A company DDI worked with had a CTO who thought he needed to leave to continue growing his career. The company’s CEO thought there may be value in providing the CTO with a leadership skills assessment to see if he could be a potential COO successor.

The CTO performed well on the assessment and quickly developed in the areas where the assessment showed there were gaps. Soon, he became COO and thrived in the role.

This CTO was a hidden talent who, without assessment, would not have been a contender for COO. And what happened next shows the combined power of assessment and development.

This is just one example of the benefits of combining assessment with development. The combination is also key to boosting an organization’s bench strength. For example, DDI’s Leadership Transitions Report 2021 shows that nearly 40 percent of organizations with high-quality development and assessment had a strong bench of leaders ready for critical roles.

Why Use Leadership Skills Assessments?

So why should companies use leadership skills assessments? Imagine going to visit a doctor who says as soon as you walk into the office, “I know what’s wrong with you. Here’s what we are going to do.” I am certain you wouldn’t trust the accuracy of their diagnosis or the suggested treatment. For you to have confidence in a doctor, they need data to make informed decisions.

Similarly, individuals deserve to have data about their strengths and development areas at work. This knowledge greatly helps them make informed decisions about their career goals. It also helps temper their ambitions. Additionally, this is a major contributor to employee engagement and retention.

Why else do companies use leadership skills assessments? Companies manage their inventories of raw materials, components, and finished products. Assessment enables them to inventory their talent.

They need to know their leaders’ strengths, growth areas, potential, and personal attributes. This information enables them to decide who to invest in. And then for the people they choose to invest in, companies want to know what they need and when, and then how to provide the best development.

Further, according to the Leadership Transitions Report 2021, companies with a strong formal assessment program say they can fill 56 percent of critical leadership roles, compared to only 43 percent for companies without a strong formal assessment program. However, 86 percent of organizations report using formal leadership development programs, but only 57 percent say they use assessment.

Using my visit to the doctor analogy, this means 29 percent of patients are taking the prescribed treatment at face value without knowing what is wrong. They also likely don’t understand why they have the prescription or even if the treatment is going to make them better.

Types of Leadership Assessment

There are many different types of leadership assessment, so it’s important to know which one is the most appropriate based on what is needed. But first, what does it mean to use high-quality assessment?

According to our Leadership Transitions Report 2021, high-quality assessment should:

• Be competency-based.

• Offer an objective view of strengths and development areas.

• Pinpoint the exact behavior within the competency that a leader needs to focus on.

• Give insights about readiness for future roles.

• Provide resources to support development post-assessment.

For example, simulations are a type of assessment typically used during the hiring or development process. Unlike many general tests, simulations focus on tasks that would be required in the job or role.

In addition, leadership tests are often used to gauge the abilities, skills, and motivations of employees and job applicants. And another example is a 360. This assessment tool that solicits feedback about an employee from all directions: their managers, co-workers, and direct reports.

Each tool can be very helpful when used appropriately. For a complete guide on all the different leadership assessments, check out our Ultimate Guide to Leadership Assessment.

So, when should you use a leadership skills assessment? And how can these assessments transform development? Find out in DDI’s blog.