Each year thousands of companies search for new CEOs and other senior-level executives, needing to find the right candidate to mesh with their boards, increase profits and develop a more effective workplace culture. And with CEO total compensation averaging nearly $10 million in 2004-a 13 percent increase from 2003, according to a Pearl Meyer & Partners study for The New York Times-companies are increasingly turning to psychologists to help them evaluate and interview potential senior-level executives, experts say.
Psychologists bring an inimitable, scientific perspective to the search process, and thorough psychological assessments can save companies from expensive mistakes, says Jan Cannon, vice president of human resources for Sur La Table, a specialty cookware retailer.
"Hiring executives is extremely costly, and they're in a very visible role," Cannon says. "If they're not successful, it can have a very negative impact, both in terms of cost and morale within the organization."
And psychologists are taking notice. In fact, an increasing number are entering business consulting and helping the CEO selection process, according to psychologist Judith Blanton, PhD, a Los Angeles-based senior consultant at RHR International, an international corporate psychology firm.
Ensuring a proper fit
The key for psychologists helping companies reduce the hiring gamble is to research the company tirelessly, says psychologist Carl Robinson, PhD, principal of Advanced Leadership Consulting, a Seattle-based company that specializes in helping companies assess and coach their executives to increase their productivity.
"You have to get to know the behavioral attributes of the company," he says. "An executive who is successful at Microsoft may not necessarily be successful working as an executive of a family-owned business."
As a result, Robinson works with both human resources executives and the company's board of directors to ascertain a sense of the company's culture and goals.
Another psychologist who works to help companies assess senior-level candidates, Steve Kincaid, PhD, a New York-based principal of Heidrick & Struggles, an international senior-level and executive search firm, says that a deep understanding of the interworkings of the position is also essential.
"We have to learn the organization's market challenges, the position's operational demands, the board's needs and the organizational culture in order to understand all the layering of complexities on the position," he says. "It's beyond just an operational role, we need to know everything that goes into the position in order to know leaders will perform and add value in the position."
For instance, in 2003, Cannon was working as vice president of global human resources at Trendwest Resorts, a subsidiary of Cendant Corporation, when Trendwest asked her to lead a search for a vice president of marketing for the company, which sells and manages time-shares.
One of the job's responsibilities included helping Trendwest, which was a family-owned company until 2002, develop a nationwide online direct marketing campaign. As part of that role, the vice president would also have to straddle roles within both Cendant, a 90,000 employee organization, and among Trendwest's 5,000 staff members.
"It was an extremely difficult role," says Cannon. "It was almost like working with two different companies."
To help her evaluate which of the potential candidates were a good fit for the job's unique nature, Cannon turned to Robinson.
By performing psychometric assessments of the final candidate, Robinson was able to develop a sense of the candidate's abilities to multitask-an essential element of the Trendwest position.
"At the senior level, most candidates are really good at selling themselves," Robinson says. "We have to get beyond salesmanship and figure out who they really are."
The tests help psychologists like Robinson get a sense of the way candidates consider issues, their political savvy, and their ability to actively engage an organization and execute its goals.
However, despite the tests' sophistication, psychometric testing is at best about 80 percent effective, Robinson says.
"No psychometric assessment is going to say that if you simply do this or that you will be successful, so we also include more sophisticated methods that provide a much richer view of the candidate's technical skills and personal style," Kincaid adds.
Those methods include an extended interview that aims to help the psychologist evaluate a candidate's career history, current role, vision for the future, engagement in his or her job and thinking style.
For instance, when Robinson interviewed candidates for the Trendwest position, he inquired about the candidates' visions of both a current comprehensive, nationwide marketing campaign and potential subsequent campaigns.
"The interview allows us to connect the dots to see how they do their job, play out their roles, their impact on others and to observe the personality characteristics that impact their leadership firsthand," Kincaid says.
Because of his psychological training, Robinson says that he has a new perspective within the interview.
"As psychologists, we're trained in behavioral change," he says. "We know and can recognize how people adapt."
Beyond the hire
Within the past four years, Kincaid has seen a shift in the services that company executives, like Cannon, request. For one, an increasing number of companies ask him to continue working with the company after the hire since they want to ensure that their investment in the hire goes as planned, he says.
"Working as a CEO or other senior-level position is an extremely tough role," Cannon says. "A number of the issues they deal with are extremely confidential, so they have few places to turn. It's nice to have an outside perspective to help coach them through the situation."
Executive coaching can also help executives improve their relationships with other senior-level executives. For instance, one newly hired executive that Robinson worked with suddenly became taciturn at board meetings whenever an older board member stared at him over his glasses.
With Robinson's help, the executive realized that the board member's gaze reminded him of his father-a perfectionist who he felt he could never measure up to. He then worked to develop a new, more positive association with the board member.
"Executive coaching allows these very intelligent, motivated people to gain insights that they otherwise might be without," Robinson says. "And the companies are better off for it."
Psychologist Matt Richburg, PhD, an Atlanta-based consulting vice president of Right Management Consultants, a career transitions and organizational consulting company, agrees.
"We can provide a different perspective to help executives look for what impact a decision might have on business and shareholders," he says.
Other services that these consultant psychologists offer include helping high-level executives shift directions in their careers, helping companies develop succession plans and working with companies to coach team development.
Yet despite the potentially lucrative nature of the job, the psychologists are careful to warn that a consulting career requires solid grounding in business, which many, including Richburg and Robinson, gained through firsthand business experience.
"We take our background and use it with a completely different language," Richburg says. "We have to be business people first."