Not every management assessment is the same. Picking the right assessment approach could mean the difference between having an outstanding investment return and having to explain an ugly mess to your partners. Different options answer different questions, so you need to figure out what you most want to learn.
Picking good CEOs and CFOs for your portfolio companies is generally thought to be quite important to investment performance. You probably have a process that you use with some discipline. But does it work? And even if it does, can you improve it?
You can do some research to figure out the answers to these important questions. I've worked with some firms to try to understand:
• Whether some or all of the information they currently collect about CEO/CFO candidates in fact statistically predicts their performance outcomes.
• How the firms can make their hiring processes more efficient and more accurate in predicting success.
What do Al Gore, Margaret Thatcher, Martin Luther-King and Mother Teresa have in common? They are or were great influencers. This presentation looks at the four influencing strategies people use to persuade others.
David Neagle teaches business owners ways to more effectively manage their businesses and drive their earnings. For example, David Neagle provides suggestions on how to hire effective people to help with the running of a business.
Picking good CEOs and CFOs for your portfolio companies is generally thought to be quite important to investment performance. You probably have a process that you use with some discipline. But does it work? And even if it does, can you improve it?
You can do some research to figure out the answers to these important questions. I've worked with some firms to try to understand:
• Whether some or all of the information they currently collect about CEO/CFO candidates in fact statistically predicts their performance outcomes.
• How the firms can make their hiring processes more efficient and more accurate in predicting success.
What do Al Gore, Margaret Thatcher, Martin Luther-King and Mother Teresa have in common? They are or were great influencers. This presentation looks at the four influencing strategies people use to persuade others.
David Neagle teaches business owners ways to more effectively manage their businesses and drive their earnings. For example, David Neagle provides suggestions on how to hire effective people to help with the running of a business.
A recruitment strategy is a clear plan that explains what roles you'll recruit for, when, why and how. It should be tied to your overall company objectives. Your strategy must be possible to implement and easy to communicate. While you can tweak your tactics, the strategy must always be clear.
How to Build High-Performance Sales Teams and specifically, how the PXT Select Assessment solution can help you select and develop great sales people to drive organizational results.
From order taker to talent advisor: breaking down the drive-thru window | Tal...LinkedIn Talent Solutions
Suzanne Myers, VP, Talent Acquisition, RealPage
Shelly Patman, Sr. Manager, Corporate Recruiting, RealPage
Denielle Waite, Sr. Manager, Technical Recruiting, RealPage
Have you ever wondered why it can be frustrating to work with a manager who views recruitment as a drive-thru window? You can probably hear it now: “I’ll take 6 engineers and 2 QA analysts please.” A hiring leader expects the perfect candidate to be delivered at warp speed, while a hiring manager and a recruiter simply have different viewpoints of the process to hire talent. Managers ask for talent and expect that we - recruiters - will deliver this talent quickly and on demand. What managers don’t usually know is all that happens as part of planning and executing a search strategy. How do we expect them to believe anything else if we’ve not provided transparency into the process? Join this session to learn how to gain credibility and strengthen your partnership with hiring managers, and how to organize and lead the selection process in a way that impresses them and positions you as a talent advisor.
Check out the best of Talent Connect: http://bit.ly/1MBqz6m
It's time for business analysis to come of ageJoe Newbert
Business analysis is still to realise its full potential, popular myth-conceptions need to be dispelled and the profession must be reframed.
http://inter-view.report is a platform for practical improvement - a #baportrait where the business analysis community at large collaborate.
Talent Acquisition - The Customer PerspectiveTALiNT Partners
Every interaction with a new candidates no different than a new customer. Do you apply the same rigour in candidate selection as you would to customer service?
Is your employer brand, employee value proposition and employee engagement aligned?
Would your own company’s employer brand persuade you to apply for a new role in your company?
