Why top companies are sending their CEO candidates to the psychologist

One woman sees if she’s got what it takes to land the top job

Active human brain

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About half an hour into my session with industrial psychologist Pamela Ennis, she performs a neat trick. As part of my leadership assessment, I’ve been walking her through my CV; as we reach 2001, when I returned to Toronto after a job in California, she suddenly asks: What leadership training do I think I would most benefit from?

“Making presentations,” I say. I generally recoil from stages and speaker panels.

Ennis flips back through the legal pad on which she’s been scribbling and points to the note she had written at the top of the first page. I feel vaguely disappointed at being such an open book. But her point goes beyond my avoidance of the spotlight. There comes a time in a career, she explains, when further advancement becomes more dependent on how others perceive you than on your actual performance. I tend to be a “story­teller,” she says (a reference, I assume, to my rambling career summary). “You have to project yourself with greater forcefulness, presence and gravitas, or others might underestimate your considerable abilities.”

Sounds like a polite way of saying that I don’t impress—an inauspicious sign for my leadership prospects, the feasibility of which I’m here to assess.

A legion of Canadian corporations recently acquired new CEOs: Guy Laurence joined Rogers (which owns this magazine) last December, one month after BlackBerry brought in turnaround artist John Chen to fix its ailing smartphone business; at TD Bank, Bharat Masrani spent a year (some might say his entire career) preparing to take over for Ed Clark, while across the street at CIBC, internal candidate Victor Dodig was given just six weeks before he replaced Gerald McCaughey. Odds are, each of these executives at some point underwent a leadership evaluation—a combination of interviews and psychometric tests, typically conducted by industrial-organizational psychologists, to gauge candidates’ behavioural, cognitive and personality traits. I began to wonder: What can a management shrink glean that’s not revealed through standard HR vetting? More important, what qualifies as CEO material these days—and do I have it?

Filling a C-suite is a risky and expensive exercise, in search fees and the board’s time, as well as in subsequent on-boarding and business disruption. A mistake multiplies those costs. An analysis by New York HR consultant Nat Stoddard pegs the price of a CEO mis-hire at a large-cap company at more than US$50 million, based not only on salary and severance outlay but also factors like lost productivity and opportunities. It takes more than a year, on average, to remove a CEO dud. Turnover in the C-suite is at a historical high—Forbes estimates CEO tenure at the largest U.S. companies to be less than five years—so it’s no surprise organizations are increasingly tapping psychological assessments for insights before making selections. A study by Aberdeen Group in Boston found that almost three-quarters of the 516 companies the firm polled incorporate such assessments into the hiring process. “While recommendations go a long way, a lot of that information is provided qualitatively and may be based on the fact the person has clout,” says Zach Lahey, an Aberdeen analyst.

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Many executives go through the process several times over their careers, starting when they first show leadership potential, then as they apply for increasingly senior positions. The Ontario Teachers’ Pension Plan, for example, started using leadership assessments a couple of years ago to help pinpoint areas where senior staff need improvement and to verify impressions of outside candidates. “We’re in an intellectual capital business, and it has a lot to do with people’s ability to fit into certain jobs,” says CEO Ron Mock. While an executive may have successfully led a team of self-motivated portfolio managers, the traits that made the person effective may not translate into a higher-level strategy-setting role. “The thinking in this field [industrial psychology] has advanced quite a long way,” says Mock, “especially in assessing people’s future potential and their ability to change and adapt.”

By the time a CEO candidate is subjected to a psych assessment, he or she has been thoroughly vetted and is assumed to possess the functional expertise to do the job. At that point, it’s about fit. Say the company’s heir apparent is being passed over but will remain on the executive team: Which of the two final candidates can best finesse that situation? Or, the company has a new board of directors: Does this individual have the ability to quickly gain their trust? “It’s like a flight simulator for leadership,” says Leslie Pratch, a Chicago-based psychologist whose book Looks Good on Paper?: Using In-Depth Personality Assessment to Predict Leadership Performance came out in June. “You’re not actually flying a jet, but you can see how you would respond in that situation without exposing yourself and the client.”

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What many boards seek today are people able to adapt to changing conditions and lead amid volatility. Pratch calls such executives “active copers”—always striving to overcome difficulties instead of becoming overwhelmed by frustration. It’s not so much a skill as an orientation to the world, she says, “the ability to see change as an opportunity rather than as a threat.” There’s also a greater emphasis on balanced leaders, people with not just brains and expertise but also the emotional and social intelligence to motivate and persuade all stakeholders. “It’s like farming: You’ve got to take care of the land and know its strengths as well as its limitations,” says Tim Gilmor, an organizational psychologist in Toronto. Ultimately, when Gilmor assesses leader candidates, he’s looking for the individual’s character. “People don’t fail in jobs for lack of technical competence,” he says. “They fail because their qualities of character were not a match for the role in the organization.”

