The Science of Selecting High-Performing Leaders - DDITalent Acquisition Factbook, Bersin &...

The Science of SelectingHigh-Performing LeadersWith the right data, you can hire and promote the best leaders to create engagement, profitability, and impact.

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No surprises. They’re fine for birthdays—but not when making a hiring or promotion decision. Organizations spend nearly $72 billion annually on recruitment*—yet DDI research shows that for many, the odds of making a successful decision remain at 50-50. With productivity and profitability at stake, there isn’t a business—large or small—that can afford a heads or tails call on choosing the right leadership.

The problem is with the data. Despite the quantity of candidate information collected, the quality is often poor. The data are either incomplete, ambiguous, or inconsistently integrated and applied. The data answer the right questions, but can’t accurately predict current or future readiness for a role.

Consider, for example, the in-progress, massive move to digital. While it may be easy to identify the knowledge and past experience needed to drive technological transformation, it is much more difficult to assess the most relevant behaviors (e.g.,

creating disruptive innovation) and personal attributes (e.g., navigating ambiguity)—with high accuracy.

DDI eliminates the guesswork around promoting and hiring leaders by providing a complete picture of leader candidates. Our assessments go beyond mere ratings and reports to generate the powerful business intelligence necessary for formulating critical talent decisions. The assessments screen for skills and personality traits that aren’t easy to develop, and accurately predict both near-term and long-term performance.

This report is based on data compiled from thousands of assessments and impact studies conducted over more than 20 years. Inside, we demonstrate how our tests and simulations answer organizations’ toughest questions—how to identify leaders who can drive prof-itability, grow and engage others, etc.—and how the gap in participant scores translates to major advantages in leader performance and business impact.

Right Data.Right Leaders.

*Talent Acquisition Factbook, Bersin & Associates, 2011

http://www.ddiworld.com/selection

© Development Dimensions International, Inc., 2017. All rights reserved. 4 www.ddiworld.com/selection

Leaders with a long history of driving efficiency and

productivity not only point the way for employees, but

also build commitment to their organization’s long-term

strategy, translate company-level priorities into clear

individual-level accountabilities, and continually track

and optimize employee performance throughout the

year (vs. at annual review time). Unfortunately, finding

these leaders is a challenge for many. Our research*

shows that barely half of leaders consistently demon-

strate readiness in driving efficiency through process

execution, only 42 percent show readiness in process

innovation, and a mere 37 percent show readiness in

driving profitability.

This capability shortage raises the stakes for leader

appointment decisions. If hiring and promotion tools fail

to capture the information needed to gauge a leader’s

execution readiness, the consequences can be costly.

On the job, leaders with undiagnosed readiness gaps

are unlikely to meet performance expectations, and may

require lengthy (and unbudgeted) in-role development.

Great Leaders Drive Efficiency and Profitability

of leaders consistently demonstrate readiness in driving efficiency through process execution

51%

T H E S C I E N C E O F S E L E C T I N G H I G H - P E R F O R M I N G L E A D E R S

*High-Resolution Leadership, DDI, 2016

Only



DDI assessments identify leaders who are skilled at execution

High scorers4.1X more likelyto convert goalsinto results

92% saw positive impact onproductivity vs.

90% improved their ability to execute business strategy

High scorers 3.1X more likely to align strategic performance priorities

36% with prior selection process

Translate strategic priorities into operational reality. High scorers were 4.1 times more likely to convert strategic goals into measurable and sustainable results within their work groups.

Accelerate employee productivity. 92 percent of leaders saw a positive impact on employee productivity as a result of DDI’s interviewing program vs. 36 percent when other selection processes were used.

Set and track well-aligned employee performance. High scorers were 3.1 times more likely to align employee performance with organizational priorities more effectively.

Continue growing their skills in executing business strategy. 90 percent of DDI assessment participants improved their ability to execute business strategy following development based on behavioral feedback from the assessment.

Great Leaders:

High Scorers = Top 25%



Outstanding leaders aim to leave their mark on those

they manage. They strive to create stronger teams and

team members who are better prepared for advanced

roles. Their efforts and leadership philosophy are

foundational to the “grow your own” approach used

by companies wishing to design, fuel, and access an

internal pipeline of leadership talent. According to our

research, companies that fill more than 80 percent of

their leader roles with internal candidates are 3.8 times

more likely to have higher post-appointment leader

success rates.*

But there is more to this story. A sustainable pipeline,

with a self-replenishing talent pool, depends on leader

behaviors. Leaders must recognize—and actively

pursue—daily opportunities to offer feedback on

employee skill gaps. They need to create and assign

developmental assignments, and be willing to step

back from personal authority over every project so

that employees can step forward.

