Leslie Pratch on Assessing and Developing Leaders

By Leslie Pratch

If you are a board member or chairman it’s important to know what kind of person you have in the CEO slot. Would you like to have the perfect individual who never lies, is totally competent, is a masterful strategist? Of course you would, but I have never met one of those people.

Understanding who or what your senior management is tells you how to deal with the interpersonal equation. It’s very valuable at the board level to know how senior managers (and fellow board members) will lean over the long haul:  “I think the CEO will do X, two board members will lean with him, and two could be bought off.” Knowing what you have in your critical positions or on your board of directors is very important when you get into situations that test integrity or which test the direction of your company.

Knowing what what makes executives tick is one of the benefits of a clinical approach to assessments. Assuming the executive is competent for the position and has the right quotient of integrity, over the long term, knowing what makes that person tick will give board members and senior management a winning equation.

Conventional interview-based assessments (see, for example, the Category on this blog called “Interviewing: Theory and Practice”) will screen out the bozos but won’t give an understanding of the real problems and how to fix them.

Just focusing on behaviors (which is what Marshall Goldsmith advocates) will not change the dynamics of the management team. It will not improve the performance of the team. Understanding the team dynamics is important for changing them. Just “improving” an individual executive’s behavior will not foster better organizational performance. A clinical assessment, especially if complemented by a 360-degree assessments, gets at the team and finds out what the issues are for that team. If an individual has well-camouflaged weaknesses, it will get at those too.
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Leslie Pratch, Ph.D. is a clinical psychologist with an M.B.A. in Strategy and Finance and a B.A. in Religion from Williams College. She works with boards of directors and private equity investors to select and develop executives. She can be reached at (312) 464-7919 or email her at leslie@pratchco.com or visit www.pratchco.com.

By Leslie Pratch

Now let’s turn to a clinical assessment approach. Predicting performance requires gathering information in five areas. Today we’re going to focus on one area, personality structure and dynamics. This will take us beyond interview and other self-report methods, like the Myers Briggs.

Interviews, like all self-report methods, permit canned or rehearsed responses. The questions are obvious, transparent, and easily manipulated. Most executives know what to conceal and what to reveal – about themselves, their experiences, and the depth of their commitment. They will reveal – indeed, they will highlight – what makes them look good, and conceal what does not. In my line of work, we call this “faking good.”

For example, in a job interview, we may claim to be persistent and hard working when what we really are is stubborn. In presenting ourselves, we put a spin on the stories we tell. We make our stubbornness sound like worthwhile persistence – and this is a classic example of faking good. Even the most astute interviewer will have trouble distinguishing persistence from stubbornness.

To get around the faking-good problem, one may also use projective techniques. You may have encountered them during your own careers. An example is to supply the words to finish a sentence. Another is to tell stories to describe a series of pictures, like one a boy with the violin.

Projective techniques present vague, ambiguous stimuli. By providing little structure to guide the response, they reveal aspects of psychological functioning related to underlying dimensions of personality which are inaccessible using objective techniques.

One technique designed to assess active coping asks the person to complete a series of incomplete sentences. Even executives who claim to be no-nonsense, take-charge leaders may find it difficult – if not impossible – to complete certain stems. For example, “When he failed in his work….” Take a minute and think how you would respond.

Completing the stem requires the person to mobilize energy, orient attention, and commit to make a response. If the person does not complete the stem, then he has refused to cope with the task. He has demonstrated passive coping.

Projective techniques get at underlying behaviors in ways that permit us to make inferences about how the individual will function under greater stress. They tap aspects of personality that most of us do not know or want to reveal – desires, fears, and conflicts that are disavowed or unconscious.

Executives who demonstrate active coping in structured situations (like an interview or personality inventory) may not be active copers at the deeper levels assessed by projective techniques. At the deeper level, they may be passive copers. When the measures on different levels disagree, a red flag goes up. An executive may present as an active coper but the projective measures reveal he is anything but. Under stress, this discrepancy will resolve itself in the direction of the underlying passive tendencies, compromising decision making in real life.

What this means is that desires, fears, and conflicts that are beyond conscious control nevertheless drive and shape workplace functioning. Under stress, when our defenses weaken, these warded-off parts of self are prone to appear. If an executive’s active coping rests upon passive coping, then employers run the risk of her demonstrating passive coping at a time the venture can least afford it.

Familiar signs of passive coping in normally capable executives whose functioning is breaking down under stress include paralysis in the face of major threats, uncharacteristic outbursts of rage, and over-control of subordinates.

