Expert Perspective by Arlene Brewster Ph.D.
An article in The Wall Street Journal titled “Financials Post Sign of Times: CEO Wanted” (June 24, 2009 by Susanne Craig and Joann S. Lublin) got me thinking about how companies go about identifying, selecting and hiring high level executives.
The very public failure of some highly paid CEOs to chart a profitable course for their companies has started some hiring committees to rethink the methods used to select top executives. There is now a renewed interested in psychological testing as way to obtain a more complete and possibly more accurate assessment of candidates. Today psychological testing could not replace resumes, references, job history and other standard data. Rather it could be used to deepen the insight gained from that traditional material. But before we all jump on the Myers-Briggs bandwagon (or the psychological test of your choice), it is important to be aware of the limits of this type of testing.
First, and this is obvious, testing results provide only a picture of the candidate. Like all pictures, it contains distortions. Testing provides information about a candidate only as he or she compares to others in a specific group. Sometimes that group is a random sample of whole populations, and sometimes it is as specific as other personnel in similar positions with similar companies. Even the most rigorously constructed, researched, and validated test relies on the assumption that the attributes being measured and compared are useful and important to people applying them in their evaluation process.
An example can illustrate this: Everyone hiring a chief executive would agree that whatever else CEO needs to be, they need to have a high degree of intelligence. So should CEO’s be administered IQ tests? Well perhaps, but here are some of cautions. The standard IQ test score correlates highly with academic success; it is far weaker as a predictor of success in other areas. It doesn’t measure cleverness, ingenuity, street smarts, gut instincts, decision-making, and a whole lot of important aspects of intelligence that a CEO needs. Besides, would a CEO with an IQ of 150 do better than a CEO with an IQ of 125? Both scores are high enough to predict success in an academic graduate program, but these high IQ scores have not been validated as predictive of success as a CEO. (Perhaps that’s a good “shovel ready” project that could warrant stimulus funding.)
In the last decade there has been an increasing emphasis on emotional and social Intelligence. This is very broadly define as the ability to manage ones emotional life, read social clues, delay gratification, follow through on plans and goals, and generally navigate the world of people — certainly a very important skills for executives. As Daniel Golden states in Emotional Intelligence, emotional intelligence is a better predicator of success in the workplace than general IQ — a lot of people with 160 IQs scores are working for people with far lower scores.
But the example of General George Patton makes an interesting counterpoint to this argument. Patton had low social intelligence. He was in fact eventually relieved of command because he could not get along with other people in the command structure. Yet Patton was a brilliant strategist, probably the best of all generals in the Allied Army. If his orders were followed, the war in Europe would likely have been won sooner and many soldiers and civilians would have been spared. Could a CEO like General Patton save a company facing crises, even though he or she would be almost impossible to work with? I would bet that the “Patton CEO” could do the job, although I don’t think I would want to work for him or her.
An additional characteristic of psychological testing is that it looks at traits that are considered to be essential to succeed in a field. Most people might think chief executives need to be aggressive, decisive, confident, and action-oriented. But aggressiveness can lead to inappropriate risk taking, decisiveness can tip toward impulsivity, and an excess of confidence can quickly become arrogance. All of these traits need to be controlled, balanced with other attributes, and appropriate to the situation. To that end, psychological tests usually provide profiles showing how traits interact. The more complex the trait, the more complicated the profile, and the more difficult it is to make sense of it all or to discern what combinations would predict success or failure in a given cohort of people. Attributes such as “ high moral values,” “wisdom” “character”‘, and “excellent judgment” are very complex traits, and very, very difficult to assess.
Another example. What makes someone choose the career path of a criminal or of police officer? (Interestingly, people in both of these career paths show very similar personality traits). How do people choose the path they take – lawful or lawless? This is a difficult question that has to do with personal values. Clearly a company would want the “police officer” rather than the “criminal” but if the personality trains are similar, how do you be sure of what you are getting based on the results of the personality test?
That leads us to another key issue. Psychological testing is only as good as the questions it tries to answer. The better thought out the questions, the more useful the testing can be. Formulating the questions is the work of the hiring committee, not the job of the assessment instruments.
One more interesting fact: technology is going to play an increasingly important part in the future of psychological testing. Technical instruments such as the CAT scan and studies of the impact hormones have on behavior are accelerating our knowledge about how the brain works in response to difficult situations. “Brain maps” and other technical advances are reframing our understanding of the interaction of the cognitive, memory, and emotional workings of the brain. Here is a quick but fascinating example. The military wants to predict how people will act under extreme, life-threatening situations. They want to know whether candidates for “special ops” and other very high-risk positions would panic or maintain their cool. The military identifies candidates by testing them in life-threatening situations. The military found that those who handle themselves well under life-threatening situations produce a hormone that suppresses the elevation of stress related hormones. Those soldiers remain calm in situations in which most people would panic. These blood tests are now known to be a reliable predictor of “panic vs. calm” behavior.
So maybe in a generation we can give CAT scans, blood tests, and the like to executives to see how they respond to complex and stressful situations. The perhaps we will be able to analyze brain and body scans to find superstar CEOs.
Until then we can rely on the data we have (resumes, references, work history) and what we know to be important indicators of success for CEO’s. I maintain that a high level of competence in the area of business management is probably the most important predictor of whether an executive’s contribution to a company will promote the company’s success. This leaves only a few questions to answer: how do we define “competence”, how do we define “business management” and how do we define “success”. Answering those questions is a good place to start for any hiring committee in need of a new CEO. Email Arlene Brewster Ph.D. at Arlene.Brewster@grahall.com