Treating your leadership pipeline as a strategic asset: Characteristics of the most effective leadership assessments

Because of the innumerable and extraordinary challenges organizations and leadership teams have faced in the past several years—and will no doubt continue to face in the years to come—leaders have become increasingly uncertain about what skills and capabilities will be required for future success. Given that uncertainty, it’s more important than ever that organizations understand their leaders’ current skills and capabilities. Many are turning more and more to one tool: leadership assessments.

Recent Heidrick & Struggles research found that 75% of executives see assessments as a significant contribution to their understanding of their leadership strengths and weaknesses.¹ And more than two-thirds of HR leaders see assessments as a "standard part of good people leadership.”²

Yet that’s only the beginning. We believe that assessments can be used even more widely, not simply as one-off suggestions but as the foundations of enterprise-wide, strategy-driven approaches to leadership development and retention. For example, other recent Heidrick & Struggles research found that 77% of executives surveyed see assessments as a good way to understand their team dynamics.³ And formal assessments of skills and capabilities can be used to support crucial decisions and processes beyond whom to hire and promote, including how to build high-performing teams and how best to tackle overall leadership development and succession planning.

That being said, our research has also found inconsistent use of assessments and few links between assessments and career decisions. For example, nearly two-thirds of executives outside HR (63%) say assessments do not get appropriate weight in hiring, promotion, and performance decisions, and putting more weight on assessments is their top choice for improving their company’s promotion process.⁴

We have written elsewhere about how leaders can connect assessments to powerful learning programs that can help individuals and strengthen companies’ leadership pipeline. But it's also important to focus on the assessment itself. What makes a truly useful assessment?

Building a truly useful assessment: Five considerations

1. Make assessments comprehensive. A leadership assessment needs to be a holistic appraisal of the key dimensions of a thriving leader: the leader’s past, in terms of their pivotal experiences and expertise (business impact); their present, in terms of leadership skills (leadership capabilities), their agility and future growth potential (leadership potential); their “shadow,” or the impact they have on their organization’s culture (culture impact); and, last but not least, the interaction between their role, work environment, and organization’s characteristics (organizational impact).
2. Ensure the assessment is objective and valid. A leadership assessment must be based on a robust methodology to provide concrete, reliable, evidence-based data that can accurately inform decision-making and target investment. In addition, evaluating pre-defined criteria ensures efforts are focused on those critical aspects of leadership predictive of future performance. Assessment tools and methods must be selected based on their ability to measure these criteria reliably. As an example, for selection assessments, it is recommended to align up front on a success profile for the role to be filled and assess the potential leader against the pre-defined criteria. This alignment is particularly important for selection assessments, for which having a consistent, job-relevant success profile to assess individuals against is essential.
3. Monitor consistency, fairness, and transparency. In order to enable those responsible to make the best decisions, leadership assessments must be based on a well-researched framework that highlights the essential attributes defining effective leaders and best practice methodology and include expertly qualified senior consultants specifically trained in assessments. These qualities ensure that all leaders are evaluated consistently and fairly, which is even more critical when conducting leadership assessments at scale in order to build a robust talent database over time and continue to attract talent to your organization. In addition, part of the success of a leadership assessment can be attributed to structured feedback shared with both the assessed executive and the organization. It is a time to clearly discuss the leader’s strengths and opportunities for development alongside aspirations and help them in their development path.
4. Focus on development. An effective leadership assessment is designed to provide all participants with a positive developmental experience. Leaders should be supported to maximize their strengths and seize the opportunity for development. The benefits of being assessed include heightened self-awareness, clarity about one’s leadership style and performance, and the opportunity to explore development priorities with a leadership expert and build or shape one’s leadership brand.⁵
5. Make results actionable and supportive of decision-making. The assessment must make translating its results into an action plan easy. Of the HR leaders we sampled in 2022, fully half agreed that, were they choosing a new assessment tool today, they would prioritize the ability to translate results into an action plan.⁶

There are many ways to treat your leadership pipeline as a strategic asset to drive business results, leadership development, retention, and succession planning. Assessment is becoming increasingly important, but it must be done thoughtfully to benefit both the organization and the leaders. 

Acknowledgments

Thanks to Heidrick & Struggles’ Andrea Winchester for her contribution to this article.

References

¹  Proprietary Heidrick & Struggles research from a survey of 500 executives not in HR and 250 executives in HR conducted in spring 2023.

²  Proprietary Heidrick & Struggles research from a survey of 500 executives not in HR and 250 executives in HR conducted in spring 2023.

³  Proprietary Heidrick & Struggles research from a survey of 500 executives not in HR and 250 executives in HR conducted in spring 2023.

⁴  “Developing future-ready leaders, how assessments are—and aren't—used,” Heidrick & Struggles.

⁵  Dorothy Badie, Steve Krupp, Amy Miller, Ellen Maag, and Eliyahu Anidjar “Being assessed? Do not panic! A user’s guide to assessment,” LinkedIn, May 8, 2023, linkedin.com.

⁶  “Developing future-ready leaders, how assessments are—and aren't—used,” Heidrick & Struggles.