Board member can strengthen board effectiveness by employing psychometric assessment.

“How many of you don’t think you are a people person?” Jack Welch once candidly asked the audiences at Stanford Graduate School of Business. One of the most successful business leaders in modern management, Jack Welch is considered as an outstanding people-focus CEO. As a normal human being, none of us will tell ourselves that we are not good at reading people. When it comes to selecting the new Board member, CEO and C-suit executives; it is almost impossible for the ones in charge; Directors of the Board, CEO, HR Head; to admit that they need help since we all believe we are the HR expert.

Employing ‘psychometric assessment’

In this regard, psychometric assessment, which is one of the most critical human capital tools, is usually left out. This management tool can help authority who is not that good in understand others while can further enhance the good one’s capability to the next level.

Psychometric assessment refers to assessment tool based on psychological theory. After Sigmund Floid described relationship of the id, ego and superego early 20th century, numbers of academic research have been conducted. Around early 1990s, the FIVE Factor Model (FFM) or BIG 5, one of the most well accepted and recognized theory emerged in academic circle after numbers of years of academic researches by numbers of academia from various institutions.

Curiosity over reading, and understanding, people, is always at the center of human being’s interest. The main purpose is to predict how a person will behave and, then, they will try to find the way to happily stay together. Think about astrology, handwriting analysis, palm reading, phrenology, to name but a few. Although their readings may be right sometimes but when it comes to select the new Board member, CEO and top executive, it is not advisable to use these traditional readings since the committee may have difficulty when explaining to shareholders.

In this regard, there is a way to define which assessment tool is considered accurate by addressing on ‘reliability’ criteria which can refer as a measure of the consistency of the psychometric assessment to measure the same result on the same person at different times e.g. test/re-test.

If Board members use the psychometric assessment with high degree of reliability, they can ensure their right decision when they have to choose the prospect one. Choosing the wrong candidate will cost hefty financial burden to the firm both tangible and intangible expense not to mention business’ opportunity cost.

The case of high ‘achievement’ CEO

Over the years, I myself have an opportunity to involve in numbers of board & top executive selection and come across people selection both right and not so right decision making. There was a successful CEO of a large organization who has potential to deliver results with any firm he works with. According to a reliable psychometric assessment, his ‘growth potential’ ranks at 80 percentiles which means he has high potential to prosper more than 80% of test taker.

His supportive ‘consultative leadership style’ reflects 70 percentiles of task/results orientation while people orientation stands at 50 percentiles. It is also worth mentioning that his high ‘achievement’ workstyle of 70 percentiles reflects his likelihood of setting stretching goals and working diligently to reach them, continually trying to improve his skills and performance.

To further demonstrate his outstanding workstyles, his ‘innovation’ and ‘analytical thinking’ are both high around 90 percentiles which are considered one of a few at this level.

It is no surprise that he was finally recruited and appointed to be the CEO of this large corporation. Unfortunately, it only lasts a year. Is there anyway Board of Directors can predict what may happen and prevent possible damage? Yes, they can. The Board may not have a crystal ball to see the future but they can guess what the person may decide and behave according to his BIG 5 personality report.

Important of face-to-face interview

In this regard, during face-to-face interview, Board may wish to ask him critical questions such as: How long do you intend to work with us? As an enthusiastic executive, what did you think when there was a limitation to grow, as you wish, in your previous capacity? If you are successful at our firm, what can allow you to think of leaving us? Asking these kinds of behavioral questions will allow interviewer (Board member) to see how he responses through his body language and comprehensive explanation.  For the Directors who are already very good at reading people, using psychometric assessment report with interview session, will provide them with a good opportunity to clearer understand the interviewee within 1-hour time-limited interview.

Due to the fact of his outstanding profile both personality and professional track record, Board should be aware that he can be a corporate head of any firm. His high ‘achievement’ score also provides an indication that he prefers to be at top position of famous and well-known organization. May be with this reason, he later decides to take a different path.

With the right psychometric assessment, Board member can ensure their decision making on CEO and top executive appointment. Enhancing their people reading abilities by employing psychometric assessment, as a supporting tool, can help preventing financial damage; base salary, opportunity cost, etc; to the firm in the long run.

Disclaimer: This article is written for educational purpose only.

Sorayuth Vathanavisuth, Ph.D. a DCP 3 & CDC10 - Graduate Member and former facilitator of DCP’s Strategic HR section. He can be reached at sorayuth@sealeadership.com.