Assessing & Selecting People For Cognitive Ability

Organizational design is ensuring that you have the proper organizational structure to carry out the strategy. The next step is the selection and development of people to work within the organizational structure. With current talent shortages that are becoming more acute every year companies will falter badly if they make too many mistakes by selecting key people who do not posses the cognitive ability to handle the complexity of their role.

One method to measure cognitive ability is to tie the complexity of the work to time span. Clerical and shop floor workers use their discretion to complete tasks assigned over days or a couple of weeks. Their manager will be working on tasks that won’t be completed for another three months to a year in the future. By the time you get to the CEO of large, complex organizations (IBM, Toyota) they are working to shape the corporation’s role in society for decades to come. The following table shows the organizational strata defined in terms of time span:

The concept of stratum allows you to build a structure that supports your strategy in two ways.

First, you can specify the stratum that your strategy requires for each role. There is a tremendous and measurable difference between a VP Marketing at stratum III, capable of designing advertising and promotional materials, and one at stratum VI who can work to build your global brand in a planned way over the next 12 years. Place the role too low and your strategy will fail. Place it too high and you will be wasting money on an over-qualified VP who is likely to expand the Marketing Department beyond where it is needed for your strategy.

Second, more than fifty years of research and experience make it clear that employees want to be managed by a manager one stratum above them. A manager at the same stratum as you makes you feel like they’re breathing down your neck. One who is two or more strata above you feels too distant; managers two levels up don’t want to slow down to coach you. Usually we see managers who micro-manage or who are too aloof as having a personality problem. In truth, these problems are merely symptoms of a poorly designed structure.

When selecting a candidate for a role, whether a CEO or front-worker, it is important to find someone who is willing to do the work and has the necessary skills. But most important, they must have the cognitive capacity needed for the role. Cognitive capacity is the individual’s ability to handle complexity, their mental horsepower, and it is critical for two reasons. First, while most of us gain in this dimension as we mature, there does not seem to be any way to accelerate its growth-you can’t fix someone’s cognitive capacity by sending him or her on a training course. Second, cognitive capacity is what allows an individual to succeed in a role at a given stratum.

For example the Board of Directors may desire to expand against stratum VI competitors and choose a strategy at VI or perhaps VII. They must therefore select a CEO capable of executing the strategy at VI or VII. Boards not using this management concept have no way to reliably distinguish a stratum VI-capable CEO from one capable at V.

In one recent example the corporate office promoted a stratum V capable Business Unit President and replaced him with a stratum IV individual. This misaligned Business Unit President was incapable of executing the strategy and removed the stratum IV level VPs and replaced them with stratum III-capable VPs. The new stratum III-capable VPs failed in their stratum IV VP roles. They pulled the level of work down to the level they could handle and thus sabotaged the corporate strategy for this business unit.

While IQ purports to measure this dimension, it actually correlates very little with success in the work world. Cognitive capacity, on the other hand, which looks at a person’s ability to organize, extrapolate and apply information to make decisions and solve problems, has been used successfully in many organizations to predict how senior a role an individual can succeed.

There are two methods of measuring and assessing cognitive ability. The first is to train the immediate managers and the managers-once removed to identify the cognitive ability level of the individuals that are being assessed for hire or for promotion. This can be accomplished in a 4-hour workshop. The other method is to have a highly trained consultant interview and assess the individual or individuals in question.

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