How to Avoid an Ugly Mess

 

 

How to Avoid an Ugly Mess

By Leslie S. Pratch

Not every management assessment is the same. Picking the right assessment approach could mean the difference between having an outstanding investment return and having to explain an ugly mess to your partners. Different options answer different questions, so you need to figure out what you most want to learn.

What you might like to know

Has he done it before?

This question is good to ask when you know what you want and are sure it isn’t going to change. A good way to answer this question is with a talent and skill assessment. Search firms, many assessment firms, and many psychologists focus on past achievements. They document if the “candidate has done it before in a compelling fashion”. Typically, they use behavioural interviewing to understand how and when the candidate has “done it before”.

If you plan to exit the deal in three to five years, and know that the company won’t change and the world won’t change in that interim, and that there will be no unexpected opportunities and no unexpected problems, then this could be a good approach — for your needs.

How will he cope with change?

Will he capitalise on opportunity? Can he do something no one has ever done? How much do you care about how well the candidate will perform under new or unexpected conditions? You can pick someone who seems like he fits the bill but the world changes for better or worse. When it changes for the worse, you see how adaptable he is. But you may not know when it changes for the better, because the executive doesn’t take advantage of the change until the competition does.

In faster-moving or more uncertain markets, expecting the unexpected makes sense. You need someone with skills but ability to cope — which requires raw cognitive capability and a stable information-seeking personality much more than specific pre-defined skills — is also critical. Talent and skill assessments don’t address these at all. An approach aimed at understanding active coping capabilities as they will be needed for the business challenge fits well here.

How can you get the most of the executive?

Sometimes a candidate brings a lot but isn’t perfect. That introduces the other party in the interaction — you. How can you act so you capitalise on the executive’s strengths and proactively protect against his weaknesses as a leader? Talent and skill assessments won’t shed any light here; Pratchco’s approach to understanding personality as part of the assessment will.

How will he cope in a private equity environment?

The pace is fast and CEOs have to cope with having investors challenging their thinking. If they’ve been in a private equity environment in the past and you know the investors they worked with before, a talent assessment is adequate. If they’ve never been in a private equity environment or you don’t know the other investors, you should use Pratchco.

Are incumbents worth keeping, even though the strategy is changing?

You are inheriting a management team. They know the business and losing them would be a big loss. But they haven’t done what is being called for next, even if they thought of it (similar to founders’ problem with startup), so they will all fail a simple talent assessment. But they might very well be keeping if you could supplement them with your skills or add a team member at the right time. If you assume they can’t do it, you will have to hire a new team, which will lack the understanding of the company the original team had.

What’s in it for the executive?

Executives don’t generally relish the opportunity to be assessed. Putting them through a painful assessment that provides no value to them won’t be a great way to start a relationship and might even be a way to end one.

Talent and skill assessments document what the executive says and usually provide no value to the executive. Assessments that find underlying themes can help executives understand themselves better and can provide guidance that the executives can use to improve how they interact with others (including but not limited to you).


A version of this post appeared in The European Financial Review

About the Author

Leslie S. Pratch is the founder and CEO of Pratch & Company. A clinical psychologist and MBA, she advises private equity investors, management committees and Boards of Directors of public and privately held companies whether the executives being considered to lead companies possess the psychological resources and personality strengths needed to succeed. In her recently published book, Looks Good on Paper? (Columbia University Press, 2014), she shares insights from more than twenty years of executive evaluations and offers an empirically based approach to identify executives who will be effective within organisations — and to flag those who will ultimately very likely fail — by evaluating aspects of personality and character that are hidden beneath the surface.

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Article Examines Cognitive Maturation and Leadership

A licensed clinical psychologist and graduate of both the University of Chicago Booth School of Business and the Northwestern University Medical School, Leslie Pratch has written extensively on matters related to business leadership. In her paper “Tape Measure for a Job Fitting: Introduction to Stratified Systems Theory,” Leslie Pratch discusses the importance of cognitive development as it impacts managerial capability. Below is an excerpt.

“So far, we’ve described a static system. Individuals have a certain level of cognitive power. A job requires a person to have a certain level. Everybody is either at the right level, too high, or too low. But in fact, the system is not static. For one thing, jobs change. […] More importantly, people change. Cognitive power changes over time. Obviously, the person who is able to run a division was not born with that ability. [Social scientist Elliott] Jaques found that individual’s paths of development follow trajectories within distinct bands, which he called modes. […]

This growth proceeds gradually, as physical growth does, but the passages from one cognitive level to the next occur in discontinuities or spurts. When they occur, the individual’s time horizon increases so that he becomes capable of handling more responsibility in a job with a greater time span at a higher organizational stratum.

A person’s developmental trajectory brings him or her to certain levels by certain ages. This is why we can’t learn a higher cognitive mechanism by study or practice. As with puberty or old age, we have to reach it when the time comes.”

Williams College

By Leslie Pratch, PhD

One of America’s oldest schools, Williams College was founded in 1793. Dedicated to its enrollees, the Williamstown, Massachusetts, institution offers financial aid plans for international applicants and strives to meet all of its admitted students’ financial needs for four years.

Featuring a 7:1 student:faculty ratio, Williams College divides its offerings into three main options: language and the arts, social studies, and science and mathematics. Between these categories, pupils can choose from thirty-six different majors. The more than 2,000 undergraduates currently enrolled in this school will join an alumni association of over 28,000 people who are involved in a variety of fields.

Moreover, the school possesses an active athletics department. The Williams College Ephs men’s and women’s teams participate in baseball, basketball, tennis, wrestling, track and field, and numerous other sports.

About the Author:
A licensed clinical psychologist, Leslie Pratch, PhD, focuses on active coping, and has presented on using clinical psychology to predict success in business. Before starting her career, Dr. Pratch attended Williams College and garnered a BA in Religion. Today, she remains active with her former school by assisting with its alumni fundraising efforts.