Our friends at metaBeratung, an authorized Hogan distributor in Germany and Switzerland, recently hosted events in Zurich and Munich, featuring Hogan Founder and Chairman Dr. Robert Hogan, Hogan CEO Dr. Scott Gregory, IMD Business School Professor John Weeks, and metaBeratung CEO Nicole Neubauer.

The events, titled ‘Future of Leadership: From Charisma to Humility,’ were held at Hotel Widder in Zurich on July 2and at Hotel Bayerischer Hof in Munich on July 3, and the events were attended by more than 140 business leaders and talent management professionals in Zurich and more than 70 in Munich.

With humility being the core theme of the events, Dr. Hogan spoke about the importance of identifying and promoting humble leaders, as opposed to their charismatic, and likely ineffective, counterparts. Organizations for decades have heavily leaned toward the promotion of charismatic leaders because they are socially and politically skilled. However, Hogan’s research on leadership shows that although these leaders tend to emerge within organizations, they historically are less effective than humble leaders.

Professor Weeks spoke to attendees about how leaders should act as role models with a positive, skillful, and intentional approach to engaging their teams. This heavily relies on leaders following the age-old adage “actions speak louder than words.”

Neubauer’s presentation focused on the topic of women in leadership. With research showing that women tend to be more humble than men, she highlighted how important it is for women to become more visible within their organizations. Simply put, equality between men and women in organizations is something that does not exist and is in desperate need of improvement.

Overall, the events were a huge success for metaBeratung, IMD Business School, and Hogan. It’s so exciting to see the work our distributors are doing globally to raise awareness about the importance of personality and how it affects leadership and organizational performance.

The success of any organization depends on the people who work in it. Therefore, it is crucial for businesses to hire the right employees. Using valid assessment tools such as General Employability, companies can more easily identify the personality characteristics that predict employability across a wide range of jobs. In turn, businesses are more productive, have less turnover, have more satisfied and engaged employees, and are more financially successful.

Employability is defined as the ability to find a job, the ability to retain it, and the ability to find a new job should the first one go away. There are three key components of employability that the assessment considers:

• People Skills – Getting along well with others and working well in teams. People who score high on this skill seem friendly, pleasant, and helpful.

• Learning Skills – Learning the essential functions of the job and acquiring new skills as the job changes over time. Individuals with learning skills are likely to be bright, curious, and motivated to learn.

• Work Ethic – Taking instruction, working hard, and producing high-quality results in a timely fashion. Employees with good work ethic are hardworking, productive, and dependable.

Gathering responses to items such as “I am sensitive to others’ feelings” and ”I avoid trouble at all costs,” the assessment provides a general employability score. The overall score reflects the degree to which the candidate is generally employable and likely to be a productive employee. Those with exceptionally high scores (e.g., 90% or above) can often be hired straight away assuming they meet other basic job qualifications.

The General Employability assessment is an accurate predictor of on-the-job performance. It is suitable for a wide variety of non-leadership roles in virtually all industries. For instance, it is highly effective in the recruitment of bank tellers. With the General Employability tool, recruiters were able to accurately identify low and high performing bank tellers. Further, they found that the high scorers were two times more likely to be highly rated for their customer service than low scorers.

Zsolt Feher, Managing Director Europe of Hogan Assessments said “Employers report that most of their employee-related complaints concern three basic problems: poor interpersonal skills, poor personal management, and poor problem-solving skills. With General Employability, organizations will be able to obtain valuable insights into these three key areas. It is a huge time-saver for recruiters as they can leverage the power of data and predict candidates’ work ability and future success in the workplace.”  

I have just returned from another fantastic voyage to the East. And since this e-postcard has only so much room to spare, I’ll cut right to the chase. It was my absolute pleasure traveling to and across Australia as I accompanied Peter Berry Consultancy (Hogan’s premier distributor) for their 2019 Thought Leadership Forum. This series of events featured the Australian Psychological Society’s biannual I/O Psychology Conference (IOP) as a capstone, of which PBC continues to be the sole platinum sponsor.

