Leadership audit: assessing and developing executives

A leadership audit does not look at executives in isolation but in the context of the organisation in which they work. The frame of observation for this connects two sides: the people and the systems of an organisation. Both sit under the umbrella of the strategy and are shaped by the Cultributes, i.e. the characteristics of the corporate culture that determine behaviour in the organisation.

On the people side, the focus is on competencies, potential, performance capacity, attitude and character, principles and values, and personal disposition. On the systems side are processes, routines, programmes, frames of observation, evaluation grids and procedures. The interplay of people and systems is how an organisation acts.

This action corresponds on the other side to its impact: performance. It shows in results such as revenue, earnings, contribution margin, market share, innovation and customer satisfaction. Just as the strategy is meant to lead to results, the action of people and systems leads to impact.

The basis for effective executive development is company-specific requirements profiles. Four considerations underpin this approach.

First, every organisation has its own success parameters and its own requirements for a function. Standard norm samples cannot take these particularities into account.

Second, knowledge of the specific requirements is the basis for judging whether or not a person fits the function and the company.

Third, the aim of leadership audits is to identify the strengths and development opportunities of executives. They form the basis for individual development.

Fourth, organisational and personal learning need to be interlinked in a learning architecture. This is the only way to secure the desired effect.

Personality is the foundation for behaviour, competencies and performance. These four levels build on one another.

Personality is stable after puberty and not observable. It can, however, be validly determined at the levels of potential, risk factors and motivators.

Behaviour is shaped by hereditary disposition, socialisation and personal learning. Under stress, during major changes and when poorly suited to a task, people display behaviours without paying attention to their public image. Behaviour is therefore observable in context.

Competencies comprise attitude, knowledge, motivation and ability. Depending on personality, they can be learned well or less well and quickly. Competencies are position-related and observable.

Finally, performance is the result of the interplay between personality, behaviour and competencies. It, too, is observable.

An essential basis for the leadership audit is a job profile. It consists of three elements that build on one another.

The first element is the function description. It is derived from the vision of the future and the strategy and describes the purpose, goals, main tasks, decisions, responsibility, authorities and the internal and external interfaces of the function.

The second element is the professional requirements profile, which is based on the function description. It covers the competencies with attitude, knowledge, motivation and ability, as well as experience, qualifications, proven successes and knock-out criteria.

The third element is the personality requirements, which are also derived from the function description. They include cognitive ability in the verbal, numerical and figural domains, motivators and values, risk factors, the desired leadership behaviour and, here too, knock-out criteria.

The leadership audit is a method for assessing leadership competencies that is carried out as 180- or 360-degree feedback. The assessment of an executive can be viewed from three perspectives.

The first perspective is the competencies, 67 or 38 in the model. Competencies are available knowledge, motivation, and the skills and abilities that enable a person to achieve a certain level of performance.

The second perspective is 19 career derailers. These are behaviours that can end a career or professional path prematurely.

The third perspective is 10 performance dimensions. Performance is the quantitatively measurable or qualitatively describable output of a person, with competence and potential leading to performance. All three observation points together yield a target/actual comparison with the requirements profile.

The process begins with the selection of feedback providers by the superior and the candidate. At least one superior, three employees and three colleagues take part, optionally also customers. The candidate's self-assessment and the feedback providers' assessments are then gathered in workshops of three hours each with up to ten people.

A report is prepared from the results. It is first handed over to the candidate, for which one hour is planned, and then, in a further hour, to the superior. The process concludes with a two-hour moderated feedback meeting with the candidate and the superior.

Competencies are understood as the attitude and the available knowledge, motivation and ability that enable employees to achieve a certain level of performance. The competency model of the leadership audit is based on this definition.

The competency model serves several purposes. It is used to determine the strategic leadership competencies on the basis of the organisation's challenges. At the same time, it identifies the leadership competencies that are significantly associated with high performance in the company.

In recruiting, it can be used to assess candidates. For executives in the company, it enables self-assessment and assessment by others of their strengths and development opportunities.

On this basis, targeted personnel development becomes possible for all competencies identified as development opportunities. Individual, research-based and proven development plans are drawn up for this purpose. Its use ranges from self-assessment to full 360° feedback.

