Chapter Two. Best Practices in Leadership Assessment

Manuel LondonJames W. SmitherThomas Diamante

In this chapter, we examine best practices in leadership assessment, with a focus on chief executive officers (CEOs) and senior executives. These executives include heads of multinational corporations, business units, or large divisions in business, government, or not-for-profit organizations; entrepreneurs who started and grew their own businesses; and executives of large or medium-sized organizations who were promoted from within or hired from outside. Our goal is to understand methods for assessing executives’ performance and potential to perform well at a more senior level of an organization.

Executive turnover poses major challenges for corporations. During the first 10 months of 2004, 516 major companies changed CEOs.[1] In the airline industry alone, all seven of the major airlines in the United States changed CEOs since September 11, 2001.[2] Surveys of management performance often find that as many as half or more leaders are not performing up to par in critical areas.[3]

As a prelude, we emphasize that leadership assessment entails measuring process and outcomes. That is, measurements should capture not only the results of a leader’s behavior and decisions but also how the leader accomplished those outcomes. Also, leadership assessment itself is a process. It can be used to track performance improvement and ongoing development. It is part of an ongoing, cyclical process ...

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