Some people are born natural leaders, but that's not always the case. Most organizations have to identify, nurture, and develop people with an adequate skill set for leadership roles.
The biggest challenge? Spotting people with leadership potential early on.
Leadership isn't always obvious. It's not just about confidence or authority but also decision-making, emotional intelligence, and adaptability.
That's where leadership assessment tools come in. They provide a data-driven approach to recognizing and developing people with leadership abilities, helping your company cultivate strong leaders who will drive growth and innovation.
In this article, we’ll talk about different types of leadership tools that you can use to identify and nurture future leaders.
{{banner-5="/banner-page"}}
Why leadership assessment tools are essential for growth
The success of your company depends on the quality of your leaders. While strong leaders inspire and motivate others, inadequate leaders can slow down the progress of your company.
That's why leadership assessment tools are essential for developing and sustaining effective leaders at all levels.
These tools have two key purposes. First, they help current leaders to refine their leadership approach and style by identifying their strengths and areas for improvement. You can think of them as performance management report tools for effective leadership.
They give you valuable insights that can help you become better at decision-making, communication, and other important leadership skills.
Also, these tools can help you find employees who show strong leadership potential. Recognizing potential leaders early on allows you to nurture them and help them develop. That way, you’re building a strong pipeline that allows you to fill leadership roles internally instead of having to hire new people.
In addition to leadership assessments, talent management tools play a crucial role in identifying, developing, and retaining top talent.
What are leadership assessment tools?
Leadership assessment tools are used to evaluate a person's leadership potential, strengths, and areas for improvement. They provide data-driven insights that drive both employees' personal growth and your company's decision-making and succession-planning process.
These tools can help access not only leadership skills but also behavioral tendencies, cognitive abilities, and leadership styles, helping companies build high-performing teams.
They come in various forms, from personality questionnaires and competency-based assessments to 360 feedback for managers. There are also specialized leadership aptitude tests for particular industries, such as finance or engineering.
You can purchase leadership assessments on their own, but sometimes they're built into broader people management software or performance management tools.
Below, you'll find different types of leadership assessment tools, categorized by their focus and function.
1. Leadership skills and development assessments
You can use leadership assessment and development tools to measure leadership competencies, do employee skills assessment, and identify skill gaps.
They often come with development plans for professional and personal improvement. To learn more, check out these employee development plan examples.
Here are some tools you should know:
- Korn Ferry leadership architect – This structured framework assesses 38 behavior-based leadership skills, such as strategic thinking, collaboration, and taking initiative. It helps you identify skill gaps and provides a roadmap for development.
- Gallup Clifton strengths test – This leadership skills assessment enables you to identify the individual strengths of each employee, encouraging them to maximize their natural abilities and leverage them for leadership roles. The idea is that you should focus on a person's strengths rather than weaknesses.
- Leadership circle profile – With this 360-degree leadership assessment, you can gather feedback from people at all levels in the organization, including peers, superiors, and direct reports. It allows leaders to see how they're perceived by others and explore underlying assumptions and beliefs.
- Kouzes and Posner’s leadership practices inventory (LPI) – LPI is another 360-degree assessment, but it's more focused on observing and measuring leadership behaviors grouped into five key categories (leading by example, inspiring a shared vision, encouraging innovation, etc). It provides you with a framework for improvement and skill development.
2. Leadership style and behavioral assessments
You can use these tools if you want to discover your leadership and communication style. Some of the tools also provide 360-degree feedback that can help you uncover your blind spots and areas for improvement.
Here are some of the tools you should try:
- DISC personality test – The DISC assessment evaluates leadership and communication styles based on Dominance (D), Influence (I), Steadiness (S), and Conscientiousness (C). Everyone has a mix of styles, but there are typically one or two predominant traits. CEOs and executives most commonly have Dominance (D) and Influence (I) as their strongest traits.
- Hogan leadership forecast series – This test assesses leadership potential, risks, and challenges, helping you identify high-potential employees and avoid the costly mistake of promoting the wrong people into leadership roles. It's often used for succession planning and making strategic decisions.
