Episode 6 - Too Much for Too Little for Too Long
The original theme of this episode was to continue the series on how to recognize old assessment products that try to look new. However, I ran into a situation that screamed for the attention to all assessment customers. A distributor of a fairly questionable assessment product was happily changing to a newer and much more up to date system. I was advising him on how to make the transition and happened to ask the price of the old product. He said it he sold it for $175 each, but the test publisher wanted him to raise the price to $275. I was ASTONISHED, FLABBERGASTED, and APPALLED. This was like buying day old bread at wedding cake prices.
It is not only that the price was ridiculous for the quality being delivered, but “Assessments are a digital product!” Any fixed costs are in the distributor system and the operations of the test publisher. The first assessment instrument may cost a million dollars in development, but the second one is near free. I don’t mean “free” literally. Of course, businesses want to make a profit. But, really, I believe that most companies using assessments today have been paying TOO MUCH, for TOO LITTLE, for TOO LONG!
Over 20 years ago, when I entered the assessment industry, tests were completed in booklets and often monitored for timing purposes. Once completed, the information generally required explanation by an expert or some special training. It was reasonable to charge for these services. Today the Internet delivers the surveys automatically; computer programs calculate the results; and the reports are presented almost instantly.
At the HR Technology Expo in Chicago, there were disruptive offerings of high end assessment technology with effective costs of as little as 50¢ per candidate. Not only was the cost disruptive, but the products were quicker and easier to use, with over 20 different outputs…at the same price. This dramatic change in cost opens the door to unprecedented opportunities for capturing talent more efficiently and across all positions. Imagine… increase applications; save time; and save money.
I encourage you to read Chris Anderson’s Free. If your business touches or is in the digital world, it offers a critical perspective for understanding the sea changes that are taking place in the marketplace.
More information on the qualitative differences in assessments is available at www.aboutassessments.com. Episode 7 will continue the discussion on how to tell the age or capabilities of the many assessment products competing for your business.
Written by Chuck Russell, CEO
Episode 5 - Are the Hundreds of Profiles for You…or the Salespeople?
There are a number of assessment companies touting their “hundreds of job profiles” and their “millions of people tested”. On the surface, these claims are impressive, but perhaps a bit more examination is in order. “Job profiles” originally offered an alternative to having an expert personally interpret the data from an assessment. Employees who performed at a high level were identified and assessed. The resulting data was analyzed to search for any factors that top performers had in common. It was then reasoned that candidates with those same factors would be more likely to also perform well. This was a sound methodology for dealing with routine jobs with clearly defined procedures that seldom varied. Jobs today are rarely that stable. The market changes; the economy changes; the company’s strategies change; and the job changes to meet the current needs. The managers change and the right person for one manager is not quite right for the next manager. The library of profiles is unlikely to contain the one that will serve you best. Your business is unique, and it needs a solution that fits you and then changes with you as the needs of your business change.
Why then, do so many assessment companies promote profiling and center their business around it? To paraphrase the Big Bad Wolf, “…All the better to sell you with, my dear!” When good assessments first appeared (“good” meaning that they produced solid data) experts were needed to explain the data and how it related to business decisions. This worked for the occasional situation, but it was not scalable for an assessment business. Profiling was not only scalable, but it was an easily understood story that made sense to prospective buyers. It also worked fairly well with simple jobs. The salesperson asks if you want more people like your top performers. You, of course, say “YES”. The salesperson then offers to test a sample of your top performers and create a template or benchmark which can then be used to compare job candidates. The sales pitch is simple and appealing, and it is somewhat true. The problem is that it is just true enough to be dangerously wrong. There are a myriad of variables that affect job performance that are lost in the rudimentary percentage match to a job profile.
More information on the qualitative differences in assessments is available at www.aboutassessments.com. Episode 6 will continue the discussion on how to tell the age or capabilities of the many assessment products competing for your business.
Written by Chuck Russell, CEO
Episode 4 - Signs of Aging or How to Recognize Old Assessments
There are some simple ways to recognize old assessments, even when they look new in the marketing materials and on the Website. The simplest way is to look at the format of the questions, or items as they are called in the psychometric world. In the last 80 years, scientists have learned more and more about how to build better and more effective items. This means that newer items help the participants answer the questions in such a way as to produce a clearer and more accurate picture of who they are. They do a better job of getting frank and honest responses.