The transformation of the resourcing program at House of Fraser in under a year
Condensing a 3 year program into 18 months
Doubling the number of applications to 400,000 people whilst improving workflow and reducing advertising costs
I'm afraid to ask an executive to do a touchy feely management assessmentLeslie S. Pratch
Knowing before or shortly after you invest in a company whether management can do what you need done and can cope with unexpected change is important, especially in volatile industries. It makes sense to have management assessed with a method that informs you of what the managers can do and how best to work with them for all of you to be successful.
Some investors almost always do rigorous and informative management assessments. But others are very skittish about asking leaders of the companies in which they are investing to be assessed. They say they are worried about losing the deal by asking before it's closed or of straining relationships with management afterwards.
Happily, you can get you what you need – enough knowledge long enough in advance to be maximally useful – without risking the deal.
To evaluate portfolio company managers, you need evidence that demonstrates they have or lack the necessary competencies. Interviews and reference checks are the main tools available during due diligence to see if the managers have the skills you've defined in your competency framework. During due diligence, it's important to learn both what an executive has accomplished and how. To do so, you must evaluate the personal characteristics, skills, knowledge, experience and attitudes used to achieve results and consider these factors against the criteria you identified for successful performance.
An investor's least favorite statement -- Oops Wrong CEO -- and You Need More...Leslie S. Pratch
While you own a company, you need the right people to execute and adjust the plans that will achieve your financial targets. When you go to sell, the team in place must be strong enough to convince buyers there's still substantial upside ahead. Managing human capital proactively and systematically can prevent problems and make your investments much more valuable.
A recruitment strategy is a clear plan that explains what roles you'll recruit for, when, why and how. It should be tied to your overall company objectives. Your strategy must be possible to implement and easy to communicate. While you can tweak your tactics, the strategy must always be clear.
How to Build High-Performance Sales Teams and specifically, how the PXT Select Assessment solution can help you select and develop great sales people to drive organizational results.
From order taker to talent advisor: breaking down the drive-thru window | Tal...LinkedIn Talent Solutions
Suzanne Myers, VP, Talent Acquisition, RealPage
Shelly Patman, Sr. Manager, Corporate Recruiting, RealPage
Denielle Waite, Sr. Manager, Technical Recruiting, RealPage
Have you ever wondered why it can be frustrating to work with a manager who views recruitment as a drive-thru window? You can probably hear it now: “I’ll take 6 engineers and 2 QA analysts please.” A hiring leader expects the perfect candidate to be delivered at warp speed, while a hiring manager and a recruiter simply have different viewpoints of the process to hire talent. Managers ask for talent and expect that we - recruiters - will deliver this talent quickly and on demand. What managers don’t usually know is all that happens as part of planning and executing a search strategy. How do we expect them to believe anything else if we’ve not provided transparency into the process? Join this session to learn how to gain credibility and strengthen your partnership with hiring managers, and how to organize and lead the selection process in a way that impresses them and positions you as a talent advisor.
Check out the best of Talent Connect: http://bit.ly/1MBqz6m
It's time for business analysis to come of ageJoe Newbert
Business analysis is still to realise its full potential, popular myth-conceptions need to be dispelled and the profession must be reframed.
http://inter-view.report is a platform for practical improvement - a #baportrait where the business analysis community at large collaborate.
Talent Acquisition - The Customer PerspectiveTALiNT Partners
Every interaction with a new candidates no different than a new customer. Do you apply the same rigour in candidate selection as you would to customer service?
Is your employer brand, employee value proposition and employee engagement aligned?
Would your own company’s employer brand persuade you to apply for a new role in your company?
The transformation of the resourcing program at House of Fraser in under a year
Condensing a 3 year program into 18 months
Doubling the number of applications to 400,000 people whilst improving workflow and reducing advertising costs
I'm afraid to ask an executive to do a touchy feely management assessmentLeslie S. Pratch
Knowing before or shortly after you invest in a company whether management can do what you need done and can cope with unexpected change is important, especially in volatile industries. It makes sense to have management assessed with a method that informs you of what the managers can do and how best to work with them for all of you to be successful.