The report of a leadership audit assigns the competencies to six factors: strategic skills, operating skills, courage, energy and drive, organisational positioning skills, and personal and interpersonal skills. Within the factors, the competencies are grouped into clusters.

Strategic skills include understanding the business, making complex decisions, and creativity and innovation. Operating skills cover keeping on point, being organised, getting work done through others and managing work processes. Courage includes dealing with trouble and making tough people calls; energy and drive covers focusing on the bottom line.

Organisational positioning skills comprise being organisationally savvy, communicating effectively and managing up. Personal and interpersonal skills include relating skills, caring about others, managing diverse relationships, inspiring others, acting with honour and character, being open and receptive, demonstrating personal flexibility, and balancing work and life.

In the relative assessment, candidates and feedback providers are asked to sort the 67 competencies into five levels according to a fixed distribution: 10 competencies as an outstanding strength, 12 as talented, 23 as well developed, 12 as less developed and 10 as a serious problem.

The report presents the results per cluster on a scale from 1 to 5. Shown side by side are the superior's assessment, the average of the colleagues, the average of the employees and the self-assessment. This makes visible where self-image and the image held by others match and where they diverge.

In addition, a competency profile shows the assessment by others for selected competencies, such as business acumen, customer focus, dealing with ambiguity, decision quality, drive for results, perspective, planning, priority setting, problem solving, process management, sizing up people and strategic agility. The degree of fulfilment of each competency is shown as an index and compared with the maximum possible value and with index 100.

Career derailers are behaviours that can end a career or professional path prematurely. How strongly they take effect depends on the respective corporate culture. The report assigns the career derailers to two factors: problems with people and problems with results.

The example of problems with people illustrates the structure. The cluster “Does not get along well with others” comprises inability to adapt to change, blocked personal learning, defensiveness and insensitivity to others. The cluster “Self-centred” includes overly ambitious behaviour, arrogance, betrayal of trust, lack of composure, lack of ethics and values, and political missteps. The cluster “Does not inspire or build talent” comprises failure to build a team, failure to staff effectively and overmanaging.

For each career derailer, the report shows the self-assessment and the assessment by others: the scores of the individual superiors, colleagues and employees, the averages per group, the overall average and the self-assessment.

Candidates must sort the 19 items according to a fixed distribution: 6 as “would not describe”, 7 as “could describe” and 6 as “would describe”. They are therefore not free in their assessment. Feedback providers, by contrast, assess without any requirements.

Performance is the quantitatively measurable or qualitatively describable output of employees, with competence and potential leading to performance. In the overview, this includes output volume, output quality, adherence to deadlines, cost/benefit management, resource allocation, contributions to continuous improvement, and results such as revenue, contribution margin, sales volume, costs or unit numbers.

In the leadership audit, performance is assessed in ten dimensions: quantity of work output, timely completion of work output, quality of work output, use of resources, customer benefit and added value, ability to work independently, contribution to the team or organisational unit, productivity of working methods, acquiring skills and abilities, and alignment and compliance in the sense of “doing what you say”.

Candidates and feedback providers are asked to rate these ten dimensions in comparison with colleagues in an open assessment. The scale ranges from 5 “outstanding strength” to 1 “serious problem”. Unlike for competencies and career derailers, there is no fixed distribution here.

The report places the ratings of each feedback group side by side and summarises how many ratings fall on pronounced strengths or strengths, on medium level and on weaknesses or pronounced weaknesses, each as a number and as a percentage. Together with the competencies and career derailers, this produces the overall picture for the target/actual comparison.

The leadership audit is embedded in a systemic understanding of consulting based on systemic organisation theory. Three features characterise it.

The consulting approach takes into account the high dynamics and self-referentiality of organisations. It takes up the resistance that change meets and recognises that actors in organisations do not only pursue organisational goals.

The independence of the consulting ensures that the blind spots of focused industry experts are not brought in. It makes it possible to contribute many perspectives and experiences from other industries, creates new insights and allows previously unknown possibilities to be developed. Industry-specific specialist consultants, by contrast, always give similar recommendations; otherwise they would not live up to their claim to objectivity. As a result, this tends to intensify competition.

For the collaboration, the following applies: all working sessions are moderated and all results are documented in the consulting setting. Each working session ends with minutes accepted by everyone present. Each setting is reflected on and evaluated and feeds into the next preparation.