The following was just some of my report from the antipodes:

• The PBC Hogan User conferences in Sydney, Melbourne and Adelaide were each a huge success. With legendary style, Peter Berry, Managing Director and Shayne Nealon, Managing Partner of PBC delivered presentations on client case studies and the latest innovations on the Hogan 360. A special highlight was when an executive from Australia’s national cricket team gave a ripper presentation on their usage of Hogan and the benefits it has brought to the organization. Public and private sector executives, academics, consultants and coaches were all in attendance.

• Dr. Geoff Trickey, founder of Hogan’s elite UK distributor PCL, not only presented on his well-researched Risk Type Compass (a metric for measuring risk appetite and the behaviors associated with eight different risk orientations), he also won “Best Paper” at the IOP event for a related study. Go Geoff!

• Speaking of IOP, the well-oiled machine that is the PBC team captivated several audiences across the conference halls with their engaging talent management topics:
  
  • Mark Do: Contemporary trends in personality and leadership assessment: Where are we now and where are we headed
  • Adrien Chew: Observed leadership behavior around the world: Exploring reputational differences of leaders across countries using 360s.
  • Kalani Koswatta Liyanage: What makes an effective leader? The impact of gender and personality on perceived leadership effectiveness.
  • Dr. Lynne Cruickshank: (1) Personality and High Performing Teams: Examining the relationship between personality and team performance. / (2) Engaging a Multi-Generational Workforce: Investigating differences in Values and Personality.

• I’d also like to take a moment here to state my gratitude to Hogan’s Drs. Darin Nei and Brandon Ferrell, and PBC’s Dr. Lynne Cruickshank for their invaluable contributions as co-authors on a cross cultural paper featuring the Hogan360 (a topic which was also presented across the events). It was recently accepted by a peer-reviewed journal for publication. Congratulations you three! More to come on that soon…

If you didn’t get a chance to join and want to know more about these highly interesting topics, please contact a PBC consultant for more information related to any of the above. They are always happy to oblige. Wait…did you not know any of this was happening? You must not be on the PBC Newsletter. I highly suggest you enroll!

Well, until next time my friends,

Your devoted Asia Pacific correspondent, resident blogger, and current Hogan Senior Strategist,

Michael Sanger

Hogan distributor, RELEVANT Managementberatung, has partnered with the International Coach Federation Germany chapter to present this year´s German Prism Award, awarded to companies making a difference in the coaching community through professionalism, quality, and data.

The selection process and criteria were modeled after ICF’s International Prism Award, which has been granted annually since 2005 to companies that stand out through the establishment of a coaching culture with extraordinary results in difficult change processes. Past winners of this prestigious award include Coca Cola, SAP, Airbus, and several other prominent companies.

“Continuing our partnership with the ICF to present the German Prism Award after a great start in 2018 is a perfect opportunity for us,” says RELEVANT owner, Dr. René Kusch. “At RELEVANT, we are fully committed to advancing the coaching profession, and this award is symbolic of that commitment.”

Those nominated are coaching programs that have innovative concepts and/or have made a significant contribution to achieving important corporate goals. The award will be presented on November 15 during ICF Germany’s Coaching Day in Munich, and applications will be accepted through July 16.

“We look forward to a long and prosperous relationship with ICF Germany for many years to come,” says Kusch. “The ICF is the world’s premier coaching organization, and it is an honor to be involved of something we believe will be a high-profile distinction for German coaching programs in the future.”

Infelligent Coaching & Consulting, Hogan’s distributor in Taiwan, hosted a “Refresh Mindset for Leadership Forum,” on April 12. Their audience of nearly 100 guests was comprised of many distinguished corporate leaders. Ken Sun, General Manager of Microsoft Taiwan, and Enid Tsai, General Manager of Hiwin Technology, shared their success stories based on Hogan related concepts. Abby Hsieh, Managing Director of Ogilvy Group Taiwan acted as the moderator.