Before starting the process, I do a mental checklist: openness to change? Yup. I thrive amid the chaos of new ideas. Emotional intelligence? I find EQ to be such a vague concept; I feel optimistic but less confident. The character issue is most intriguing, because that’s not just about ethics, but values. Can a shrink interpret those accurately from a multiple-choice test?

When you’re about to undergo a psychological evaluation, it’s tempting to analyze your analyst in return. Pamela Ennis’s midtown Toronto office is replete with flowers (a feminine vibe to disarm big egos?). The room is devoid of technology, aside from a standard office phone (to minimize distraction or a personal quirk?). When Ennis volunteers before our meeting that “on the one-on-one stuff, I’m considered to be hands-down the best in the business,” is it an anxiety-alleviating technique or a big, fat boast?

Ennis, an attractive blond in her early 60s with a penchant for bright colours and a way of enunciating every word that suggests she’s a practiced public speaker, provides executive coaching, testing and team-building services to many of Canada’s largest private and public organizations. But her specialty is leadership assessment. Earlier in her career, she worked at the Centre for Addiction and Mental Health in Toronto, where she helped develop Ontario’s Reduce Impaired Driving Everywhere (RIDE) program, but she was drawn to the application of psychology in management. A brief stint at an executive search firm was followed by a partnership with a former boss that also didn’t stick. She started her own practice at 27. “I like to be in control of my outcomes,” she says.

I do as well. I know what to expect: Prior to meeting in person, Ennis asked me to complete a series of eight questionnaires at my leisure. (Like most in her field, she insists that I don’t reveal the specific tests.) Today, I’m to meet Ennis for an interview of about 90 minutes, after which I’ll do a series of short timed tests in her office. Ennis will then interpret the results and present the findings in a report that’s typically sent to the client firm and given to the candidate during a second in-person session. “It’s a developmental process,” says Richard Davis, CEO of Kilberry Leadership Advisors in Toronto, who specializes in evaluating top-of-house executives at large North American corporations. “It’s important the person should come out of it better than they came in.”

Ennis warned me to keep my sense of humour: Some tests date back to the 1950s and are dotted with references to typing pools and door-to-door salesmen. One Saturday afternoon, I put my attitudes, personality, critical thinking, interpersonal skills, and knowledge of sales tactics and management through dozens of multiple-choice questions. Some tests seemed intentionally repetitive, offering similar choices in varied orders or in slightly different wording (do I prefer “to experience the unusual” or “have a variety of experiences”?). Ennis assured me that each test has a unique purpose and embedded subscales—as many as six—that only a trained practitioner can interpret. “There are all kinds of snake-oil salesmen and saleswomen who purport to have ‘the one test,’” she says, “but you have to look at hard-core competencies, personality characteristics, motivational factors.”

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When I show up for our one-on-one meeting, I know the review has begun before I even shake Ennis’s hand (which I make sure to do firmly, maintaining eye contact). Assessors will often ask their assistants to report on how candidates handle the process of arranging their appointments—were they courteous or difficult? “I’ll usually size someone up within the first four to five seconds,” says one management psychologist who asked not to be named. “Then it’s a matter of validating that impression.” Along with discussing the candidate’s career, some will ask open-ended questions: What does this opportunity mean to you? What are your strengths and weaknesses? But the answers matter less than how you reply—how well and how quickly you explain yourself, and how self-aware you seem. Of particular interest is the person’s comfort in this unusual context. “The individual is now in a position where they have to comply when they’re not in control,” says the psychologist. “Many [powerful executives] have trouble with that.”

I spend almost an hour describing my career while Ennis takes notes, rarely asking questions other than to prompt me to move on. This technique, I’ve learned from Davis, leads candidates to eventually drop their guard and reveal how events in their lives fit together. “You can almost see it emerging in people’s minds,” says Davis, “how they’ve made decisions and the way they were in high school, what that means about them and their connection to the opportunity.” The patterns I detect strike me as negative: The longest I’ve stayed in a job is three years (I’m a drifter); I’ve turned down top positions to stay independent (I’m afraid of success). But I don’t have time to mull as Ennis guides me to another room for the timed tests, which measure abstract reasoning and problem solving.

