Behavioral Assessments Accelerate Leadership Transformation

What causes leaders to fail? The reasons are seemingly endless: lack of experience, poor communication, a misguided reliance on outdated strategies, and misaligned goals, among many more.

All are valid, to be sure. Here’s another critical and often overlooked reason: They simply don’t fit with the leadership team or the organization as a whole.

Take Nokia. It was once a dominant smartphone maker, but it was unable to compete when the iPhone burst onto the scene. According to a report in Administrative Science Quarterly, the failure stemmed from a culture that did not properly encourage constructive criticism and radical transparency. Managers simply could not engage around the idea that Nokia needed a better operating system to compete with Apple.

In other words, the root causes were issues of corporate culture and norms, communications practices, and individual personalities and motivations that did not align with the needs of the organization.

Looked at another way, “soft skills” can make or break a company. Team dynamics, workstyles, personalities and corporate culture will trump great technology or a dominant market position.

This is one of the chief insights behind the services we deliver to private-equity-backed software companies. We deliver not just highly talented and qualified executives but people who fit with the culture and bring the soft skills needed to achieve the investment thesis.

Watch the webinar with Steve Maxwell of Audax Private Equity to explore these topics further. 

Finding the ‘Right’ Leaders

As soon as a private equity firm has closed on a new portfolio company, the pressure is on to get the right leadership in place to start executing on the value creation plan as quickly as possible.

Most company success can be attributed directly to its leaders and the people they bring in. They need to be engaged, motivated and ready to execute on the growth plans.

But who are the “right” leaders? What do you do when multiple new leaders are needed? How do you assess how one member of the executive team fits with another? How do you prevent a bad hire? And how do you do all that quickly in an extraordinarily tight market for executive talent?

Finding a high-impact executive for one role can be challenging enough, but finding multiple new executives for a company at the same time can be even harder. The answer is to find methods that provide insights into the soft skill and personality dynamics and produce better placement outcomes while significantly shortening search times.

Assessing Personalities in Prospective Leaders

New management science and behavioral analysis techniques are being harnessed to accelerate leadership transformation in portfolio companies.

An example illustrates the techniques.

We worked recently with a disruptive, award-wining software provider that provides a centralized platform that replaces legacy systems for managing business assets.

The company needed eight C-suite and four VP positions filled. Over eight months, we replaced nearly the entire executive team with a mix of proven and ready-to-step-up executives that were cohesive, humble and brought a new dynamism. The result: The team set its five-year strategic plan and is now executing to meet its investors’ investment thesis.

How did we accomplish this major leadership team transformation is such a tight timeframe? There’s a method to our madness.

We call our process Search 2.0 and we describe it as “the science of search.” The centerpiece of Search 2.0 is the FIT Profile. This is a framework that allows us to analyze and understand the company and candidate so we can find and place the best leaders and do so quickly.

It might seem a little counterintuitive that spending time on upfront analysis results in a faster search. But in fact, it most definitely does. The FIT Profile allows us to see what is needed in a new leader, how candidates compare to that target, and how candidates will ultimately mesh with the organization.

This allows us to gain greater insight into a leader’s traits and fit with the leadership team and organization as a whole. That knowledge informs the diligence and evaluation process so key issues can be surfaced quickly and explored during interviews and backchannel referencing. The result is a search and placement process that is both more in-depth and faster than traditional search methods.

The proof of the FIT Profile’s effectiveness is evident in the results. Our searches for senior leaders typically take half the time of the industry average.

The specific part of the FIT Profile that yields insight into team dynamics is called Executive Leadership Team (ELT) Analysis. It yields unprecedented insight into team strengths, a candidate’s potential to complement the other members, and the team’s ability to execute on the growth plan.

The key to the analysis is personality testing and our team uses Hogan Assessments for both individual candidate evaluations as well as full leadership team evaluations. According to Hogan Assessments, the pioneer in this area, one’s personality is that person’s greatest and most unique asset. The Hogan Assessment is unbiased and predicts workplace success really well because personality reflects who we are, how we behave and how we like to act. It also can lay a foundation for team development, helping a team to understand how it can succeed or fail. So, personality assessments help identify people who can do the job, fit into the company culture, and work well with others.

Identifying the Leader Who Fits

Our personality assessments look at a leader’s reputation, or how other people view the leader’s behavior, not just how a leader sees himself/herself/themselves. The assessments look at reputation through three lenses: how others see the leader, what happens when the leader is under stress, and the core values that drive behavior. Together, it predicts what might accelerate or inhibit success.

We augment the output of the Hogan Assessments with our own proprietary analysis based on our decades of experience in private equity leadership advisory and recruiting.

We use that domain expertise to understand the team dynamics and organizational strengths and gaps that will ultimately factor into the team’s ability to execute on growth plans and achieve the investment thesis.

One of the critical learnings from our experience is that there are many leaders who have amazing functional skills, but who cannot work effectively with a particular team or don’t complement the organization’s strengths. The most brilliant leader with an unparalleled skillset will not be successful if they are not a fit with the organization’s culture and team workstyles.

If a company is overlooking personality when acquiring new leaders, it’ll miss people who are the best fit. Instead, it’ll get people who may have the technical skills for the job; as for the rest of the critical factors, you’re flipping a coin.

The FIT Profile not only assesses candidates using personality testing to predict business performance and to identify the most qualified leaders earlier in a search, it also scopes and implements the build-out of an executive team requiring multiple leader changes.

Bespoke has done more than 100 partial to full team builds across its customer base. That’s 40% of the overall customer base served so far. Recent data analysis by Bespoke shows that executives who have been placed with our FIT Profile process are 20% more likely to be in the position for at least two years, a key sign of a successful placement and that the FIT Profile works.
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If you want to know more about our process and how we can be of service to you, join us on July 12 at noon EDT for our webinar, “Hunt Scanlon Media’s How Behavioral Assessments Can Accelerate Leadership Transformation,” in which we’ll present an overview and case studies from our FIT Profile process that demonstrate why 99% of our placements are still on the job 24 months later.

The speakers:

Steven Maxwell, Senior Vice President, Portfolio Human Capital, Audax Private Equity
Eric Walczykowski, President, Bespoke Partners
Megan Hay, Vice President, Leadership Advisory Practice, Bespoke Partners

Contact us today!