The most predictive aspects of coping operate at levels the individual can neither identify nor control. Our assessment gets at those levels. There is no pretending, no role-playing, and no faking good. Nothing about the process allows the executive to rehearse a response or give a canned answer.

Projective techniques act as the final validity check on what an executive asserts about his or her abilities and motives. They allow us to determine whether the image he presents to the world is based on a healthy, vibrant, active coping stance, or whether it’s defensive, reactive, or compensatory, and likely to crumble when stressed.
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Leslie Pratch, Ph.D. is a clinical psychologist with an M.B.A. in Strategy and Finance and a B.A. in Religion from Williams College. She works with boards of directors and private equity investors to select and develop executives. She can be reached at (312) 464-7919 or email her at leslie@pratchco.com or visit www.pratchco.com.

By Leslie Pratch

The recent financial meltdown in the United States has starkly exposed a leadership crisis in Corporate America. How did it happen and why did so many senior executives fail so disastrously?

Failed leaders are being replaced not only in the financial sector but in all business sectors, as tight credit markets have put troubled companies like the Detroit Three and the nation’s largest financial institutions under intense scrutiny.

What can be done to improve the odds that new senior executives being recruited will perform more effectively?

There are two main ways of identifying candidates for senior management roles. Either a position is filled from within or a search firm is retained to recommend outside candidates. General Electric is an outstanding example of the first practice, as its CEOs have always come up through the ranks. A notable example of the second is the dual search mounted by Heidrick & Struggles and Spencer Stuart to find a CEO capable of restoring solvency and changing the culture at IBM. The final candidate, Lou Gerstner, became CEO in 1993 and performed brilliantly, leading IBM into the 21st century and overseeing a succession process that put Sam Palmisano in place as new CEO in 2003.

The above examples show that companies can predict an executive’s performance with a high degree of confidence. But too often, the results lead to disappointment.

Why, for example, did the performance prediction made when Heidrick recruited George Fisher to head Kodak not pan out? Fisher’s outstanding leadership at Motorola seemed to make him the ideal candidate to reposition Kodak from film-based to full-spectrum imaging technology.

• What vital information was not factored in when Kodak made its decision?

• What vital information is often lacking in the selection of an “inside” candidate?

Obviously, in an internal recruitment processes, a great deal is known about the character, capability, and performance of executives being considered for promotion. When a search firm presents candidates to clients, the firm has already interviewed prospects, done extensive reference checking, and discreetly found out as much about each candidate as the search professionals can turn up.

But neither process is adequate to predict an executive’s future performance. Measures of past performance conflate individual capability with situational factors. Too often, hiring decisions are made without disentangling an executive’s success from that of the firm where he previously worked. How an executive has performed in the past may not bear on how he will perform in the future – especially as industry and organizational conditions change.

What can boards of directors do to increase the probability that an executive’s future performance will be optimal?

Two steps are essential:

1. Determining the core integrity of the executive, in the context of an assessment of his or her whole personality; and

2. Evaluating the active coping of the executive under the widest possible range of conditions and challenges.

In the next few entries I will explain and demonstrate a method to determine the integrity and active coping of the executive in order to ensure that the executive will perform as required.
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Leslie Pratch, Ph.D. is a clinical psychologist with an M.B.A. in Strategy and Finance and a B.A. in Religion from Williams College. She works with boards of directors and private equity investors to select and develop executives. She can be reached at (312) 464-7919 or email her at leslie@pratchco.com or visit www.pratchco.com.

By Leslie Pratch

I believe most organizations want integrity in senior management. Over the longer period, integrity is demanded by the organization’s shareholders. They may say they like earnings growth, but what they really want is high integrity management teams, and companies that do what they say they will do.

You can count on high integrity management teams but you don’t just pick 20 executives and presto, you have a high integrity team. The only way to get a high integrity team is to test for it, and the way to test for it is when there is a critical situation and the individual has to make a black and white choice: “Yes I am going to go along with this or no I am not.”

Too often, executives adapt their integrity to the situation to accommodate it. That’s not the right answer. The public, the SEC, and the accounting profession are all trying to force executives not to adapt. It’s either right or it’s wrong.

The reason for having a high integrity CEO is that what he or she represents is emulated throughout the organization. If there is integrity in the CEO, employees will tend to trust the management team.

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Leslie Pratch, Ph.D. is a clinical psychologist with an M.B.A. in Strategy and Finance and a B.A. in Religion from Williams College. She works with boards of directors and private equity investors to select and develop executives. She can be reached at (312) 464-7919 or email her at leslie@pratchco.com or visit www.pratchco.com.