Leadership assessments for successors: are they worth it?

Leadership assessments can be worth it for a successor when they are used to start a development conversation, not to settle the question of readiness. Psychometric tests describe tendencies, 360-degree feedback shows how others see the successor, and assessment centres observe behaviour in simulated situations. Each has real strengths, and each has limits that are sharper in a family business, where the results are read by a parent and remembered by the family.

Founders often ask about assessment because it promises something objective in a decision that feels deeply personal. That instinct is understandable. The useful question is what each kind of assessment can and cannot tell you, and how to use it so it helps the successor rather than labels them.

What kinds of leadership assessment are there?

The field is large, but most tools fall into a few families.

Personality questionnaires. Self-report inventories that describe preferences and tendencies: how someone tends to approach people, risk, detail, pressure or change.
Ability and reasoning tests. Timed tests of verbal, numerical or abstract reasoning, sometimes used in hiring for senior roles.
Values and motivation inventories. What the person cares about and what drives them, which can matter when the role is one they were born into rather than chose from a list.
360-degree feedback. Structured ratings and comments from the people around the successor: a manager, peers, direct reports and sometimes board members.
Assessment centres. A set of exercises observed by trained assessors, such as a simulated meeting, a presentation, a role-play with a difficult employee or an in-tray of decisions.
Structured interviews. Interviews about past behaviour and decisions, conducted against defined criteria.

What do they do well?

Used carefully, assessments bring things a family cannot easily get on its own.

A common language. A good framework gives the successor, the parent and any coach or advisor the same terms for strengths and risks.
A view beyond the family. A trained assessor or a structured process sees the successor as a professional, not as somebody’s child.
Self-awareness. Many successors find it useful to see their own tendencies described clearly, especially the ones that only show up under pressure.
A starting point for development. A clear picture of strengths and gaps makes it easier to decide what to work on first.
Something to compare against later. Repeated after a year or two, some assessments can show whether a perceived gap has narrowed.

Where do they fall short?

The limits are general to the tools, and some become more pronounced in a family business.

Tendencies are not behaviour in a specific room. A questionnaire can suggest that someone avoids conflict. It cannot show what happens when a long-serving director challenges them in front of the board next month. Authority is built, or lost, in specific situations, and most tests sit some distance from them.

Self-report reflects self-perception. Personality inventories rely on how people describe themselves. A successor who is anxious to appear ready, or who knows the parent will read the results, may answer accordingly.

Candour is harder about the owner’s child. In 360-degree feedback, colleagues are often cautious about criticising someone who may soon be their boss, and in small teams anonymity is thin. How 360-degree feedback works for a family successor looks at that problem and how to set a process up so people are honest.

Simulations are not the real audience. An assessment centre observes the successor with actors or assessors who have no history with them. The difficulty in a family business is often precisely that history: people who knew them at fifteen, and a parent whose voice is the reference point.

Results can take on a life of their own. A report read at the family table can become a label. A single phrase about “low assertiveness” can be quoted for years, by siblings or by the parent, in ways the assessor never intended.

Quality varies. Instruments differ widely in how carefully they were developed and tested, and many are designed to be administered and interpreted by trained practitioners. A family should ask the provider what the tool measures, how it was developed and who will interpret the results. Claims about predictive power should come with the original research, not a marketing summary.

How should a family use an assessment?

If the family decides to proceed, a few principles make the result more useful and less risky.

Decide the purpose first. Development or selection? Using a development tool to decide whether the successor gets the job puts weight on it that it was not built to bear.
Involve the successor in the decision. An assessment done to someone produces defensiveness. One they chose produces curiosity.
Agree who sees what before anyone takes it. The successor should usually see their own results in full. What the parent sees, and in what form, should be settled in advance and in writing.
Use a qualified, independent practitioner. Someone who is not part of the family and not dependent on it, who can explain the results and their limits.
Combine methods. A questionnaire plus confidential interviews plus observation of real situations gives a more reliable picture than any one tool alone.
Turn it into a plan. An assessment that ends in a report and nothing else rarely changes anything. Tie the findings to specific development areas, real responsibilities and dates.
Keep it in proportion. An assessment is one input. The parent’s own observation, the senior team’s experience and the successor’s track record count too.

Where there are concerns about wellbeing, mental health or anything clinical, that is a matter for an appropriately qualified professional, not a leadership assessment.

What is the alternative to a formal instrument?

Some families find that the most useful assessment is not a test at all but a structured look at the successor in their real context.

Confidential stakeholder interviews. Short one-to-one conversations with the people the successor will lead, run by someone outside the family. What a stakeholder interview is explains how they work and why people often say more in them than on a form.
Recorded observation. The successor delivering a board update, an address or a hard conversation, recorded and reviewed. What people see is often more useful than what a score predicts.
A baseline and a repeat. The same exercise done at the start and again months later shows change directly.

How Second Chair™ approaches it

The Second Chair™ diagnostic is built on interviews and observation rather than a psychometric instrument. In the first two weeks it combines an intake with the parent, an intake with the successor, confidential interviews with three to five people such as senior executives, a board member and sometimes a sibling, and a recorded baseline of three scenarios done cold. The written diagnostic names the three patterns costing the successor the most authority, and the baseline is recorded again at the end so the change can be seen side by side.

In short

Psychometric tests, 360-degree feedback and assessment centres each offer something useful: a common language, an outside view and a starting point for development.
Their limits are sharper for a successor: tendencies are not behaviour in a specific room, candour about the owner’s child is hard, and results can become labels at home.
Decide the purpose, involve the successor, agree who sees what in advance, and use a qualified independent practitioner.
Combining methods, and observing the successor in real situations, usually gives a truer picture than any single instrument.

For how the diagnostic fits into six months of preparation, see the method page.