In his opening remarks, Jim Hwang, General Manager of Infelligent, shared insights on transforming talent selection strategies. Based on Hogan’s research on Humility and Emergence vs Effectiveness, he suggested that corporations should not identify talent only based on performance approval, likability and willingness – these are common traits we often find in charismatic people who are not necessarily effective leaders. Studies show humble people make the effort to develop teamwork and help others; they focus more on team success rather than personal glory. Identifying high potential candidates with scientific assessments like the Hogan assessments, differentiates emergent leadership (generated by charisma) and effective leadership (generated by humility) and finds the leaders who are focused on building effective teams; who invites new ideas and feedback; who are willing to admit mistakes; and who gives credit to the teams and colleagues.

Ken Sun shared how Hogan’s concept of “Leadership Effectiveness” was also one of the keys to Microsoft’s comeback. When Satya Nadella took on the role of CEO at Microsoft, the quiet, humble, and disciplined leader set out to create a culture of “growth mindset” and followed this up with several innovative measures. He successfully reignited the employees’ passion and energy, built up a style of open communication, and completely transformed Microsoft, bringing it back to the leading position in the market.  

Enid Tsai shared about a similar successful transformation that took place at Hiwin Technology. This traditional automated device manufacturer refreshed its culture and explored new applications for these devices. Hiwin achieved global recognition with endless innovative projects such as “The Sound of Blooming,” installation – the world’s largest mechanical flower at Taichung Flora Expo and also a “Smart Coffee Shop”.

These organizations’ leaders worked hard to change the employee mindset, and this drove organizational transformation. When the new values and culture become part of an organization, engagement and inclusivity grows, and innovation grows too. Using scientific, unbiased tools like Hogan, to be able to effectively select leaders who can drive this transformation is key in the entire process.

The event concluded with a dialogue between these distinguished leaders. All of them agreed an organization’s culture is one of the keys to its transformation. A leader’s style directly impacts the culture. Humility in leaders with growth mindset opens the mind to innovation and learning and creates a culture that creates possibilities, and will drive the organizations ahead to the future. Hogan Research has studied humility extensively, and continues to explore its impact on global leadership.

Advanced People Strategies (APS), authorized Hogan distributors for the UK, has once again, teamed up with Corporate Research Forum (CRF) to explore the implications of Digital Disruption for leaders and leadership development.

We live in an era of digital disruption, characterized by the rise of digital technology, the emergence of new competitors, reshaping of traditional industry rules and boundaries, which brings with it an accelerating pace of change and increasing complexity. For organizations, future success and business sustainability rely on the ability to adapt to these changes. To succeed in this new economy, organizations are having to build the capacity for fast innovation underpinned by:  

• Agility: The ability to anticipate changing market conditions and adjust quickly.
• Rapid decision making and prototyping through collaborative team working.
• A culture of curiosity, experimentation, and learning.
• A tolerance for risk.
• Pragmatic vision and the skill to devise corresponding objectives, boundary parameters, key results, and metrics that matter.

Leaders need to both develop these capabilities themselves and foster them within their organization. In short, leadership must evolve in response to the changing context. 

The research report explores the implications of the Digital Age specifically for leadership and leadership development. We examine how the role and expectations of leaders are changing in the Digital Age and review the implications of these changes for leadership development practices. 

Interested to read the report? Contact APS today!

*This post was authored by the Corporate Research Forum.

Hogan was honored to host a special event on May 21 featuring Stanford University Professor Michal Kosinski, a world-renowned data scientist and psychologist.

Remember Cambridge Analytica? You know, the political consulting firm that mined personal data from Facebook users without their consent to influence the 2016 Presidential Election? Well, Kosinski was the data scientist who first demonstrated one’s Facebook “likes” can predict their personality better than friends or family.

Kosinski had been warning the public of the risks and challenges brought by the digital revolution long before Cambridge Analytica’s inception, and he turned down an opportunity to work with the organization because of the legal and ethical implications that were inevitably to follow. Since then, his research has been brought to the forefront, including a cover story for The Economist, an interview with Fareed Zakaria to discuss the role of big data in the 2016 election, and he authored an op-ed in the New York Times about how Facebook sells data despite its claims.

