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Vertical leadership assessment – a new approach for a VUCA world

The world is becoming ever more volatile, uncertain, complex and ambiguous.  Our clients are increasingly telling us that their existing business models are being disrupted – by new technologies, by ‘left field’ market entrants, by changes in regulation, etc.  For leaders in these unpredictable times, providing clarity of direction is becoming much more difficult.  If we cannot predict what the future organisation will look like, how can we define with any certainty the leadership models that may be needed?  In the turbulent and rapidly changing business environment that has become the “new normal”, we need a new conceptualisation of what it means to lead.

And for a new idea of leadership, we need a new approach to leadership assessment.  We need to be able to measure not only the usual styles, traits and intellectual capabilities, but also the way individuals make sense of information, relationships and the world around them.

Often unrecognised, these sense-making processes or ‘capacities’ underlie the structure of individuals’ thinking, relating and acting, characterising their worldviews and patterns of action.  They have a profound impact on leadership approach and capability because they affect where individuals place their attention, the inferences they draw and, crucially, the actions they take.  These capacities have the potential to change and become more complex over time, as individuals move through a number of stages of development.

Over the last three years, MDV Consulting has been exploring and researching this field of developmental psychology, also known as constructivist-adult development and more popularly ‘vertical development’ and we have progressively been making it an integral part of our practice.  In this more VUCA world, we believe it is a critical addition to our understanding of individuals’ capabilities and gives organisations a competitive advantage by creating more agile leaders.

Horizontal and vertical

At MDV we clearly see the benefits of ‘vertical’ complementing traditional ‘horizontal’ approaches to leadership assessment.

‘Horizontal’ refers to the trait, competency or behaviour- based models traditionally used in assessment.  These define the skills, knowledge and personal qualities needed to perform ‘business-as-usual’ leadership functions in the steady-state world.  They help to ensure alignment of people with business strategy through selection, performance management and development.

However, in today’s fast-moving environment we know that behavioural competencies can quickly date and become redundant.  No sooner is the ink dry on the latest model than the strategy shifts, a new CEO arrives, and the world moves quickly onwards, often in radically new directions.

So in addition to looking at the horizontal, we also need to look to ‘vertical’, more transformational capacities – an individual’s ability to make sense of complexity, navigate complicated relationships both within and outside the organisation, and manage their own reactions to uncertainty.

A useful analogy is to think of your smartphone – building horizontal capability is like adding new apps; increasing the breadth of skills that allow you to successfully perform different functions.  But building vertical capacity is like upgrading the underlying operating system, making the phone capable of doing more than it could before.

In the vertical space these capacities can be described under three areas:

  • Conceptual – the person’s capacity to grasp complex interconnecting patterns in the world around them and how they make sense of abstract ideas.
  • Interpersonal – how the person takes account of different perspectives and interdependent relationships in complex social systems.
  • Personal – how the person understands and manages themselves and their inner world, their own thoughts and feelings.

If you’re not looking for these underlying capacities in your leadership assessment, you could be missing a significant facet of individuality that’s often hidden.

For anyone concerned with finding the right people for the right roles, we believe the time to consider the vertical dimension has come.

MDV’s approach to vertical assessment

We have always adopted a distinctively holistic, developmental approach to assessment, whether for selection, promotion or talent identification:

  • Inside out – Rather than assessing from the outside, ‘clipboard and stopwatch in hand’, we get close to the individual and work from the ‘inside out’ in a person-centric manner.  What that means is that we help people reflect on their own unique experiences and patterns of behaviour.  We help them identify core underlying characteristics, capacities, values and drivers, and to reflect on what has served them well in the past, what will help them realise future aspirations, and what is at risk of being overplayed.
  • Holistic view – Rather than dissecting people into a series of separate component scores, scales and competencies, we work with individuals to develop a holistic understanding of what makes them distinctive as leaders.  We find this enables us – and them – to gain powerful insights into performance and potential.
  • Engaging experience – Developmental assessment is something we do with people, not to them. We work in a transparent and relational way, encouraging participants to open up and engage in self-exploration and to focus energy and attention on accelerating their self-development.  This sort of assessment experience can spark participants’ internal drive to develop – participants are left with the insight, motivation and wherewithal to address their own individual leadership challenges – hence the developmental aspect.

Our core approach is the lifecycle interview, which we sometimes refer to as a ‘DNA interview’ as it gets to the essence of the individual.  The interview typically also incorporates insights from various psychometrics.

In interviewing for vertical capacities, our assessors not only look at the content of a candidate’s response, but are also specially trained to identify nuances in the way a candidate structures his or her thinking, giving insights into their sense-making processes across the conceptual, interpersonal and personal domains.  Depending upon the context of the assessment, we can also include the option for using additional tools such as the Cognitive Process Profile, a powerful measure of cognitive complexity.

The added value vertical assessment brings to decision making

Illustration 1: External selection

MDV Consulting was asked to assess three external candidates to help with the final selection decision for a head of function appointment.  All had the technical and professional background needed for the role, but the hiring organisation was keen to explore the possibilities each could bring to a function that had been run in the same way for many years.

From our developmental assessment approach, one of the candidates emerged as operating at a relatively early stage of vertical development.  His core mindset was that of a technical expert, making sense of the world through a view that there is a ‘correct’, best practice approach to be followed.  Aligned with this, he was highly methodical, cautious and had a strong concern for getting things right, preferring to work within tried and tested, established parameters.

The second candidate was at a slightly later stage of vertical development, but still operating in what is referred to as a ‘conventional’ mindset. Particularly in the Personal domain, her dominant way of making sense of the world was through meeting expectations – those placed on her by her role, her need to maintain her reputation, and her personal high standards.  Action-orientated, she tended to focus in on what was achievable within her own area of influence, with a more limited awareness of wider possibilities.

The third candidate emerged as clearly ‘post-conventional’, showing later stages of development in his vertical capacity, particularly in the Conceptual domain. Able to step back from immediate issues to consider multiple interconnections on a broad scale, he could envisage the implications of decisions in their widest context.  He could navigate ambiguous situations with clarity, identifying opposing tensions and their interplay while still being able to arrive at confident conclusions.

The organisation was faced with a choice – hire the best practice expert, the dynamic achiever, or the post-conventional thinker?  They decided the third candidate showed the most potential to develop the scope of the function and its contribution to the future of the organisation in a changing external environment.

Illustration 2: internal promotion

We assessed a number of candidates for internal promotion in a professional services organisation.  This group were all similar in terms of age and experience, all identified as strong performers and all demonstrated high levels of intellect and technical expertise. However, when we looked at vertical capacity, we were able to find a wide range of differences.

In the Conceptual domain, candidates at earlier stages in their vertical development tended to be restricted to the perspective of their own professional expertise, seeing issues in stra

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