Psychologists differ in the value they place on tests. “When I started to do this about 12 years ago, it was the Wild West of test development,” says Davis. Over the past half-decade, there’s been some consolidation. The Hogan Personality Inventory and a few cognitive tests, such as Raven’s Matrices and Watson-Glaser Critical Thinking Test, have become standard tools. The Myers-Briggs—which divides participants according to, among other things, their tendencies toward extroversion versus introversion and thinking versus feeling—remains popular, even though some practitioners question its validity. Projective tests, such as the famous Rorschach, are more controversial, and are used to assess how people handle ambiguity. Then there are so-called assessment centres, workplace simulations that involve daylong exercises in off-site facilities where candidates are put in scenarios they might encounter in their jobs: A disgruntled employee comes into your office. Can you see beyond their superficial complaint to the real issue? Psychologists tend to disdain such drills. “For a high-level role, they’re pretty useless,” says Pratch. “By this point, you know how to treat subordinates or organize your time.”

Leadership assessments aren’t infallible. Research shows that people can game their test results, though many psychologists argue they can spot fakers using metrics like “infrequency scales,” which highlight inconsistencies in a subject’s responses. Besides, everyone I’ve talked to stresses that a psychological assessment is just one data point weighed in a hiring decision. To prove assessments’ value, psychologists tend to cite cases in which a hiring committee rejected their advice, and seasoned practitioners have lots of war stories. Early in his career, Davis was hired to assess a potential C-level hire for a Fortune 100 retailer. “Within five minutes of starting the interview, I knew he would be a disaster,” Davis says. The person was a terrible fit culturally with the client company, yet throughout the process, the CEO, clearly a fan of the candidate, repeatedly contacted Davis, trying to influence his views. When Davis gave the candidate a strong thumbs-down, the retailer hired him anyway. The executive lasted four months. It was a public embarrassment for the company. “After that, the CEO became my best client,” says Davis.

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Such failures are traumatic for everyone—most of all, the hire. Some psychologists will even tell a candidate if they think the person is a poor fit for a job, but only if they believe he or she can absorb that kind of feedback. Those least able to accept constructive criticism often tend to exhibit other red-flag characteristics, such as narcissism or a sense of infallibility. “Perfectionism is the most under-recognized trait that reliably predicts malfeasance,” Davis wrote in a Harvard Business Review blog post titled, “Can You Predict Leadership Failures?” Additionally, when people get their first exposure to power they can be transformed by it, says Gilmor. “You can see more of the dark side emerge because they get the adrenalin rush. This is where you need to watch for the exploitive personality showing up.” Gilmor has evaluated people he considered downright dangerous. “I’ve seen companies broken up because they hired a chief gardener and didn’t recognize that he had a black thumb.”

Three weeks after our first meeting, I’m back in Ennis’s office. I’m nervous. Ennis has told me that she believes leaders are born, not made, and there is some research to back that view. For example, of the 16 Myers-Briggs personality types, four dominate leadership roles; the most common in big business and politics is the extroverted, intuitive thinker, or, to use the tests lingo ENTJ. “The whole North American leadership-development industry is predicated on the idea that if you send people to enough courses, you can make them leaders, but it’s not true,” Ennis says. “The environment can dial up or down what we’ve got, but it cannot replace what’s not there in the first place.” In short: You either have it or you don’t, and I’m about to find out if I do.

The first thing Ennis tells me is that I’m smart—though she stresses that she’s not talking IQ but analytical skills and “intellectual functioning.” Mine are “absolutely first-rate” and in the “superior range” compared with other senior executives she’s assessed. I mentally fist-pump.

There’s more good news. I’m strong at both big-picture strategy and operational detail, which is a valuable mix in leadership roles. My Myers-Briggs profile (introversion-intuition-thinking-judgement, or INTJ) suggests, among other things, that I trust my own insights, regardless of authority or popular opinion—another vital leadership quality, says Ennis. This confidence in my own judgment, combined with resilience and responsibility for my actions, means I have emotional intelligence in spades. Additionally, I work very well under pressure (as those timed tests testify), apparently a rare skill. “Everybody thinks they do, because it’s a sexy thing to say,” says Ennis, “but all the research indicates that most folks crash and burn.”

