my experience, leadership evolution is an enduring journey marked by constant progression and adjustments. Systematic reassessment confirms that development initiatives are maintained and remain impactful. This dynamic strategy permits the early recognition of potential challenges while promoting ongoing development and leadership refinement.

Ethical and Legal Considerations in Executive Assessment

In conducting executive assessments, HR leaders and coaches must consider ethical and legal considerations.

• Fairness and Equal Opportunity: The assessment process should be equitable, offering equal opportunities to all executives and be free of illegal discriminatory practices. Unlawful factors should not influence the evaluation process or its outcomes, and organizations must comply with the applicable laws and regulations.

• Transparency: The process and criteria for assessment should be transparent, with executives fully aware of how they are being evaluated. This aids in maintaining trust and confidence in the assessment process.

• Confidentiality: The results of executive assessments are sensitive and should be handled with utmost confidentiality. Only relevant parties should have access to the results, and the information should not be misused or exploited for other stakeholders’ personal or political agendas.

• Accuracy and Validity: The techniques used for executive assessments should be reliable and valid, accurately reflecting the executive’s capabilities. Misleading or inaccurate results can harm an executive’s career and affect the organization’s overall functioning.

• Consent and Participation: Executives should willingly participate in the assessment process, and their consent should be obtained before initiating the process. Forced participation could lead to complications and damage morale and trust.

By adhering to these ethical and legal considerations, organizations can ensure a fair and effective executive assessment process, promoting a culture of integrity, respect, and continuous improvement. In addition, maintaining ethical principles fosters an environment of trust where executives feel comfortable and motivated to grow and develop their skills. It also exemplifies the organization’s commitment to integrity and fairness, fortifying its reputation among potential candidates and the broader business community.

From Assessment to Development

While assessment provides a critical snapshot of current competencies, strengths, and areas of improvement, it is merely the starting point. Emphasizing development post-assessment is paramount as it facilitates the ongoing enhancement of skills and capabilities unearthed during the assessment. It’s akin to knowing your destination but needing a roadmap. The executive’s development plan acts as this roadmap, outlining actionable steps towards reaching their full potential. Without this emphasis on development, the benefits of the assessment could be left untapped, stunting both the individual’s and the organization’s growth.

Earlier, I introduced the concept of coaches and judges in the Olympic games and emphasized the judge’s role in executive assessment. Now, I turn our attention to the role of coaching and the steps in post-assessment. It’s an interactive process that supports executives in their growth and development. Coaches work alongside executives to strategize and implement plans that address weaknesses and enhance strengths identified during the assessment. In comparison, assessment provides the ‘what’ and ‘where,’ coaching provides the ‘how,’ facilitating sustainable change and performance improvement.

A robust executive assessment process is not an end but a means to a broader outcome – growth and development. It’s a dynamic process that necessitates a balanced approach, combining rigorous evaluation with nurturing coaching. It’s essential to remember that while assessments highlight areas for improvement, the subsequent development process is where the fundamental transformation occurs. Therefore, organizations should emphasize both aspects equally to unlock their leadership potential and drive organizational success.

Conclusion

Executive assessment serves a critical function in an organization’s leadership strategy, offering invaluable insights into its leaders’ competencies, strengths, and areas of improvement. Moreover, such assessments, when conducted following ethical and legal standards, promote a culture of fairness and transparency and foster a conducive environment for learning and development. It is a practice that combines rigorous evaluation with nurturing coaching, ensuring sustainable improvement in individual performance and ultimately contributing to achieving organizational objectives.

However, the transformational power of executive assessments depends mainly on what follows the assessment—focused development. A comprehensive development plan guides executives toward their full potential, addressing the areas highlighted in the evaluation and capitalizing on their strengths. It is a dynamic, ongoing process that ensures continuous growth, strengthening the organization’s leadership capacity and driving its success.

To continue this conversation around executive assessment and development, I encourage you to reflect on the following questions: How does your organization approach executive assessment and development? What ethical and legal considerations are prioritized in your assessment process? Do you believe your current process effectively balances evaluation with coaching? Your thoughts and experiences are valuable in deepening a collective understanding of this crucial aspect of executive development.