The oldest and simplest form of personality assessment is an adjective check list. This is a list of adjectives, such as persuasive, timid, shy, direct, enthusiastic, reserved, organized, messy. The participant is instructed to select those adjectives which they feel best describes them. They are then asked to respond to a second list of the same adjectives by selecting those adjectives that their friends might use to describe them. This type of exercise can certainly be fun and provide the basis for an interesting discussion. However, few sales job candidates select timid, shy, reserved or similar adjectives that would be seen as negative or undesirable characteristics for sales positions. The failing of this type of item format is that it is transparent as to the value of each answer with regard to a type of job. This format has been widely sold since the 1950’s with little change to its simple model.
The most common form of item is that of a forced choice, in which the participant is asked to choose which of four words or phrases is most and least like themselves. This is the basis of DISC-type assessments. This basic format was developed by William Marston in 1928. It was an improvement over the adjective checklist, because it was more difficult for participants to perceive the “better” answer. Unfortunately, a more serious problem lay within the forced choice format. It produced ipsative scores, a psychometric term from the Greek word ipsa, meaning self. Essentially, the scores from a forced choice questionnaire are self-referential, or meaningful only to the participant. The scores of one individual cannot be meaningfully related to any other individual, even though the questionnaire and the terms are the same. The reason for this is that the most - least choice suggests a difference or gap between the individual’s preference for each of these choices. However, there is no way to determine how wide the gap is. It is not known whether one person saw little difference in the choices or whether they were seen as miles apart. This means that these type of assessments cannot be used for hiring decisions or for comparing people or for creating norms. This does not mean that such assessments are not sold for those purposes or promoted at doing that.
More information on the qualitative differences in assessments is available at www.aboutassessments.com. Episode 5 will continue the discussion on how to tell the age or capabilities of the many assessment products competing for your business.
Written by Chuck Russell, CEO
Episode 3 - They All Look the Same…Sort of
Even old assessments look beautiful coming from a new inkjet printer. The terminologies all sound pretty much alike. The promises made by the salespeople all sound similar. The fact is that they all have some value, and even the oldest will seem accurate when you read your report. The important thing to realize, as the customer, is that the question is not one of working or not working. Pay phones in glass and aluminum phone booths worked, but they did not work anything like smart mobile phones. Typewriters worked, but nothing like word processors. Technology is capable of quantum leaps in capability. That is exactly what has happened over the last twenty years in the world of assessments.
There is nothing dangerous with using older assessments. Similarly, you can safely use a typewriter or carry around some coins for pay phones (assuming one could be found). Their limitations are the problem. More advanced assessments give you extraordinary capabilities. The latest generations of assessment technology effectively make bad hires a thing of the past. They allow you to actually engineer better teams, which is light years beyond the classic team building workshop. You can use the DATA to link the operational strengths of the team to the operational strategies of the business. With 7th generation tools, you are able to unlock the potential of every employee and contribute to the enterprise in ways you never imagined.
The challenge is to recognize the newest generations of tools amid all of the early ones dressed up in new marketing stories and Websites. Read Episode 4 of CHANGING THE GAME for simple clues to look for when shopping for assessments or to evaluate your current vendor.
Written by Chuck Russell, CEO
Episode 2 - The Players
To understand the assessment market it is necessary to understand the players, the test publishers. There have traditionally been two primary types of players. The first were smart businesspeople who discovered simple personality surveys and realized the potential for selling them to companies. These thrive because of the lack of knowledge among the buyers about current assessment options and about advances in assessment science and methods.Some of the companies themselves do not understand the limitations of their outdated instruments, which use methods long since abandoned by serious psychometricians (specialists who create tests).
The second group of players were the serious psychologists and psychometricians whose research into how to measure human traits and abilities developed better and better tools. Unfortunately, while these produced good data, experts were needed to interpret the results. Even with the remarkable data, the complexity of implementation limited their application. These companies generally delivered their assessments with consultants and specialized training programs. Their use was generally reserved for senior executives or key salespeople.
A third type of player emerged in the wake of the Internet. Seeing the business potential of online testing, some companies cobbled together early generation personality surveys or resurrected the odd research project. They dressed them up with a slick Website, and market them today to unsuspecting customers as the latest thing.