It’s pleasing to hear about my strengths, but it’s my shortcomings—or, as Ennis terms them, “exposures”—that I find more intriguing. A big one she identifies is impatience with slackers and the tendency to work around them. I know she’s right, but I’ve never really thought of it as a fault. Ennis explains: A leader needs to know how to motivate and inspire all types. “It’s gratifying for you to coach up-and-coming Joannas,” she says. “It’s a strain to coach people who are about 50 IQ points less bright than you and need constant reinforcement.” I also need to boost my persuasion abilities. “A key leadership skill at the executive level is dealing with difficult people,” Ennis says—those irrational or hostile individuals determined to foil you. “You need to know how to keep a sanguine look on your face while you’re thinking, ‘You’re going to play that game? Bring it on. I will eviscerate you with such finesse, you won’t even know you were cut open.’” It’s chilling to hear this genial lady transform into Machiavelli. She then brightly informs me that the Ivey Business School offers a course on this.

The next one stings: “You’re not the most empathic of individuals.” I register strongly as a “thinker” on the Myers-Briggs scale, which means that when making decisions, I’m all business, giving little credence to subjective or emotional factors. And because I’m an introvert, I can be perceived as aloof. “You’re very emotionally intelligent; socially intelligent is where you need some development,” Ennis advises. It’s slightly comforting to learn that most CEOs rank low on empathy. “They understand it intellectually, so they pay attention and ask questions about not just what people think but how they feel.”

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Nothing I hear comes as a big surprise, which is a common reaction. “The overwhelming majority of people who sit in this chair say, ‘You nailed me,’” says Ennis. More than 95% of the assessment is based on her interpretation of the tests, and she intentionally doesn’t ask the candidates for any self-analysis. “If I come to you independently and my assessment resonates with your sense of self, then we can both be confident of it,” she says. The interview is helpful, but secondary, she says. “An interview focuses on the present and past. I’m trying to look at future potential.” And predicting rather than just describing is where a leadership assessment’s true value lies.

I leave Ennis’s office energized, believing I have vast potential and just need to direct it in the right ways. Mock at the Ontario Teachers’ Pension Plan had a similar reaction when he underwent an assessment with Ennis. “I thoroughly enjoyed the process,” he says. It motivated him to ensure that his team filled the gaps in his skill set. “You have to be aware of your blind spots that could become impediments,” Mock says. “I told my team, ‘If you see them coming out, you tell me.’”

People who study leadership deal with a lot of misconceptions. For example, we tend to think of leaders as the best and the brightest, but that’s usually not the case. “You have to be smart enough,” says Ennis. “But the most brilliant of us do not necessarily lead companies or countries.” Secondly, a born leader can be a lousy manager, and Ennis believes companies put insufficient focus on developing management skills such as coaching and delegating without losing control. Conversely, people who aren’t natural-born leaders can successfully lead organizations by compensating for their shortcomings once they’re aware of them.

Enlightened companies recognize this fact, which is why leadership assessments are increasingly used to identify talent worth grooming. When Ennis started her practice, the vast majority of her engagements involved vetting senior job candidates. “Now the pyramid has shifted,” she says, “and two-thirds are developmental assessments of high-potential people.” Canadian Tire, for example, appraises middle managers it’s considering moving into executive ranks. “When we see potential, we want to help close their knowledge gaps and understand their underlying natural inclinations, what’s in that person’s DNA,” says Olga Giovanniello, the retailer’s vice-president of HR. Sometimes, an evaluation indicates that a person wasn’t ready for a promotion or that their real value lies in a different role. “It’s not that it’s a surprise, but it helps you explain the why,” says Giovanniello.

At the end of my assessment review, I press Ennis for a verdict: Do I have what it takes to be a leader? She hedges; there are long pauses. “I think you’d be a great leader…leading four to five people who are just like you: self-motivated, technically competent, not whiny,” she tells me with a warm smile. “If you can hand-pick your A-team, they’re gonna love you.” However, she cautions me that taking on a top job would come at a high cost for me. The intense demands of time and other people’s needs would challenge someone with my strong independent streak. She has successful CEO clients with similar profiles to mine, but she stresses that I’d have to really want the job.

The ability to lead is ultimately an aptitude—an innate quality that needs polishing to shine. “A leader is an individual who can see the possibilities and creates the environment where people allow themselves to be led because they want to follow,” says Ennis. “This type of person tends to be self-directed and independent, and might question authority, so in their early careers, there are attempts to rein them in or drum them out.” Psychological assessments’ fundamental promise for employers is to help identify such people, so they can be encouraged to take on the challenge before they leave for a competitor. As I drive home, I realize I’ve received this encouragement in the past and have demurred to retain control over my work, obligations and time—to be the CEO of my own career. Ennis has helped me to see that I made those choices for good reasons—and that I have the potential to make different choices in the future.