Here’s the full-length video of Kosinski’s presentation in Tulsa:

Have you ever taken a Buzzfeed quiz to tell you what Harry Potter house you’re in? Or maybe what character from The Office you are most like? How much weight do you put on the results of those quizzes? Would you want companies making hiring decisions based on similar assessments?

In March, Hogan Senior Research Consultant Karen Fuhrmeister gave a TEDx Talk at the University of Tulsa on “The Science Behind Hiring Assessments: It’s Not a Waste of Time.” The talk aimed to inform students and other attendees about the use of personality assessments in the workplace, and how this trend isn’t going away any time soon. In fact, it’s becoming more and more likely that those going through the interviews will be asked to take one of these assessments.

In this TEDx Talk, Karen explains why these assessments are important to both the organization and the individual, and not just a waste of time.

In the final analysis, business is about money and people. By definition, successful private equity firms understand finance, but on average they tend to be less sophisticated about people issues. This makes sense: deal partners and analysts are trained in finance and are good at spotting undervalued assets. But savvy private equity players also understand that reviving an underperforming business depends to a large degree on people issues—in particular, it depends on the leadership of the portfolio company and its working relationship with new ownership.

Considerable evidence suggests that PE firms could do a better job evaluating the ability of the leadership team in their acquired companies. A recent survey by Alix Partners found that nearly three-quarters of portfolio company CEOs are removed during the investment life cycle. Over half are replaced in the first two years; but only 15% are replaced at the outset. These data suggest that, for 4 out of the 5 replaced CEOs, the decision takes too long, thereby delaying strategic milestones and prolonging the hold time.

PE firms can more quickly realize returns on their investments if they analyze the leadership of the companies they acquire with the same rigor that they analyze the business fundamentals during the diligence phase. The good news is that there is a science to analyzing people and the same discipline that is used to identify untapped business value can be used to evaluate the leadership potential of CEO candidates.

Barking up the Wrong Tree

In our experience working with PE firms, the conventional wisdom regarding what to look for in portfolio company CEOs can be misleading. People assume that brains and experience are crucial. But it turns out that IQ and prior industry and CEO experience do not predict the ability to lead through a profitable exit. For instance, a recent survey of managing partners at 32 PE firms (including Blackstone, KKR, and Carlyle) revealed that experience as  a CEO in a publicly traded firm does not prepare people for success in the intense PE environment. The data also showed prior industry experience predicts the tendency to run the same playbook rather than driving radical change typically required.

The experience factors associated with successful leadership of a portfolio company include having worked in a PE environment and having previously performed a similar transformation. This doesn’t necessarily mean having been a portfolio company CEO before; having held a big job in a PE environment is enough to appreciate the pace, the sense of urgency, and the need to be in close communication with ownership about everything from strategic direction to performance details. And a track record of having performed the same task successfully—whether that be cutting costs, growing revenues, managing debt, raising capital, going digital, expanding channels, or what have you—bodes well for doing it again and quickly. 

Soft Skills Make the Difference

Beyond PE experience and task experience, the factors that best predict the ability of CEOs to lead to a successful exit are found more on the soft side than the hard side. And this is where it can be challenging for financial experts: understanding people is different from understanding balance sheets. However, people differ in certain regular and quantifiable ways and research has shown which differences make a difference when leading a portfolio company. They fall into two general categories.

The first category contains the personal factors common to most successful PE CEOs. They include:

• The ability to build and lead a high-performing team with complementary strengths
• A tough-minded temperament with a sense of urgency
• Resilience—the ability to recover from the inevitable setbacks
• The willingness to admit problems and face difficult realities without spinning or sugarcoating them

PE environments usually have limited resources, which points to the need for versatile chiefs with a broad range of expertise and skills. But versatility is a rare commodity. Less than 10% of senior leaders are able to consult with their staff in decision making while still being able to act acting decisively, or pay attention to the big picture while also attending to the day-to-day details. Successful portfolio CEOs need to be able to recognize their limitations and staff accordingly; they also need humility in order to turn their staff loose. It’s a complex set of capabilities, which accounts for the staggering number of CEOs who are replaced.