Some investors almost always do rigorous and informative management assessments. But others are very skittish about asking leaders of the companies in which they are investing to be assessed. They say they are worried about losing the deal by asking before it's closed or of straining relationships with management afterwards.
Happily, you can get you what you need – enough knowledge long enough in advance to be maximally useful – without risking the deal.
To evaluate portfolio company managers, you need evidence that demonstrates they have or lack the necessary competencies. Interviews and reference checks are the main tools available during due diligence to see if the managers have the skills you've defined in your competency framework. During due diligence, it's important to learn both what an executive has accomplished and how. To do so, you must evaluate the personal characteristics, skills, knowledge, experience and attitudes used to achieve results and consider these factors against the criteria you identified for successful performance.
An investor's least favorite statement -- Oops Wrong CEO -- and You Need More...Leslie S. Pratch
While you own a company, you need the right people to execute and adjust the plans that will achieve your financial targets. When you go to sell, the team in place must be strong enough to convince buyers there's still substantial upside ahead. Managing human capital proactively and systematically can prevent problems and make your investments much more valuable.
When hiring an executive, you cannot afford for the candidate to be anything short of a success. While there are tangible costs associated with recruiting the wrong person, there are also intangible costs to consider.
The wrong executive hire can cause significant disruption and damage to morale and productivity and diminish work quality and your business’s overall reputation.
With changing times, business operations are transforming, complexities are increasing, workforce diversity is growing, and tech is emerging at the forefront.
These transformations call for leaders who are adept communicators, agile and flexible in their approach, analytical thinkers and quick decision-makers.
With these, it is therefore imperative to deploy assessment tests to determine the executive’s observable behaviours and evaluate how they approach challenges, engage in interpersonal communication, and solve problems, thus enabling you to understand how to leverage the incoming leader’s strengths, given the needs and business strategy.
In this deck, you will learn;
1. The basis of executive hiring using Assessment
2. Proven strategies to adopt when filling an executive position
3. Path to take when deploying Assessment
4. How to use Assessment for hiring Senior staff
With 70 percent of US workers disengaged from their jobs, the American workplace has some work to do, especially during this time of economic uncertainty. The simple truth is employee disengagement costs money—serious money. In fact, disengaged employees cost the US economy up to $605 billion per year—not exactly pocket change. Now more than ever, companies need engaged employees to keep their businesses afloat, save money, and discover the solutions needed to navigate our current crisis.
So, what can organizations do to boost engagement during challenging times?
When you’re acquiring a company or building a management team, assessing skilled managers effectively can lead to improved ROI. Private equity investors can do more to achieve sustained success by making the process as systematic, rigorous, and efficient as possible. Having a system in place to guide judgments about management talent can add value.
Employers increasingly rely on assessments to acquire, develop and promote the best talent. With this trend has come significant confusion about how to choose assessments and how to best use them to obtain a competitive advantage. This whitepaper will help you make sense of the assessment nonsense.
Are you the founder of a Start-up company and worried about the management of human resource? Here are a few points that will help you to understand the role of human resource (HR) in start-ups.
7 Hazards to Avoid:
1) Inadequate capability.
2) Poor job fit.
3) Fuzzy goals and accountabilities.
4) Poor relationship with manager.
5) Poor relationship with co-workers.
6) Health and wellness issues.
7) Physical and environmental factors.
Jamie Dimon is a good example of what active coping looks like. Dimon started working with Sandy Weill at American Express in 1982. He left American Express with Weill and built what became Citigroup. Dimon has led JPMorgan Chase since late 2005 on a steady growth path, transforming it from a troubled firm into one of the largest and most well-respected banks in the world. Dimon also played a key role addressing the financial crisis of 2008. At that time, JPMorgan acquired Bear Stearns as it was collapsing because it was “the right thing to do for the country.” JPMorgan also acquired Washington Mutual six months later. Today, Dimon is considered one of the top banking leaders in the world and JPMorgan has consistently outperformed its competitors. Its 2019 profit ($36 billion) was the largest ever for a U.S. bank. Dimon has led JPMorgan through tumultuous times dealing with crises and seizing opportunities, which is what I call active coping.
Active coping is being able—emotionally, intellectually, and behaviorally—to successfully confront unforeseen challenges and successfully capitalize on emergent opportunities. Most people, and even many CEOs, are not active copers. Some CEO’s run from problems, some lash out at others, and some passionately wait and hope that problems (or even opportunities) will just go away. Active copers, by contrast, are built to be capable and eager to deal with obstacles and opportunities. The style is baked into who the person is. Active copers adapt resourcefully and effectively to novelty and change, repeatedly. They learn from experience. When they fail, they seek to learn why, and do better the next time. They don’t flee constructive criticism but seek it to gain insight. They take into account the interests of others, as well as their own, and the interests of society.
Reed Hastings is a good example of what active coping looks like. Active coping is being able—emotionally, intellectually, and behaviorally—to successfully confront unforeseen challenges and capitalize on emergent opportunities. Active coping is an attribute of a healthy personality. It is baked into who the person is. If you are an active coper, you adapt resourcefully and effectively to novelty and change, repeatedly. You learn from experience. When you fail, you seek to learn why, and you respond more effectively the next time. Rather than hide from constructive criticism, you seek it out as a source of insight. You take into account the interests of others, as well as your own, and the interests of society.
When you pick people to run your companies, you’d like to find someone who has the active coping style of Hastings, who can lead an organization through tumultuous times. The best leaders combine active coping, intelligence sufficient to think through the level of complexity they will face in the job (which might vary from organization to organization or even over time) and a motivation to lead.
Some CEOs cope with whatever life presents; more than that, they grab opportunities. They learn from experience, face problems rather than avoid them, overcomes obstacles rather than giving up or blaming others. They consider others’ interests and the interests of society, as well as their own. They seize opportunities that others miss. They seek out multiple perspectives, in order to avoid own blind spots. These are active coping behaviors. Lou Gerstner is a model of active coping. CEOs for your portfolio companies should be too
Some formerly “average-seeming” people shine in a crisis; some top performers crack under pressure or just under the change in circumstances. You can learn whether candidates you are thinking of hiring will shine or crack. It’s the people who shine in a crisis that can become leaders and give others the confidence that they, too, can handle the crisis.
Some of your portfolio companies may have to hire rapidly, and others may have to furlough workers. How do you decide who to get or keep, and who to pass on or let go? There aren’t many people who have gone from managing by walking around to managing by zooming around. If you’re not zooming around (or doing something else consciously) to get the information you used to get in the ordinary course of activities, then you’re probably not getting the data. You also lose the peripheral activities. Nothing happens because you run into somebody and there are a lot of people for whom peripheral activities are an important part of the mix. Fortunately, there's a 60-minute solution for companies looking to hire and for companies needing to retrench.
What's involved in a great CEO psychological assessmentLeslie S. Pratch
Having a better understanding of your CEO through a psychological assessment can be extraordinarily valuable in creating an effective working relationship. It can also be extremely valuable when considering candidates in rare instance of CEO transition. This article describes what is involved in a great CEO psychological assessment.
Steer towards success: What very successful portfolio company boards doLeslie S. Pratch
In our previous edition, we began to look at how you can design and fill the boards of your companies so they will be more effective. This edition shifts attention to board processes. Board processes exist to help the company reach its goals. First, we’ll examine how boards organize their activities. Then we’ll look at how board members actually behave in and between board meetings to support the company’s achieving its goals, and how to build the trust that facilitates good interactions between the board and management. The purpose of board processes is to encourage good board behavior to happen, but sometimes bad behavior still happens, and drastic action may be required.
Getting the return you want how some very successful pe investors build thei...Leslie S. Pratch
This edition examines what you as a private equity investor can consider as approaches to make the boards of your companies work more effectively. It is the result of initial conversations with 12 experienced private equity investors and board members. If you are an experienced board member, you may agree, disagree or have another perspective on the topics discussed. If you share those ideas with me, I will try to share them with others in future editions. If you are less experienced as a board member, you may also have some additional thoughts, and likely will have much to learn from the experts sharing their wisdom.
My last post introduced an approach to assessing prospective portfolio company managers efficiently, during due diligence and in subsequent waves of management team building. Today, I’m taking a closer look at the competencies because much of your assessment will focus on determining the competencies managers possess.
The competencies encompass four significant domains of individual capability:
1. Judgment
2. Influence
3. Management
4. Personality
How to get the most out of your team (and keep the ones you really want for a...Leslie S. Pratch
You pay people – so it’s a good idea to get the most out of them. You invest in them, so it’s good to keep them in your firm for as long as you want them. Start by recruiting well and then support firm members' maximum development and contribution by understanding what makes them tick and helping them succeed. You also can help them (and you) by understanding what makes you as a firm leader tick, and sharing that with the others at your firm.
The process to get the most out of people is: (1) Learn about your own biases, blind spots, goals, and unconscious motivations. (2) Provide a way for others to learn their own biases, blind spots, goals, and unconscious motivations. (3) Tell others about yourself, including some of what you have recently learned. (4) Let others tell you what they’d like to tell you, of what they have learned and also share their perceptions of you. (5) Take action based on what is discussed.
How to get what you want (and move -- fast -- when you don't)Leslie S. Pratch
Not everyone is equally good at all parts of the "private equity person" role – some investors are better at sourcing deals, buying companies, or raising money than at being director or leading the Board. To be great at guiding portfolio companies, you need to know when and how to work with a CEO who will not always (or maybe ever) be pleased with the Board. Getting each party to do their part in achieving the aims of the investors – a job they must do together – benefits from planning, skills, and knowledge.
Management assessment leads to action and improved ROILeslie S. Pratch
A good management assessment can help you understand the person behind the more easily observable track record and activities. Below is a much-abbreviated version of an actual report I sent to the investors who had hired me to assess a potential CEO whom I call “Mack.” It will give you a flavor for the difference the assessment can make in maximizing ROI (and minimizing anxiety in investors).
When the CEO hasn't "done it all before" -- but could still be the right choiceLeslie S. Pratch
If you are like many investors, you like a CEO who has already done that job well in a similar situation; you believe that the CEO's documented experience reduces your risk. Would you be willing to go with someone who doesn’t have “the track record”? What if there was a real downside to not going with the “novice”? Sometimes investors needlessly throw away important talent. You can frequently get the results you need if you understand the person you are considering, what makes them tick, and what would make them tick even better.
The right kind of management assessment can get you the insight that you need. And the right assessor will tell you how you should behave differently in order to maximize the executive’s performance. That’s what happened in the case of Wayne….
Don't lose the CEO you want to hire before they arriveLeslie S. Pratch
It's a huge loss when a candidate you have wooed for a CEO or other top job at a portfolio company turns you down. You’ve failed to get the attractive candidate -- and you've wasted time and energy pursuing them instead of finding and hiring someone else.
You (and your search firm if you are using one) can minimize the probability of a late candidate withdrawal by identifying all potential issues early in the recruitment process.
We'll look at some "bad outcomes" and then see what search pros suggest to avoid them.
How to attract (and hire and keep) a capable portfolio company ceoLeslie S. Pratch
Sometimes private equity firms have trouble landing the CEO of their dreams. The firm identifies him or her (or thinks it has) but then the candidate chooses not to pursue the opportunity or even turns down the offer. While some of the blame may fairly belong to a search firm, much of the blame may belong to the private equity firm. You may not be doing everything you can to be attractive to the best CEOs. And even if you haven't had a problem, you might have some room for improvements that could help you, your CEOs and your investors.
2. Not every management assessment is the same. Picking the right
assessment approach could mean the difference between having an
outstanding investment return and having to explain an ugly mess to
your partners. Different options answer different questions, so you
need to figure out what you most want to learn.
3.
4. What you might like to know
Has he done it before?
This question is good to ask when you know what you want and are sure
it isn't going to change. A good way to answer this question is with a
talent and skill assessment. Search firms, many assessment firms, and
many psychologists focus on past achievements. They document if the
“candidate has done it before in a compelling fashion.” Typically, they
use behavioral interviewing to understand how and when the candidate
has “done it before.”
If you plan to exit the deal in three to five years, and know that the
company won’t change and the world won’t change in that interim, and
5. that there will be no unexpected opportunities and no unexpected
problems, then this could be a good approach – for your needs.
How will he cope with change?
Will he capitalize on opportunity? Can he do something no one has ever
done? How much do you care about how well the candidate will
perform under new or unexpected conditions? You can pick someone
who seems like he fits the bill but the world changes for better or
worse. When it changes for the worse, you see how adaptable he is. But
you may not know when it changes for the better, because the
executive doesn’t take advantage of the change until the competition
does.
6. In faster-moving or more uncertain markets, expecting the unexpected
makes sense. You need someone with skills but ability to cope – which
requires raw cognitive capability and a stable information-seeking
personality much more than specific pre-defined skills – is also critical.
Talent and skill assessments don't address these at all. An approach like
Pratch & Company's – aimed at understanding active coping capabilities
as they will be needed for the business challenge – fits well here.
How can you get the most out of the executive?
Sometimes a candidate brings a lot but isn't perfect. That introduces the
other party in the interaction -- you. How can you act so you capitalize
on the executive’s strengths and proactively protect against his
weaknesses as a leader? Talent and skill assessments won't shed any
7. light here; Pratch & Company's approach to understanding personality
as part of the assessment will.
How will he cope in a private equity environment?
The pace is fast, and CEOs have to cope with having investors
challenging their thinking. If they’ve been in a private equity
environment in the past and you know the investors they worked with
before, a talent assessment is adequate. If they’ve never been in a
private equity environment or you don’t know the other investors, you
should use Pratch & Company.
8. Are incumbents worth keeping, even though the strategy is
changing?
You are inheriting a management team. They know the business and
losing them would be a big loss. But they haven't done what is being
called for next, even if they thought of it (similar to founders' problem
with startup), so they will all fail a simple talent assessment. But they
might very well be keeping if you could supplement them with your
skills or add a team member at the right time. If you assume that they
can’t do it, you will have to hire a new team, which will lack the
understanding of the company the original team had.
9. What's in it for the executive?
Executives don't generally relish the opportunity to be assessed. Putting
them through a painful assessment that provides no value to them
won't be a great way to start a relationship and might even be a way to
end one.
Talent and skill assessments document what the executive says and
usually provide no value to the executive. Assessments like Pratch &
Company's that find underlying themes can help executives understand
themselves better and can provide guidance that the executives can use
to improve how they interact with others (including but not limited to
you).
10. About the Author
Leslie Pratch
Leslie S. Pratch is the founder and CEO of Pratch & Company. A clinical
psychologist and MBA, she advises private equity investors,
management committees and Boards of Directors of public and
privately held companies whether the executives being considered to
lead companies possess the psychological resources and personality
strengths needed to succeed. In her recently published book, Looks
Good on Paper? (Columbia University Press, 2014), she shares insights
11. from more than twenty years of executive evaluations and offers an
empirically based approach to identify executives who will be effective
within organizations – and to flag those who will ultimately very likely
fail – by evaluating aspects of personality and character that are hidden
beneath the surface.