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How to identify, assess and develop great leaders
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THE leadership consulting business is booming. Every year, companies spend close to US$2 billion on hiring consulting firms to assess their top talent and to find out what type of leaders they are. But almost none of the existing leadership assessment models suggests specific ways to develop leadership capabilities once the assessment is done, other than giving vague recommendations.
It’s time for companies to rethink the way they identify and develop their best and brightest. Many large companies measure their talent through a process known as leadership competency modeling. This exercise aims to identify the characteristics leaders need to perform well at a company, and how far a firm’s current leaders embody them. It also examines how well a company’s top executives measure up against each other over time.
This has become a big preoccupation for companies because of the perception that good leaders are hard to find. Firms want to know who will have good leadership potential and how to keep them. They also want to figure out how to attract the right type of leaders.
Rather than using the same assessment criteria as their peers, companies generally prefer a customized approach to measuring their leadership talent. Although tailoring leadership assessments to a company’s particular culture can be valuable to focus people’s attention on an organization’s key priorities, there are problems with this approach.
All the effort, money and time put into customizing leadership evaluations make it difficult to benchmark executives against those at other firms. Many large companies think their leadership competence models are unique and therefore need specific leadership assessments. Yet, too much tailoring can prevent firms from truly comparing apples to apples.
Most leadership competence models typically focus on the behaviors of the leader rather than the overall aspects of the leader’s role.
Finally, and perhaps most importantly, almost none of the existing models truly link assessment with leadership development other than giving vague recommendations on what to do.
Leadership assessment is big business, but it is also a distraction from leadership development. These assessments should be good starting points for thinking about future development, not ends in themselves.
Companies should begin assessing their leaders by choosing a general leadership assessment model that allows for broad benchmarking across companies and industries, rather than focusing on company-specific leadership criteria.
Indeed, rather than customizing leadership assessment, companies should customize the development of their leaders.
James Henderson is Professor of Strategic Management at IMD and is teaching on the Advanced Strategic Management program.
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