Everything is data-driven these days, so why should your leadership selection process be any different? A lot of people don’t use assessments when choosing leaders and often wonder, “What’s the point?”.

Truth be told, if you’re not using data to find and develop leaders, you’re risking an expensive mistake.

Data helps us make objective decisions without relying too much on emotions. After all, companies don’t make other expensive choices without justifying their decisions. For example, theater companies and sports teams hold tryouts for actors, musicians, and athletes. Nobody fits every role in a show or every position on a team.

Similarly, pilots spend hours in simulations before their first flight. And before you can fly a plane, you must prove you know what you’re doing and can handle it. If you can’t prove it, you wouldn’t even be in the cockpit. People weigh these decisions heavily because a misstep comes with severe implications.

So why don’t we do this for leadership? At many companies, leaders are chosen simply because they are good performers and they “seem like” good leaders. And we often avoid telling them about the weaknesses they need to work on because it might be uncomfortable.

This approach comes with heavy consequences. It introduces a lot of unconscious bias into the process. Poor leaders often create low morale, have a disengaged team, and lower productivity. Unfortunately, these effects usually linger long after a leader has “left the building.”

And that’s just the cost for one frontline manager. For each higher-level position, the cost of poor leadership deepens as leaders have more influence and control over people, strategy, and budget. By the time leaders get to an executive level, one individual’s weaknesses can end up costing a company millions of dollars.

With such a steep risk of failure, it’s amazing that the question is still, “Why do a leadership assessment?”. Instead, it should be “How should I use assessments to get better data on leaders?”.

How to Use Leadership Assessments

One of the first things to understand about assessments is that they can’t just be another HR process. Rather, they should be a rich experience that benefits the leader and the company.

Think of assessments as a flight simulation or audition. In part, it’s a test to ensure the person is ready for the job ahead. But it also gives the participant wonderful practice to know whether they are ready to perform on the job. Even if they aren’t perfect, they’ll know what they need to work on to get better.

Companies can use the data in a wide range of ways. In some companies, they use it to fuel objectivity in hiring and promotion decisions. They can also use the data to identify candidates for high-potential pools and as a guide for succession planning.

Perhaps most importantly, data helps lead development discussions with individual leaders.

Data provides insight into their behavioral strengths and areas to develop. It also reveals personality traits that could enable or derail future success. This self-awareness can have a deep impact on a leader’s career and help them become successful in their current and future roles.

But above all, group data from assessments is incredibly powerful. Looking across your leaders, you can see hot spots where leaders need help and plan group development for them. You can also see how their strengths and gaps line up to your business strategy.

For more information on leadership assessments, including the various types of leadership assessments, visit DDI’s blog.