WHO is More Important than WHYback
Why the World’s Largest Hedge Fund Firm Uses Psychometric Assessments
WHO is More Important than WHAT. WHAT can be taught. WHO is the most precious resource, the greatest asset in a business. A business plan that doesn't leverage its greatest asset doesn't make good business sense.
Psychometric assessment affords us the opportunity to learn more in-depth and useful information about why we do what we do; how we get in our own way; and some potential pathways for change. Assessment results assist in investment decisions, hiring decisions, development decisions, and management. They facilitate our recognition of our strengths and our opportunities for development. They also facilitate our understanding of our values, abilities, and skills. Armed with that information we can better support and strategize personal and professional development.
Self-assessment and assessment of others tends to be highly inaccurate due to our hard-wired biases. Ray Dalio and Bridgewater Investments (the world’s largest hedge fund company) rely on psychometric assessments during the hiring process and throughout employment to understand how people think and act. Psychometric testing is more reliable than information that can be gained in an interview. Dalio has stated that if he had to choose between formal interviewing and psychometric assessments (which he doesn’t), he would choose psychometric assessments.
In his book, The Coming Jobs War, Jim Clifton notes “It is wiser to study the person than the idea.” Clifton (the chairman of Gallup) is referring to the importance of investing in entrepreneurs and small businesses to help drive our economy. According to him, we don’t need breakthrough innovations as much as we need to understand and assess the talent and makeup of people who start companies. The game-changing resource in the workplace lies within the power of human nature (behavioral economics) and the almighty dollar (classical economics.) Behavioral economics tells us that engaged workers are the biggest resource we have. One-fifth of people in the United States are disengaged from their work. One of the driving factors of engagement is whether one is positioned to do the work that she does best and that she loves. Psychometric testing assists in finding that fit.
Korn Ferry, the preeminent authority on leadership and talent, completed a global study that shows the importance of organizational coaching and the impact it has on organizational success. Following in order are the top ten coaching topics for C-Suite-Level leaders:
- Interpersonal relationships, listening skills, and empathy
- Leading times of change
- Communication skills, motivation and engagement
- Leading with vision and purpose
- Building effective teams
- Strategy and strategic thinking,
- Working with uncertainty and ambiguity
- Mentoring and developing internal talent
Psychometric assessment facilitates understanding and developing these characteristics. Assessment guides the coach and the person being coached in creating and implementing specific goals tied to objective information.
I have found psychometric assessment invaluable in the coaching and consulting work I have done with entrepreneurs, executives, and family businesses. Assessments are like looking in an uncracked mirror. People are eager to learn more about themselves, resulting in a high level of buy-in from participants. Work is not just a way to make money. Meaningful work is a cornerstone of mental health. It is easier to find and be successful at meaningful work when one knows WHO one is. WHO is more important than WHAT.