Strong Leaders Grow Others

greater likelihood that companies who grow their leaders from within will have higher overall leader success rates post-appointment

3.8


x

*Global Leadership Forecast, DDI, 2015



DDI assessments identify leaders who grow internal talent

High scorers 2.9X more likely to

improve motivation and performance

High scorers 2.9X more likely to exhibit flexibility,

contributing to high-performing teams

High scorers 3Xmore likely to create sustainable employee

capability

Coach others to improve and excel. High scorers were 2.9 times more likely to create agreement and motivate others to improve their performance and prepare for success in new roles.

Build a legacy of successful teams. High scorers, when interacting with direct reports, were 2.9 times more likely to exhibit flexibility, a critical skill for building cohesive and high-performing teams.

Empower others to act autonomously. High scorers were 3 times more likely to build employee capability by assigning tasks with clear boundaries, expectations, and follow-up.

Strong Leaders:




Customer relationship management is a top CEO

challenge, according to research conducted by The

Conference Board, third-ranked behind human capital

and innovation.* Yet, a study co-authored by DDI and

The Conference Board found that only 45 percent of

leaders consider themselves very prepared to meet this

relationship challenge. Regardless of whether leaders

directly or indirectly interact with customers, they must

make customer focus an imperative for every employee

action, decision, and consideration.

So organizations have the opportunity to hire and

promote candidates who will direct workplace operations

with the voice of the customer in mind.

Astute Leaders Focus on Customers

of leaders consider themselves very prepared to meet the customer relationship challenge

45%


Only

* The Conference Board CEO Challenge, The Conference Board, 2014



High scorers 2.3X more likely to make customer’s voice heard

DDI assessments identify leaders whoprioritize customer needs

High scorers 2X more likely to establish culture ofservice excellence

85% indicated new hires increased customer satisfaction levelsUnits managed by

high scorers had 9% increase in store productivity

Create a unifying passion for customer primacy. High scorers were 2.3 times more likely to make the voice of the customer a guiding force for priorities, decisions, and activities.

Establish a culture of service excellence. High scorers were 2 times more likely to build a sustainable culture of exemplary customer service.

Outperform peers in customer satisfaction scores. 85 percent of leaders saw a positive impact on customer satisfaction levels as a result of implementing DDI’s interviewing program vs. 27 percent when other selection processes were used.

Boost team productivity. Business units managed by high assessment scorers showed a jump of 9 percent in store-level productivity one year after the assessment vs. a 5 percent increase for those managed by lower-scoring candidates.

Astute Leaders:




As the pace of change accelerates in organizations

and uncertainty lingers, leaders must continually

demonstrate their own agility and adaptability—in

addition to driving these important performance

behaviors in their teams. They themselves need to

contend with change, while also enabling others to

move through daily disruptions effectively. In a DDI

study* focused on leaders in transition, 41 percent of

participants indicated that dealing with ambiguity and

uncertainty was the most challenging factor they

faced as they moved into roles with higher leadership

responsibility.

How then can organizations predict who will—and want

to—perform best in the difficult-to-develop areas of

adaptability and facilitating change? Properly configured

and validated selection tools can accurately determine

which leaders are more likely to demonstrate these

behaviors and to lead others through change.

Strategic Leaders Drive Change

of promoted participants indicated that dealing with ambiguity and uncertainty was the most challenging factor

41%


*Leaders in Transition, DDI, 2014



DDI assessments identify leaders who drive change

High scorers5.2X more likely

to facilitate change

High scorers 2.7X more likely to

champion change initiatives

High scorers2.2X more likelyto demonstrate adaptability in performance

20 80

40

100

90% improved inleading others

through change

60

Adapt and drive change. A leadership readiness assessment demonstrated that leaders with higher scores were 5.2 times more likely to perform strongly in key leadership areas such as adaptability and facilitating change.

Champion change and influence effectively. Leaders scoring higher on the readiness assessment were 2.7 times more likely to perform well in championing change (e.g., influencing others to understand).

Rapidly modify their performance after assessment feedback. 90 percent of managers indicated that direct reports improved their skills in leading others through change, when evaluating their performance six months or more after assessment.

Demonstrate greater adaptability in their performance. High scorers on judgment and work style-related screening tools were 2.2 times more likely to demonstrate adaptability on the job.

