David Spencer, Managing Partner, Melbourne, Australia

September 2021

The Hidden Value of Organizational Capability Assessment

Undertaking a capability and development assessment for a suite of employees is a great way of benchmarking a leadership group and gaining business critical insights as to where talent gaps and career development opportunities may exist. But there is an additional cultural component generated which is just as advantageous. 

Developing a comprehensive understanding of the leadership strengths and development areas of a group, both individually and collectively, is increasingly seen by many organizations as an integral strategic component of their collective commercial, cultural and operational goals and aspirations.

Assessment of job candidates vs internal teams

Assessing prospective recruits as part of a hiring process has been around for a long time; the same cannot be said for the assessment of pre-existing teams already employed in organizations. Psychometric candidate assessments have been in operation for more than 100 years: basic personality evaluations were used in both World Wars to detect neuroses in potential recruits.

Since that time, the sophistication, value and acceptance of psychometrically evaluating job candidates has become a mainstay of the vast majority of hiring departments. The use of these tools are still rising: around 81% of companies using these tests in their interview process say they expect to make more reliable hiring decisions, whereas only 67% said the same in 2010. Today, over 75% of the Times Top 100 companies in the UK and over 80% of Fortune 500 companies in the USA use this form of evaluative benchmarking.

Similarly, and particularly in the past 10 to 15 years, internal evaluations of executive leaders and corporate teams and departments has also grown. Twenty years ago organizational capability assessments were largely underutilized and few companies were providing these services. The importance of assessing team culture and dynamics is now established as a commercial and operational imperative in a growing number of firms across both the public and private sectors.

Why is organizational capability assessment so important?

In the past two decades, HR and management practices have become more structured and rigorous, and there is a greater degree of accountability applied to leadership capability and human capital decisions and strategies, especially with regard to diversity, equity and inclusion. Concurrent with this is an increased emphasis on mentoring, emotional intelligence, employee wellbeing and a heightened sense of corporate responsibility to support employees in their career development.

Many firms go into a capability assessment expecting a concrete and defined set of ‘answers’ in black and white that all add up. Whilst a robust and forensic process will produce a myriad of both quantitative and qualitative outputs, both for the individual and the organization, it has benefits beyond the more obvious ‘Aha’ moments.

The results can tend to also be more nuanced, multi-faceted and complex. They provide an opportunity for self-reflection and learning, and a cultural framework conducive to frank and honest dialogue between participants and their manager (especially if both have been assessed).

The not so obvious benefit to an assessment: shared language

The learning of a shared language from which to develop common understandings and expectations is one of the most powerful but less talked about benefits of an assessment project.

The results can be profound. New words and concepts that were not previously part of the participants’ internal thinking are now openly understood and discussed, resulting in a new dynamic: interactions change, fresh relationships are formed, and efficiencies are built upon. When interlaced with trust and a shared awareness of the company vision, the uptick in positive cultural energy can be significant.

How to select an organizational capability assessment provider 

In order to ensure long-standing benefits to both participants and the organization overall, particularly the ‘shared cultural language’ aspect mentioned above, it is recommended that organizations select an assessment provider who:

- has a bespoke approach that takes your specific organizational needs into account rather than a ‘one size fits all’

- holds significant expertise in undertaking such projects, preferably by undertaking similar engagements for other organizations in your industry/sector, and considerable direct senior leadership experience

- offers a robust and pragmatic blend of quantitative and qualitative measures

- has a very sound grasp of psychometric assessments, preferably with organizational psychologists forming part of the team

- are themselves capable of judging others in a structured and deliberate way. This is important. Those undertaking the capability assessment must have exceptional interpersonal skills, and be able to establish a degree of professional rapport and connection with those whom they are assessing.


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