Most test publishers are well meaning businesses. They are selling what they have always sold. Unfortunately, assessment technology has moved on, and every day customers are becoming more knowledgeable. The objective of these blogs is to add to their knowledge from my unique perspective in the industry. Watch for Episode 3 - They All Look the Same…Sort of. You can also visit www.aboutassessments.com for more information without any selling.
Written by Chuck Russell, CEO
Episode 1 - The Crowd
I have been in the assessment world for over twenty years. My elementary education was in DISC, but I graduated to serious instruments with the help of some more widely educated experts in the field. Inspired by a glimpse of what was possible, I began a 2 year exploration of the assessment market. I took hundreds of the 80,000 occupationally-related instruments. Some of the top people in psychometrics were kind enough to teach me about the science of building assessment tools. I accumulated a library of incredibly boring but informative books on the subject. I attended conferences and seminars. Two things became clear: First, there was a crowd of assessments in the marketplace, with a chasm between the quality of the best ones and the quality of the most common ones. Few people understood the personality theories that were the basis of the tools, and more telling, where each theory fit in the chronological evolution of psychological science. In other words, which ones were old ideas and which were based on current thinking. Even the salespeople selling assessment products seldom knew anything about other assessments or where theirs fit in the quality mix. Since the salespeople knew little, they could only communicate little to their customers other than extolling the virtues of their wares. Well-meaning business people tended to purchase whatever they were sold, having no reference point to its relative value or to newer alternatives.
Ironically, the second thing I discovered was that there actually were a handful of instruments that were based on current psychology and used the latest psychometric methods to collect the data. These instruments measured hard-wired traits and abilities, accurately and reliably. Consider this: These traits and abilities were the foundation of all human behavior. AND THEY DID NOT CHANGE WITH TRAINING, COACHING OR INCENTIVES!! This was a game changer for HR particularly and business in general. It shattered the existing paradigms of hiring, training and managing. This was amazing! Why was everyone not using this data? The answer was that only a handful of of the 80,000 assessments can actually do that. Most provide interesting reports and fun exercises. Some provide some hiring information, but that too is little more than an isolated event.
The game changers were effectively lost in the crowd. Learn more about what they can do and where they are hiding in Episode 2.
Written by Chuck Russell, CEO
Example #1 - Unsuccessful Sales Team
A medium-sized company had developed and patented several significant innovations in their industry. These innovations had the potential to give the company a dominant position in their market. Despite this promise, for the first few years, the company struggled to produce sales. Why were they failing?
First, the company’s product used a highly sophisticated technology to deliver customized solutions. Salespeople had to master this complicated product knowledge and be able to explain it to potential customers. In addition, the sales strategy was to offer an integrated solution that touched many areas within each customer. This meant that multiple individuals within the prospect must each be persuaded to make a buying decision. The company felt that this approach gave them a competitive advantage over their competition. What was not apparent at that time was the extent to which this strategy challenged the job capabilities of the sales team.
This was a complex sale, and learning the necessary product knowledge demanded the ability to learn and process information very quickly. Persuading several different buyers required a high level of assertiveness and the willingness to deal with confrontation and objections of different kinds. DATA was used to inventory the relative strengths and abilities of the sales team. The charts below show the distribution of the company’s sales team on the two critical factors of learning speed and assertiveness.
Four of the salespeople (red squares) learn slowly, which means they are not going to be successful in a role that requires learning quickly. The next chart shows the remaining six salespeople on a scale of persuasiveness.
Four of these salespeople are not persuasive (red squares), and therefore cannot be successful at closing sales.
The DATA strengths inventory clearly shows that only two of the ten salespeople have any chance of being successful. It is important to note that the eight unsuccessful ones were educated, hard working, and likable employees. They received considerable training, including specialized sales training. Yet the inability of the company to recognize that only 20% of their sales team could sell their products almost led to their complete failure. The good news is that once the DATA revealed the cause of the problem, effective solutions could be seen and implemented.
Example #2 Small Training & Consulting Company
After a successful career in a large chemical company, one of the senior executives started his own business doing what he loved best, training and consulting. He bought a license for an outstanding program of training materials and went through the appropriate certifications with top marks. A few of his close friends engaged his services, and his work in helping them was exceptional. Unfortunately, as the next two years went by, new engagements were not realized, despite the fact that he regularly attended networking events and followed up with many leads.
