Evalex Business Simulation

What predicts leadership potential best and how do we assess this?

Some of the most crucial decisions to made in the talent management space are as follows:

  • Recruitment: Which candidate from a shortlist should we appoint?
  • Promotion: Is a manager ready for promotion? Should we promote from within rather than appoint from outside?
  • Development and succession planning: What development would a manager need to move to the next level?

Knowing how a candidate will perform based on interviews, CVs and reference checks is often a shot in the dark. Research has shown that these indirect techniques have a very low predictive validity. Imagine if you could immerse your candidate in the role on a trial basis before making any hiring or promotion decisions. Obviously this is not a practical solution. The next best thing, however, is to create a simulated environment for your candidate to operate in.

To resolve this issue, we first need to ask two crucial questions. Firstly, what is a true indication of leadership success? The second question flows from the first: Which assessment technique predicts potential and talent the best? Cognitive tests, personality inventories or management simulations?

This statement perfectly sums up the true indication of leadership success:

“When wrestling on a daily basis with competitor, market, client and staff challenges, it is natural to assume that, on balance, those who survive these skirmishes best will naturally escalate to more senior positions.”

The career track record of an individual, the progression from one level of work to the next level of complexity, combined with the staying power at that next level, only to be promoted to deal with an even higher level of complexity, may well be the ultimate measure of leadership success.

Leadership is about how effectively we deal with and manage key events. Situations we are presented with on a daily basis, and the accumulation of the incremental additional efficiency that great leaders add to every event, culminate in visibly distinguished high-performance organisation.

The solution

If true success is achieved by dealing efficiently with the situations and challenges in our environment, why rely on cognitive and personality tests alone (both of which simply indicate a propensity to behave in a certain way) when we can submit the candidate to a real-life simulation of the job s/he will have to perform? The solution is the Evalex Business Simulation (EBS). By immersing the candidate in a simulated management environment we measure actual competencies when it come to dealing with the typical issues s/he will face once appointed or promoted. We measure real behaviour, not hypothetical behaviour.

What does the research say?

In our insights section you will find research publications providing a detailed research results, but let us just consider the highlights of that research here.

Our own research indicated that leadership competencies assessed through EBS had the highest predictive validity, followed by cognitive, then personality and level of work tests. By predictive validity we mean the ability to accurately predict future performance from the performance in the assessments.

These findings correspond to two other major research studies, namely Sackett, Shewach and Keiser (University of Minnesota, 2015) and Woehr, Matthew and Fleisher (University of Tennessee, 2008).

From the analysis it would seem that leadership competence simulations identify the majority of variances in job level, no matter how you model them. Conversely, in only conducting cognitive and personality test, less than half the story of an individual’s potential is explained.

The graphic below explains the extent to which different assessment methodologies predict potential and performance.

four-assessment-constructs

The research provides sound evidence and justification why the Evalex35 Leadership Assessment solution consists of management simulation, cognitive and personality tests – the results of which lead to a balanced statement about an individual’s potential.

Clearly in assembling a management or leadership assessment battery, the foundational instrument, the starting point, should be assessment centre simulations, augmented by cognitive or levels of work assessments, and personality tests. Unfortunately, most companies mainly use the cognitive-personality combination.

Latest research findings put forward a strong case for assessment centres as more powerful predictors than cognitive and personality tests. This is leading to a shift in our understanding of what drives executive success.

paradigm-shift

EBS in action

Leadership must be one of the most critical challenges in any organisations and In developing business leadership, it is crucial to use the correct assessment approaches to identify talent in order to reap the best return on subsequent development efforts. Using a less than optimal solution in assessing candidates for managerial and leadership roles can waste valuable time and resources.

EBS is an online, cloud-based assessment centre that puts candidates through their paces in six management simulations to assess management competence, emotional maturity and thought leadership.

The EBS solution synthesises leadership competence, thought leadership, personality and styles (optional with Evalex Psychometrics), experience and performance into a talent classification and leader utilisation strategy. It is a powerful product that allows you to gather comprehensive talent intelligence on each leader in your company. This data is run through our advanced talent management software to provide a rich tapestry of information at both individual and corporate level.

At an individual level, EBS produces:

  • A talent strategy for each leader
  • Development plans for each leader
  • Talent fit to current role
  • Talent fit to future roles
  • A development plan to move from current to future role

At a corporate level, EBS provides:

  • Information on the quality and depth of talent at each level of management
  • Identification of which levels of management are either at risk or conversely well stocked with talent
  • Your company’s talent pipeline, benchmarked against other organisations locally and globally
  • Leadership development priorities for incorporation into your corporate leadership development strategy

During the four-hour Evalex Business Simulation, the candidate is required to respond to around 30 typical organisational and business issues. The way s/he deals with these issues projects his/her competencies, thought leadership, emotional maturity, management style, business knowledge and experience.

Responses are analysed by highly trained and experienced organisational psychologists. The candidate’s performance is compared against position-level benchmarks based on the Levels of Work framework, allowing us to form a picture of the level and type of position where this individual should be optimally utilised.

Leadership situations

To be effective, a leader must be able to deal effectively with six critical management situations, all of which are dealt with in EBS.

Leadership in problem analysis and decision-making (digital animated interactive performance-based exercise): EBS present a business problem in an online environment where the candidate interacts with information in a dynamic way to assess problem solving and decision effectiveness competence.

Leadership in general management (inbox): Typical organisational and management issues are dealt with, such as procurement, process design, cash flow and analysis of financial figures.

Leadership in project management (business case): This involves translating strategic direction of the business into a project plan.

Leadership in staff management (caselets): This includes typical staff management issues such as performance, skills development, remuneration and unions.

Leadership in client relationship management (caselets): Here we look at typical client management issues including service delivery, client complaints and pricing.

Leadership in interaction management (role play) A number of business issues are dealt with in an interactive situation.

leadership