Strategic Leaders:

20 80

40

100

60




More than ever, organizations are challenged to promote

leaders into higher-level roles—often before they are

fully ready to perform. Our research indicates that

future leadership quality has remained consistently

weak since 2011: Only 15 percent of HR professionals

rank their future bench as strong.* In response to this

gap in ready-now talent, organizations often utilize

a pipeline approach across all leadership levels. DDI

assessments can ensure the sustainability of this ap-

proach, by consistently predicting leader performance

and growth. Across numerous studies, high scorers are

more likely to perform well, improve performance, and

be identified as high potentials. One study participant,

a global chemicals manufacturer, saw 90 percent of its

assessed leaders successfully transition into roles with

greater responsibility.

FocusedLeaders Quickly Move Up

of HR professionals rank their future bench as strong

15%


Only

*Global Leadership Forecast, DDI, 2015



28%Low

scorerspromoted

36%High

scorerspromoted

Promoted highscorers performed

20% better

+21% +24%

DDI assessments identify leaders who will accelerate upward

High (vs. low)scorers more likely

to be promoted

High potentials outscored low potentials in

important competencies

Comparison of performance between promoted high scorers and promoted

low scorers

Promotedlow scorersperformed17% worse

Financial Acumen

Establishing StrategicDirection

Notpromoted

Become high potentials. Leaders identified as high potentials scored higher in the assessment in important competencies such as Financial Acumen (+21 percent), Operational Decision Making (+11 percent), and Establishing Strategic Direction (+24 percent) vs. those rated as low potential.

Are more likely to be promoted. After being assessed, 36 percent of high scorers were eventually promoted vs. only 28 percent of low scorers. Further, higher assessment scores in specific competencies were also associated with a higher likelihood of promotion.

Advance based on well-informed decisions. Based on assessment scores, leaders who were promoted following assessment performed an average of 20 percent higher in their strength areas than leaders who were not promoted. Leaders promoted despite lower assessment scores performed an average of 17 percent lower in these performance areas than leaders who were not promoted.

Focused Leaders:

High Scorers = Top 25% | Low Scorers = Bottom 25%



In a study of leadership transitions, a third of leaders

indicated that engaging and inspiring employees is one

of the most significant challenges of a new leadership

role. This is potentially troubling, given that the quality

of leadership from managers greatly influences employee

engagement. The most effective leaders not only create

an environment that others find engaging, but also per-

form better themselves when engaged in-role and in

the business.

In a large study of nearly 4,000 employees across

many organizations and industries, we measured the

engagement level of both employees and their leaders,

and examined the link between the two. Employees with

highly engaged leaders had 14 percent higher engage-

ment scores and indicated a greater (19 percent)

likelihood of staying with the organization.*

Engagement also translated to effectiveness: Highly

engaged employees scored 2.5 to three times higher

on job-performance measures.

Engaged Leaders Maintain Others’ Engagement

stronger employee engagement and 19% higher retention when leaders are highly engaged

14%


*DDI research conducted across multiple client organizations



DDI assessments identify leaders who spark engagement

High scorers240% more likely to engage employees

High scorers 82% more likely to gain loyalty

72% of workforceindicated a

desire to stay

High scorers 350% more likely to reduce turnover

among direct reports

Excel at engaging their employees. High assessment scorers were 240 percent more likely to excel at engaging employees than low scorers.

Increase loyalty and satisfaction. High scorers were 82 percent more likely to gain the loyalty and satisfaction of their direct reports.

Create more engaged workforces. In one organization, after adopting DDI’s interviewing program, 72 percent of the workforce declared a desire to remain at the company until retirement. In a second study, following the implementation of the same program, employee engagement scores placed the organization in the top one percent of healthcare organizations in the U.S.

Reduce employee turnover. High scorers were 350 percent more likely to have lower turnover among their direct reports in a large life insurance organization. Using the same assessment in a large technology organization, high scorers were 123 percent more likely to be highly engaged.

Engaged Leaders:



Avoid unwanted surprises. With DDI assessments, you can make accurate hiring and promotion decisions that will drive your business forward. You’ll have the data to decide confidently and quickly—to keep pace with the ever-chang-ing needs of your business. You can’t afford to fall behind, and the repercussions of a single poor decision can be devastating. DDI assessments reduce uncertainty.

Specifically, our assessments can: • Identify leaders who are ready to

execute your business and cultural strategy, and help leverage their strengths and quickly develop their gaps for immediate organizational impact.