DATA was used to map his hard-wired strengths and abilities so that they could be compared to those that were critical to the training and consulting business. In terms of operating the business and delivering excellent training and consulting services, his strengths were perfect. However, training and consulting engagements must be sold. That requires strong levels of assertiveness and the ability to deal with stalls and objections. The chart below shows exactly why his small business was failing. It represents a normal bell curve with extremes of behavioral strengths on either end. This type of sale typically requires a level shown by the yellow squares, and this entrepreneur level is shown by the red square with the asterix.
In his small business, he had no one to bring in engagements but himself. No matter how hard he tried, he did not have the ability to do that.
It is important to note that in each of these examples, the business idea or model was sound. The cause of the struggles and in the second case, the failure of the SME’s was the lack of people to perform the critical jobs within the businesses. Other examples of this have been:
The importance of having the right people in the right roles is paramount for both small and medium-sized enterprises. DATA can certainly be used to diagnose the cause of many business challenges, but it can also be invaluable as a starting point with any business evaluating how well its human resources match the needs of the business strategy.
Written by Chuck Russell, CEO
SME’s are a powerful economic force around the world. They usually form the greatest percentage of businesses within every country; the greatest percentage of employment; and a significant percentage of the GDP. Unfortunately, SME’s are also subject to a disappointing failure rate. Those failures are not caused by government regulations, and few are the result of economic circumstances. The majority of SME failures happened because the salesperson could not sell the product or service, or the manager could not manage the business effectively, or the production manager could not recognize quality. Essentially, the businesses did not have the right people in the right jobs.
IBM can hire a thousand poor performers and there is little effect on the whole enterprise. If a small business makes one bad hire, or if the founder or one of the key people is a bad fit for their role, that business is unlikely to survive. It will never flourish. If a medium-sized business makes two or three bad hires, or if one of the key executives cannot perform their role, that business is unlikely to survive and will never flourish.
There are many factors that affect the life of an SME: the economic environment, government regulations, competition and the operational effectiveness of the enterprise. The only one of these that is within the control of the SME is operational effectiveness. People are the heart of this. Every business demands a wide range of operational behaviors to be profitable. Products and services must be sold. Financial affairs must be handled efficiently. Customer service must be provided. The performance of the employees must be managed. Each of these roles requires a somewhat different set of strengths and abilities. No one person can perform them all. The challenge for small businesses is that often each person must fill more than one role. Some of these roles are good matches for the individual, and some are not. It is vital for the small business owner to know what strengths are available and what gaps exist. When small businesses start, it is generally family or friends that fill the jobs needed. Unfortunately neither family nor friendship is a guarantee of job performance. DATA can easily identify whether or not the current team has the necessary strengths and abilities. Once that is known, the solutions become clear.
Written by Chuck Russell, CEO
A rally word is exciting. It is inspirational. It speaks of a desirable characteristic. It is a word that people want to rally around. “Innovation” is just such a word. The world is changing rapidly. The pace of business is quicker. New things are appearing every day, and some of these new things seem to explode into financial success. It is easy for “Innovation” to appear to be the battle cry for all entrepreneurs around the world. Yet, the role that “Innovation” plays is different for every business. That role, and how it impacts each part of the business, must be clearly understood in order to have “Innovation” be the positive factor that is needed.
First of all, how a person interprets the idea of innovation depends upon specific hard-wired personality traits and abilities. One third of the population loves new ideas, and in fact, seeks out change. An entrepreneur of this type is more likely to innovate in bold, new ways. They can also change directions too often and chase the newest idea instead of working through the problems they have in their current business.
Another third of the population has a more incremental view of innovation. Preferring to stick with what already works, they avoid changes and make careful and considered adjustments to existing ideas. Once a business is established, consistent processes and procedures must be developed in order to ensure its sustainability. This group of people does that part very well.
Successful businesses need both ends of the innovation spectrum. Without new ideas and the ability to change, they become stagnant, and soon left behind by more agile competitors. Without the persistency to work through the inevitable obstacles of entrepreneurial businesses, creative owners can be distracted and spend their time and resources chasing new ideas that seem to promise an easier road to success. It is critical that small businesses understand what kind of innovative strengths they have and what kind the business needs. That knowledge will lead them to make better decisions as they move through the various stages of growth in their enterprise.
Written by Chuck Russell, CEO