- MLQ (multifactor leadership questionnaire) – This questionnaire determines leadership styles and the outcomes of each style, particularly focusing on transformational, transactional, and passive/avoidant leadership behaviors. It consists of two parts, self-assessment and 360-degree feedback, and they're the most effective when done together.
- The Birkman method – This leadership style assessment combines personality and behavioral assessments (such as communication styles and stress responses) to predict leadership tendencies and how well a person would fit into a team, which is essential for team alignment.
💡 Want to learn more about leadership styles? Check out these articles on democratic leadership and coaching leadership style.
3. Personality and leadership potential assessments
The following personality assessments focus on identifying personality traits that could influence leadership behavior, such as assertiveness and emotional intelligence.
They're useful for increasing self-awareness, but they're not great for training need analysis, as an individual's personality traits are relatively stable over time.
Here are some of the most popular assessments:
- NEO-PI-R (Neuroticism-xtraversion-Openness Personality Inventory-Revised) – This assessment measures personality traits based on the Big Five Model, and it focuses on five major domains of personality: Neuroticism, Extraversion, Openness, Agreeableness, and Conscientiousness.
- MBTI (Myers-Briggs type indicator) – MBTI identifies personality preferences and leadership tendencies by categorizing people into 16 personality types based on four spectrums: Extraversion/Introversion, Sensing/Intuition, Thinking/Feeling, and Judging/Perceiving. It helps you understand a person's decision-making style and communication preferences.
- Hogan personality inventory (HPI) – This leadership assessment test focuses on personality characteristics that are relevant to leadership potential, job performance, and workplace behavior. It's the first assessment tool based on the Five-Factor Model that was developed specifically for business settings.
- CPI 260 (California psychological inventory) – This assessment is often used to test people who are applying for leadership roles. It evaluates a combination of leadership and communication skills, as both of them are essential for executive positions.
4. Cognitive and decision-making ability assessments
These tools are used to evaluate cognitive skills such as logical thinking and problem-solving. While they can help predict leadership potential and a leader's effectiveness, they're not suitable for identifying training needs* as cognitive ability is difficult to develop through learning programs.
Here are some of the most famous cognitive assessment tests:
- Wonderlic cognitive ability test – This multiple-choice test lasts only 12 minutes, and it measures general cognitive ability and problem-solving skills. It's often used as a pre-screening tool in industries like finance and engineering.
- Raven’s progressive matrices – This test measures general intelligence, abstract reasoning, and overall intellectual capacity. It consists of puzzles where people have to identify patterns and complete missing pieces. It's widely used in education, the military, and corporate hiring to assess a person's ability to think logically.
- Watson-Glaser critical thinking appraisal – This test evaluates decision-making, problem-solving, and critical thinking skills by assessing the ability to analyze information and draw logical conclusions. It's commonly used for hiring in law and managerial roles.
*If you want to focus on skills that can be learned and improved, check out these employee development software instead.
5. 360-Degree leadership assessments
360-degree assessments are used to collect feedback from multiple sources in order to get an unbiased review of an employee and their leadership qualities. You can choose who can participate and provide feedback – surveys often include colleagues, managers, and both superiors and subordinates.
Those assessments can be used to increase self-awareness and discover opportunities for development, as they often highlight the difference between a person’s self-perception and the way others see them.
360 leadership assessments can be purchased as a separate tool, but they also often come as a part of performance review software.
Here are some of the best 360 leadership assessment tools:
- Leadership circle profile – This assessment tool analyzes feedback from multiple sources and uses it to create a leadership circle profile, a visual representation of an employee's competencies, behavior patterns, and relationships with colleagues. The employee also receives a personalized leadership development plan with actionable insights.
- CEB SHL leadership assessment – This holistic assessment tool, now part of Gartner, allows you to evaluate an employee from multiple perspectives. It can identify high-potential leaders and provide targeted development plans. For more accurate insights, it should be combined with other SHL assessments, including psychometric and personality tests.
- FIRO-B (Fundamental interpersonal relations orientation-behavior) – This assessment provides insights into how a person interacts with others in the workplace and leadership settings. It measures the three main interpersonal needs: inclusion, control, and affection. It's often used alongside the Myers-Briggs Type Indicator, as both assessments are now owned by the same company.