• Place leaders who will grow the talent in your organization—leaders who’ll be great coaches with the awareness and disposition to empower, drive, and motivate others to become better.

• Find leaders singularly focused on your customers—leaders who will differentiate you from your competition, drive your bottom line, and model the importance of a customer-first orientation to the rest of your organization.

• Choose leaders who will help your business navigate change and ensure that your company, your workforce, and your customers safely weather the storms—both large and small.

• Promote ready leaders sooner. Knowing the strengths and gaps of high potentials and other leader candidates will enable you to accelerate growth and readiness.

• Identify leaders who skillfully engage others and deliver results: lower turnover, greater loyalty, increased job satisfaction, and more highly engaged workforces that yield more high potentials.

How to Hire Better Leaders




With the right solution, you can eliminate productivity-killing hiring and promotion surprises. Here are three ways to start hiring better leaders now:

1Gather the complete, clear, and consistent data to pro-mote leaders who will drive the success of your organiza-tion with assessments at every level of the pipeline, from the CEO to the frontline.

www.ddiworld.com/expertise/leadership-development/ leadership-assessment

2 Make decisions about future leaders with scalable, high- impact automated tests to drive efficiency.

www.ddiworld.com/products/automated-tests

3Arm your hiring managers with the tools, skills, and pro-cesses to perfect the interview and interpret critical candidate information with structured behavioral interviewing.

www.ddiworld.com/products/targeted-selection

3 Ways to Start Now


http://www.ddiworld.com/expertise/leadership-development/leadership-assessment



http://www.ddiworld.com/products/automated-tests

http://www.ddiworld.com/products/automated-tests

http://www.ddiworld.com/products/targeted-selection

http://www.ddiworld.com/products/targeted-selection

SourcesGreat Leaders Drive Efficiency and Profitability (page 5) • Across three organizations and 358 assessment participants

• Across 14 organizations implementing the DDI program

• Across four organizations and 654 assessment participants

• In a manufacturing organization

Strong Leaders Grow Others (page 7) • Across 13 organizations and 2163 assessment participants

• Across six organizations and 891 assessment participants

• Across three organizations and 514 assessment participants

Astute Leaders Focus on Customers (page 9) • Across nine organizations and 1281 assessment participants

• Across six organizations and 1093 assessment participants

• Across 14 organizations implementing DDI interviewing programs

• In two retail service organizations

Strategic Leaders Drive Change (page 11) • Across three different organizations and nearly 500 leaders

• Across six large organizations and 900 leaders

• In a leading manufacturing organization

• Across three large organizations and 450 assessed leaders

Focused Leaders Quickly Move Up (page 13) • Across four organizations and 654 assessment participants

• In a large, global organization with more than 600 assessed leaders

• In a study with a large company in an HR technology/services organization

Engaged Leaders Maintain Others’ Engagement (page 15) • In a large life insurance organization

• In a simulation-based assessment

• In two healthcare organizations using behavioral interviewing

• In a large life insurance organization and a large technology organization




About the AuthorsKevin Cook, Ph.D. Kevin is a Vice President at DDI, leading the growth and management of

DDI’s talent acquisition solutions. He is responsible for four key DDI product

areas—Targeted Selection®, Automated Diagnostics/Testing, Competency

Services, and our Leadership Mirror® multirater suite. Kevin has more than

20 years of experience in the design, development, implementation, and

evaluative research of assessment and development methodologies at all

employee levels.

Evan Sinar, Ph.D.Evan is Chief Scientist and Vice President of DDI’s Center for Analytics

and Behavioral Research. In his role, Evan partners with client organizations

to architect and execute analytics initiatives to demonstrate the impact of

assessment and development programs on individual -level behavior change

and organizational-level business objectives. Evan is a thought leader and

influencer for DDI on leadership development and assessment, talent

analytics, data visualization, and generational differences.


About DDI

We work side by side with people who are relentless about identifying and developing leaders who perform and will leave an enduring legacy. Because better leaders lead to a better future, we’ve been obsessed with the science and practice of leadership for nearly five decades. We help clients uniquely define and achieve great leadership at every level of their organization, from aspiring leaders to the C-suite. Our promise remains: Together, we can co-create a solution that’s aligned with your business context and aimed squarely at your business goals.

We do this by sharing our expertise in leadership:Strategy 4 Selection 4 Development 4 Succession Management

EMAIL: [email protected]: www.ddiworld.com

© Development Dimensions International, Inc., 2017. All rights reserved.

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