The Keys to Effective Leadership and Personality Assessment

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Ryne Sherman
09/15/2020

Hogan leadership

The success or failure of any organization is largely a function of that organization’s leadership. In modern organizations, leaders make critical decisions about how to allocate personnel and resources and the cumulative sum of those decisions is reflected in the organization’s performance.

Among publicly traded companies, the CEO accounts for 17-30% of the variance in firm financial performance. Because leaders play such a critical role in modern organizations, it makes sense to understand something about them. A moment’s reflection makes two things about leaders obvious:

  1. Some people are more likely to become leaders than others
  2. Some leaders are more effective at getting their group to perform at a high level than others. That is, there are individual differences in who becomes a leader and there are individual differences in how leaders lead.

Personality psychology concerns the scientific study of individual differences and is the go-to discipline for understanding these nuances in human behavior. More than 100 years of research in personality have demonstrated that virtually every outcome of consequence in which individuals differ, including leadership, is related to personality. What can personality psychology tell us about leadership? The answer is everything.

Leadership Emergence

In democratic societies almost no one begins their career in a leadership role. Over time though, some people are eventually promoted to leadership positions. Leadership emergence concerns getting oneself promoted into leadership roles.

WEBINAR: How to Conduct a Meaningful Leadership Assessment 

The most comprehensive study on leadership emergence – a meta-analysis combining results from 78 separate studies – shows that people who are emotionally stable, extraverted, curious, bright, and disciplined are more likely to become leaders. Of course, being good at gaining leadership positions does not always translate into leadership effectiveness.

Leadership Effectiveness

Leadership effectiveness concerns building and maintaining a high-performing team. Unfortunately, most of the academic research on leadership has failed to appreciate the critical distinction between emergence and effectiveness. As a result, there are many studies of emergence and far fewer on effectiveness. However, two high-quality studies have identified six broadly generalizable characteristics of highly effective leaders.

The first study asked employees to identify the characteristics of the most effective bosses they ever had. It found that effective leaders:

  1. Had integrity, earning the trust of their subordinates
  2. Made good decisions in a timely fashion
  3. Had competence in the area in which they were making decisions
  4. Presented a vision of how things would look in the future creating team buy-in.

The second study identified 11 companies from the Fortune 1000 that showed sustained financial performance – significantly outpacing the market and their industry – over a 15-year period. The study concluded that, in every case, the performance was driven by a change in leadership (i.e., the CEO) and that these leaders shared two qualities: relentless drive for success and personal humility. In summary, the six most important personality characteristics for leadership effectiveness are integrity, decisiveness, competence, vision, ambition and humility.

Assessing Leadership

The characteristics of leadership emergence and leadership effectiveness can be assessed by scientifically validated personality assessments. The key word here is validated, which means that the assessment provider can show evidence (i.e., scientific research) that the assessment predicts these behaviors.

A well-validated personality assessment has the following characteristics:

  • Multiple scientific studies linking assessment scores measured at one time point to job performance measured at a later time point
  • Multiple scientific studies linking assessment scores to workplace reputation (e.g., using 360 assessments)
  • Independent and external scientific review of the assessment. Many assessment providers say their assessments are valid, but few are willing to show actual proof that their assessments predict leadership performance.

Using Assessments for Leadership Selection

Because leadership plays a critical role in any organization’s success, it is incumbent upon the organization to employ leaders who will be effective. Unfortunately, the base rate of leadership failure is startlingly high.

A recent survey of the UK public indicated that 22% of people hate their boss, 52% of people name their boss as their main source of dissatisfaction, 20% would forgo a pay raise if someone would fire their boss, and an astonishing 12% of respondents admit to having imagined killing their boss.

READ: Building a Foundation of Trust to Effectively Lead 

A similar survey of US adults indicated that 65% of Americans say they would prefer getting rid of their boss to receiving a pay raise. From the preceding it is reasonable to conclude that somewhere between 65-75% of business leaders are incompetent and the source of this incompetence almost uniformly is poor interpersonal skills. Organizations would be well-advised to use personality assessments to evaluate and compare candidates on the critical dimensions of leadership effectiveness (i.e., integrity, decisiveness, competence, vision, ambition, and humility).

A major advantage of personality assessments over more traditional hiring strategies (e.g., resumes, personal recommendation, interviews) is that they are not subject to the traditional biases of hiring. Personality assessments do not know the test-taker’s race, gender, sexual orientation, etc. And, unlike intelligence tests, personality tests do not show group differences in demographic categories (i.e., blacks get the same scores as whites; women get the same scores as men, etc.). Using personality assessment to make leadership personnel decisions increases fairness, diversity and inclusivity.

Using Assessments for Leadership Development

In Lewis Carol’s Alice’s Adventures in Wonderland, Alice encounters the famous Cheshire Cat near a fork in the road. Alice asks the Cat which road she should take, and the Cat asks her where she would like to go. When Alice says that she does not know, the Cat retorts that any road will take her there. The Cat’s logic also applies if we do not know where we are at. That is, it is impossible to know which road to take if we do not know where we currently stand.

In this regard, personality assessments are an essential part of leadership development. Personality assessments that are grounded in reputation provide leaders with strategic self-awareness, or insight into how they are seen by others. This often includes blind spots, or problematic interpersonal tendencies of which the leader was not aware. Once a leader knows how he or she is perceived by others, the leader can create a personal developmental plan to build on their strengths and to improve upon their weaknesses. For leaders looking to improve their personal performance or to advance their careers, being strategically self-aware is a critical first step.

Conclusion

Humans have always lived in groups and every human group has a leadership hierarchy. The history of human groups tells us that the fate of the group is ultimately dependent upon its leadership. Recent advances in personality science have identified the personality characteristics of those individuals who are likely to obtain leadership positions and of those who are likely to lead their groups effectively. Personality assessments provide a data-driven, scientifically valid, and ethically fair way to evaluate leadership potential and to develop future leaders.

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