If you're looking for a comprehensive 360-degree solution that combines constructive feedback with actionable insights and personalized development plans, Effy AI may be the best performance management software for you.
With Effy AI, you can do leadership evaluation within minutes. Use our 360-degree feedback templates or let our AI assistant create custom questions based on your needs.
We'll then use AI to analyze all the feedback, providing you with actionable insights and tailor-made development plans for every employee.
💡 If you want to learn more, click here to discover how to conduct a performance review, or check out these 360 feedback examples
How to choose the right leadership assessment tool?
As you can see, there are many different types of leadership tools, just like with any other workforce management software. Some are general, and they measure broad leadership qualities, while others are focused on specific skills, industries, or roles.
Choosing the best leadership assessment tools depends on the specific needs of your organization or role. Here are the key factors to consider:
- Purpose: There are two categories of leadership assessments based on their purpose. First, we have tools for personal development, such as personality tests and self-assessments. Second, there are more complex tools that are used at a company level for succession planning and similar purposes.
- Depth of insights: Some tools measure general leadership traits, providing a broad overview of leadership potential, while others test specific characteristics or skills that may be important for a particular role. Many organizations combine both types of tools to get more accurate insights.
- Customization options: Check whether the tool can be adapted to fit industry-specific leadership models or organizational competencies. Some tools allow you to modify questions, add real-world scenarios from your industry, and integrate organizational values in your assessment.
- Cost and accessibility: Find the balance between the features and the price, and don’t forget that a higher price doesn’t guarantee that the tool is better. On the contrary, some popular tools are often more expensive just because of their branding, not because they have more advanced features.
If you want to maximize the impact of your leadership development efforts, choose an assessment tool that's aligned with your organizational and leadership goals.
As a small business owner, you don't have to invest in a dedicated leadership assessment tool right away. It might make more sense to opt for a broader performance management tool that evaluates overall employee development while still identifying leadership potential.
Click here to learn how to create an effective performance management system for a small business.
Benefits of using leadership assessment tools
Leadership assessment tools don't just benefit future leaders. They can create a ripple effect across the entire company. By identifying and developing strong leaders, you can create a more supportive and high-performing work environment where everyone feels motivated to grow.
Here are the biggest benefits you can expect.
1. Improved self-awareness and decision-making
Leadership assessments help employees understand their competencies and strong sides, as well as their vulnerabilities and skills that can be improved. They can also become aware of their leadership and communication style and the way other people perceive them.
On the other hand, those assessments provide HR teams with unbiased information about employees and their potential. That way, they can make succession decisions based on data instead of relying on intuition and subjective views.
2. Better team management and communication
Some leadership assessments help you identify personality types and communication preferences, both for managers and employees. Once you have this information, you can improve communication with your team and the way you motivate them.
Understanding whether someone is detail-oriented and analytical or more spontaneous and focused on the bigger picture allows you to adjust your communication style accordingly.
For example, if you're working with extroverted team members, you can use open discussions and brainstorming sessions to keep them engaged. On the other hand, an employee that’s more reserved may prefer structured one-on-one meetings with clear expectations.
As a leader, you can adapt your approach to motivate different types of people, encourage collaboration, and resolve conflicts efficiently.
3. Enhanced leadership development strategies
Leadership development tools allow you to identify skill gaps so that you can create targeted development programs based on the needs of individual leaders instead of investing in one-size-fits-all development programs.
If you recognize leadership qualities in the early stages, you’ll be able to focus your efforts on the people with the most potential. That way, you can make sure that future leaders receive adequate training and development opportunities.
{{banner-7="/banner-page"}}
Conclusion
As you can see, there are many different methods and tools that can help you identify and evaluate leadership qualities. To get a full understanding of an employee’s personality and leadership potential, you might need to combine multiple tools.
One of the most effective ways to do so is through 360-degree feedback, as it collects insights from peers, managers, and executives and creates a well-rounded picture of someone's leadership effectiveness.
With Effy AI, you can do that in minutes, plus you'll get AI-powered insights and development plans for each employee.
