Our hominid ancestors constantly had to solve problems related to survival. They had to find food, water, shelter, and protection from predators. They also had to keep peace within the group and defend themselves and their groups against attacks by competing groups. If they did not solve these problems sufficiently, they died—whereas those who successfully managed the entire range of problems prevailed.

But the demands of survival changed constantly. Only groups that adapted and improved their survival techniques in the face of constantly shifting environmental pressures became our more recent ancestors—the ultimate winners in the race for survival.

From an ancestral point of view, critical reasoning means being able to solve a wide range of problems effectively. In a modern business context, critical reasoning, or business reasoning, involves (a) accurately forecasting sequences of events in and outside of one’s organization, (b) recognizing when those forecasts do and do not apply, and (c) making appropriate business decisions based on those forecasts.

According to Peter Drucker, PhD, the fabled management philosopher, businesses struggle because leaders make poor decisions about resource allocation. Ideally, leaders should direct money and energy toward activities that increase profitability. Instead, they often designate organizational resources toward projects that have little significance in the long term.

Directing resources toward activities that increase profitability requires three things. First, it requires a clear-minded view of the problem to be solved. Second, it requires a rational analysis of possible solutions. Finally, it requires a critical evaluation of each solution’s consequences. Leaders with good business reasoning skills (a) identify and understand critical problems, (b) construct rational solutions to these problems, and (c) act based on the anticipated consequences of each solution.

Although most people understand the importance of business reasoning for the success of an organization, new managers and executives are rarely selected based on their ability to make good decisions, according to Justin Menkes, PhD. When hiring candidates for management and executive positions, organizations need a sound, defensible method to evaluate candidates’ business reasoning skills.

That’s why the Hogan Business Reasoning Inventory (HBRI) was created. The HBRI allows organizations to fairly and accurately evaluate candidates’ business reasoning skills. The HBRI is based on three assumptions. First, it assumes that good business decisions require clear thinking, rational analysis, and critical evaluation. Second, it assumes that business reasoning skills can be measured and that the results of this measurement process can be used to evaluate candidates for managerial and executive positions. Third, it assumes that the results of this measurement process predict managerial and executive performance.

Hogan is pleased to announce that the HBRI is evolving, effective December 4, 2019. The updated HBRI provides the same overall business reasoning score as the current version, but the Tactical and Strategic subscales will be replaced with two new subscales. The new subscales measure Qualitative Reasoning, which involves working with data visualization, logic, and verbal information to solve problems, and Quantitative Reasoning, which involves working with mathematical and spatial information to solve problems.

Committed to constantly improving our assessments and products, we are confident that the new HBRI will provide a better user experience for our clients. In the modern business world, organizations that hire leaders with strong business reasoning skills will triumph.

One of the primary tasks of leadership is to effectively and efficiently allocate an organization’s resources. In business, this requires leaders to make critical decisions that ultimately determine the success or failure of the organization. However, making good business decisions alone is not enough to guarantee success. Effective leaders must also have the interpersonal skills to get along with others and build high-performing teams. Both critical reasoning skills and interpersonal skills are effective predictors of performance. Logically then, employers who care about job performance should want to know two things: do my employees make good decisions and do they have the interpersonal skills to effectively function? The best way to answer these questions is by using assessments.

Cognitive assessments, such as the Hogan Business Reasoning Inventory (HBRI), are some of the most robust predictors of job performance. Any job that requires solving problems, evaluating the consequences of various solutions, or weighing solutions against each other can benefit from cognitive assessments that accurately measure one’s critical reasoning skills. Effective critical reasoning requires three things:

1. A clear-minded view of the problem – Too often leaders spend time solving the wrong problem or problems that aren’t actually problems at all.
2. A rational analysis of possible solutions to the problem – Some solutions are bound to be more effective than others, so being able to analyze those solutions rationally and objectively is important.
3. An accurate forecast of each solution’s consequences – Some solutions may cause future problems, so the cost and impact of the various solutions must be considered.

Using cognitive assessments to measure job candidates across these three core areas tells us how a person will go about making decisions and whether they will be effective in doing so. However, cognitive assessments don’t give us a full picture of how someone is going to work in a modern collaborative workplace. That’s where personality assessments come into play.

Personality assessments give us valuable insights into an individual’s day-to-day behavior. Using scientific assessments like the Hogan Personality Inventory (HPI), the Hogan Development Survey (HDS), and the Motives, Values, Preferences Inventory (MVPI), employers get answers to three key questions about the individual:

1. How will they perform when they are at their best?
2. What behaviors will derail their chances of success?
3. What motivates and drives them?

The answers to these questions are critical when determining if someone is a good fit for a particular job. A job candidate can possess the desired interpersonal skills to perform the job, but they won’t be happy if their core values don’t match the values of the organization. On the other hand, someone can be a perfect match for an organization from a values standpoint but lack the interpersonal skills that lead to success in that role.

Cognitive assessments and personality assessments measure two different things, and that’s good news for employers. This means that both cognitive and personality assessments add useful information about potential job candidates with little redundancy. By assessing job candidates in terms of both their decision-making and interpersonal skill, hiring managers give themselves the best chance at hiring high-performers.