Effective leaders are critical to the success of any organization. Good leaders build strong teams, motivate employees to perform their best, and help foster a work environment that is continuously aligned with the organization's goals and values. Poor leaders, on the other hand, are associated with low productivity, decreased employee morale, and high rates of attrition.
Despite the importance of leadership roles, many businesses do not have a solid plan in place for replacing key executives that leave the company, whether due to retirement or turnover. In fact, it is estimated that as many as 50 percent of companies with a yearly revenue greater than $500 million do not have a formal CEO succession plan.
One of the major challenges faced by businesses as far as succession planning is concerned is the lack of a reliable method of identifying and developing potential leaders. This is where leadership assessment comes in. By analyzing performance data, establishing a formal mentoring system, and creating individualized development plans, companies can build a pipeline of talent to ensure a smooth management succession process should key roles need to be filled in the future.
What Is a Leadership Assessment?
Leadership assessment isn't a single strategy, but rather a multi-pronged approach to evaluating employees' leadership potential. An assessment may include:
- Success profiles - In order to identify the leaders of tomorrow, it's crucial that businesses define what successful leadership looks like today. What makes a good or great leader in your organization? Knowing what skills and character traits are essential for performing well in a given leadership role is the key to selecting the right individual(s) for advancement.
- Leadership questionnaires - Leadership questionnaires can be invaluable in helping board members evaluate the motivations, skills, and character traits of potential leaders. Leadership questionnaires also highlight potential red flags, thereby reducing risk.
- 360-degree feedback surveys - By gathering feedback from a candidate's subordinates, superiors and colleagues, company executives gain valuable insights into the candidate's strengths, weaknesses and areas of improvement.
- Mentoring programs - Formal mentoring programs help new or current employees bridge the gap between their own experience and the experience needed to fulfill a leadership role. Mentors provide valuable advice about what types of assignments to seek out, which individuals to connect with, and how to progress within the organization.
Using leadership assessment ensures you're promoting the right people into the right positions should key management roles become available. Consider how your business will implement leadership assessment into a a larger succession plan in order to ensure the future profitability of the organization.