The second category of differences concern the chemistry between the CEO and PE ownership. The big issue concerns compatibility: can the CEO and primary deal partner agree on performance expectations, communication cadence and content, and other, often unspoken, rules of engagement? This is about far more than “liking” each other; it more about mutual respect and trust. Establishing a short-hand vocabulary, sharing values, and minimizing surprises is very important in a fast-paced, pressure-cooker environment.

The Science of Personality

Many people tend to think that personality tests are on-line questionnaires or magazine quizzes designed to tell them about their “type,” “color,” or the house at the Hogwarts School of Witchcraft and Wizardry into which they would best fit. However, there is a science of personality assessment based on research going back over 100 years. It isn’t rocket science, it’s behavioral science—and it leads to solid, dependable results. The evidence is clear that personality assessment powerfully predicts real life behavior; hundreds of studies with hundreds of thousands of working adults show that competently constructed personality measures predict performance with surprising accuracy. Properly validated personality measures predict job performance, career success, and leadership better than any known alternative, including IQ.  Personality is stronger than Viagra: the correlation between personality and leadership is stronger than the correlation between Viagra use and improved sexual functioning.

Moreover, well-designed personality assessments can forecast an individual’s ability to build a team, make tough calls, handle pressure, and be candid, flexible, and humble. Being able to penetrate the veil of self-presentation is important because sitting CEOs are likely to be on their best behavior during the courtship phase of an acquisition. There is a big difference between people at their best—what we call “the bright side” of personality —and people under sustained pressure when you see their “dark side”—the behavioral tendencies that derail teams and careers.  For example, over time confidence can turn into arrogance, collaboration morphs into appeasement, and passion and a sense of urgency turn into erratic tantrums. Personality testing is especially useful when evaluating possible replacement candidates, because you will often have little direct exposure to the person yourself and smart people can conceal their dark sides for short periods of time.

Personality testing is also effective at determining the compatibility between people. It’s the basic theory and measurement system behind successful online dating platforms, and it can also be applied effectively to working relationships. In addition to predicting how well two peoples’ interpersonal, thinking, and communication styles will mesh, personality assessment can also predict how people are likely to rub each other the wrong way and push each other’s hot buttons. Perhaps most importantly, a comprehensive personality assessment that includes core values can identify whether people are aligned in what they really want—versus likely to be working at cross purposes. In a PE context, for example, it is vital that the CEO and the primary deal partner agree about core values—i.e., about the relative importance of money, status, fame, relationships, and pleasure.

Managing Risk on the People Side

Assessing the personalities of CEOs and their leadership teams should be a routine part of doing diligence on a potential acquisition company. On the one hand, evaluations of the leaders’ work histories can indicate whether they understand the pressures of PE environments and if they know how to execute the sorts of changes needed to realize value. This tells you whether people can do the job on paper. Similarly, personality assessment will provide a sense of what it would be like to work with them—how they will do the job once in office, what it will be like to have them in your life. It is interesting to note that most failures of leadership are less about a deficiency in what they know and more about how they prioritize time, focus attention, and interact with key people. And the most important interaction of all is between the CEO and the primary deal partner; with so much at stake, it’s best to understand how this relationship will work at the start, including how it could go wrong and how to manage it when things get tense.

*This post was co-authored by Robert Hogan and Rob Kaiser, and was originally published by Hunt Scanlon Media.

The Hogan team recently hosted Dr. Adrian Furnham at its global headquarters in Tulsa for a special visit. As one of leading personality psychologists in the world, Furnham has a been a vocal advocate of using Hogan for decades. He regularly points to Hogan in media interviews and articles as the most accurate predictor of workplace performance in the world, and he also was a key figure in the 2014 documentary, The Science of Personality.

As part of his visit, Dr. Furnham delivered a special presentation to the Hogan team highlighting the research he’s been doing. Here’s the full-length version of his talk: