Top 5 Leadership Assessment Tools for Small Business Leaders in the Age of AI, and Which One Ranks #1

In times of insanely smart AI, big data, and workforce automation, it’s more important than ever for small businesses to be agile and future-focused. Because small business leaders are often stretched for time and resources, and work in fast-paced environments that are hyper-focused on product development, customer service and cash flow, they don’t always have the luxury of being able to identify and improve the leadership skills that will help ensure the long-term resilience of them and their teams. That’s where leadership assessments can have a significant positive and tangible impact.

When properly selected and implemented, leadership assessments are great tools to help leaders:

• Understand their strengths and weaknesses
• Increase their overall self-awareness
• Communicate more effectively
• Better anticipate and adapt to change
• Improve conflict management
• Improve delegation
• Build overall higher performing teams
• Increase creativity, productivity and innovation

In other words, assessments can be used to help leaders hone their skills and also build strong teams that are prepared for the challenges of the changing business landscape that will be increasingly impacted by automation, AI, and global socio-economic forces.

In this article, we’ll take a deeper dive into five of the most commonly used assessments, and I’ll conclude by sharing which one I think best future-proofs leaders for the times of rapid change ahead.

Review of 5 of the Most Popular Leadership Assessments

Below is a summary of the top 5 most widely used leadership assessments. A couple of comments before we dive in… 

First of all, there’s a wide range of assessments to meet different organizational needs. Rather than being a fully comprehensive list of all assessments, this is a “short list” of the most popular…mostly due to their impressive ability to be practical and useful tools to senior leaders in a wide range of companies.

Secondly, in the interest of full disclosure, I am certified to administer three of the five assessments listed below (MBTI, Hogan, and EQ-i). I am not, however, a paid affiliate for any of them and receive no financial benefit from writing this article. I’m certified in them because I consider them to be best-in-class, and my clients have benefited greatly from them!

Ok…with the housekeeping out of the way, let’s get started…

1. Myers-Briggs Type Indicator (MBTI)

The Myers-Briggs Type Indicator (MBTI) is a personality assessment that measures preferences in how people perceive the world and make decisions. The MBTI assessment has a history spanning more than 75 years, and for more than 40 years has been available for use and application by organizations, educational institutions, government agencies, MBTI practitioners, and individuals in order to understand and make constructive use of personality type differences. Today, the MBTI assessment is used in 115 countries, is available in 29 languages, has been used by 88 of the Fortune 100 within the past five years, and is taken by millions of people worldwide.

The MBTI is based on the theory of psychological types, which was developed by Carl Jung, and measures four different preferences for each individual:

• Extraversion (E) vs. Introversion (I)
• Sensing (S) vs. Intuition (N)
• Thinking (T) vs. Feeling (F)
• Judging (J) vs. Perceiving (P)

Each person has a unique combination of these four preferences, which results in one of 16 personality types. The MBTI is one of the most popular personality assessments in the world. It is relatively easy to administer and score. The MBTI can be used for a variety of purposes, including leadership development, team building, and personal development.

Pros

• Easy to understand and interpret
• Provides a common language for discussing personality differences
• Offers valuable insights into individual communication styles and decision-making preferences

Cons

• Could be perceived as overemphasizing dichotomies and neglects the complexity of human behavior
• May lead to overgeneralization

2. DiSC Assessment

DiSC is a personality assessment that measures four different behavioral styles: Dominance, Influence, Steadiness, and Conscientiousness. DiSC is used for a variety of purposes, including team building, conflict resolution, and sales training. 

The DiSC assessment is based on the theory of personality developed by William Moulton Marston, who believed that there are four basic personality types: Dominance, Influence, Steadiness, and Conscientiousness. These four types can be represented by four quadrants on a DiSC profile: 

• Dominance: People who are high in Dominance are typically assertive, confident, and decisive.
• Influence: People who are high in Influence are typically outgoing, persuasive, and enthusiastic.
• Steadiness: People who are high in Steadiness are typically loyal, reliable, and supportive.
• Conscientiousness: People who are high in Conscientiousness are typically organized, efficient, and detail-oriented.

DiSC is a well-validated assessment with a strong track record of success. It is used by a wide range of organizations, including Fortune 500 companies, government agencies, and educational institutions. DiSC is available in multiple languages.

Pros

• Simple, user-friendly design
• Provides practical recommendations for improving workplace relationships and communication
• Allows for customization and tailoring to specific organizational needs

Cons

• May oversimplify complex behaviors and preferences
• Lacks depth in addressing personal values, motivations, and cognitive processes

3. The Leadership Practices Inventory (LPI 360)

The Leadership Practices Inventory (LPI) is a sophisticated and widely acclaimed 360-degree feedback instrument that has been meticulously designed to assess, develop, and strengthen the leadership behaviors essential for effective and impactful leadership in various organizational contexts.

Developed by renowned leadership experts James M. Kouzes and Barry Z. Posner, the LPI is grounded in their extensive research and the proven framework presented in their best-selling book, “The Leadership Challenge.” The LPI evaluates an individual’s leadership competencies across five key practices: modeling the way, inspiring a shared vision, challenging the process, enabling others to act, and encouraging the heart. 

By gathering insights from the individual as well as from their supervisors, peers, and subordinates, the LPI provides a comprehensive and nuanced perspective on an individual’s leadership strengths, areas for improvement, and the impact of their behaviors on others. The in-depth feedback and targeted development recommendations offered by the LPI empower leaders to build self-awareness, enhance their leadership effectiveness, and foster a culture of continuous growth and development within their organizations.

As a result, the Leadership Practices Inventory has become an indispensable tool for organizations worldwide, striving to cultivate and sustain a high-performance leadership culture in an increasingly complex and competitive business environment.

The Leadership Practices Inventory (LPI) is a 360-degree assessment tool that measures how well a leader demonstrates the five practices of exemplary leadership:

• Model the Way
• Inspire a Shared Vision
• Challenge the Process
• Enable Others to Act
• Encourage the Heart

 The LPI is used by a wide range of organizations, including Fortune 500 companies, government agencies, and educational institutions.

Pros

• Research-based and empirically validated
• Focuses specifically on leadership behaviors and practices
• Offers actionable insights for improving leadership effectiveness

Cons

• May not provide a comprehensive view of an individual’s personality or preferences
• Depends on the quality of feedback from observers
• Requires commitment to ongoing development and practice

4. The Hogan Leadership Forecast Series (LFS)

The Hogan Leadership Forecast Series (LFS) is an innovative and comprehensive suite of assessment tools, specifically designed to evaluate and develop key leadership competencies that drive organizational success.

Developed by Hogan Assessments, a leader in personality assessment and research, the LFS combines three powerful and scientifically validated instruments to offer a multidimensional perspective on an individual’s leadership potential, risk factors, and core values. 

• The Potential Report provides an overview of a leader’s strengths and areas for development, as well as their overall leadership potential.
• The Challenge Report identifies potential derailers, or behaviors that could hinder a leader’s success.
• The Values Report explores a leader’s core values and goals, and how they impact their leadership style.

By capturing an individual’s strengths, potential derailers, and underlying drivers, the LFS enables organizations to make more informed decisions in the selection, development, and promotion of leaders across various levels and functions.

Furthermore, the LFS reports provide actionable insights and targeted development recommendations to help individuals enhance their leadership effectiveness, better navigate the challenges of their roles, and ultimately contribute to the overall performance and growth of their organizations.

As a result, the Hogan Leadership Forecast Series has become a widely recognized and trusted tool for identifying, nurturing, and retaining top leadership talent in today’s competitive and ever-evolving business landscape.

This series is well-validated with a strong track record of success. It is used by a wide range of organizations, including Fortune 500 companies, government agencies, and educational institutions. The LFS available in multiple languages.

Pros

• Grounded in research and widely recognized for its validity and reliability
• Can predict leadership performance and potential for development

Cons

• May be more complex and time-consuming to administer and interpret compared to other assessments
• Requires a trained professional to debrief results and facilitate development
• Cost may be higher than other assessments

5. Emotional Intelligence (EQ-i 2.0) Assessment

The EQ-i 2.0 assessment tool is the world’s leading measure of emotional intelligence, which has been developed through years of research to help individuals enhance their leadership, personal, and professional growth. Based on over 20 years of global research, it is an online self-assessment that consists of 133 items, designed to evaluate various aspects of emotional and social functioning, such as self-awareness, self-regulation, social awareness, and relationship management.

The EQ-i 2.0 measures five different emotional intelligence domains:

• Self-awareness
• Self-management
• Social awareness
• Relationship management
• Emotional self-efficacy

Each domain is further divided into subscales, which provide a more detailed look at your emotional intelligence strengths and weaknesses. The EQ-i 2.0 is a well-validated assessment with a strong track record of success. It is used by a wide range of organizations, including Fortune 500 companies, government agencies, and educational institutions. The EQ-i 2.0 is available in multiple languages.

Additionally, the EQ 360 version is available, which involves feedback from multiple raters, including peers, supervisors, and direct reports, to provide a more comprehensive understanding of an individual’s emotional intelligence.

Pros

• Recognizes the importance of emotions in leadership and decision-making
• Encourages self-awareness and emotional regulation, leading to more effective leadership
• Offers practical strategies for improving emotional intelligence

Cons

• May not be as comprehensive as other assessments in evaluating overall leadership effectiveness
• Relies on self-reporting, which can be influenced by biases and self-perception
• Limited focus on cognitive aspects of leadership and personality

What’s the Most Effective Assessment for Small Business Leaders?

The “best” leadership assessment tool will depend on your organization’s needs and preferences. That said, considering the pros and cons of each assessment, I believe that the Hogan Leadership Forecast Series emerges as the most effective tool for helping leaders be effective in the future of business. Here’s why:

• Comprehensive focus on leadership: Hogan assesses both leadership strengths and potential derailers, offering a well-rounded perspective on an individual’s leadership capabilities. This focus enables leaders to capitalize on their strengths while addressing potential challenges.
• Research-based and empirically validated: Hogan is grounded in extensive research and has been empirically validated, lending credibility to its results. This rigorous foundation ensures that leaders can trust the feedback they receive and use it to drive meaningful improvement. 
• Predictive analytics: Hogan’s use of predictive analytics sets it apart from other assessments, allowing organizations to identify future leaders and proactively address potential areas of concern. This foresight can be invaluable in the rapidly changing business landscape.
• Tailored development: The Hogan assessment provides personalized insights and recommendations, enabling leaders to create targeted development plans that address their unique needs and maximize their potential.
• Balance of strengths and derailers: By considering both strengths and potential derailers, Hogan offers a balanced perspective that encourages leaders to be aware of their weaknesses without losing sight of their strengths. This approach promotes well-rounded leadership growth and effectiveness.

Wrapping Up…

The Hogan Leadership Forecast Series stands out as the most effective leadership assessment for the future of business. Its comprehensive focus on leadership, research-based foundation, predictive analytics, tailored development, and balanced approach to strengths and derailers make it a powerful tool for equipping leaders to excel in today’s dynamic and competitive environment.

To wrap it up…leadership assessments are a valuable tool for small business leaders. By understanding their own personality type and those of their employees, they can better understand how to communicate effectively, delegate tasks, address conflict, manage change, and build an overall robust team. In other words, assessments can be used to develop a team that is well-suited to the challenges of the changing business landscape that will be increasingly focused on dealing with rapid changes in automation, AI, and global socio-economic forces.

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The Future-Proof Business helps small businesses become future-proof by showing them how to anticipate and pivot around the trends that will impact their competitiveness in the future, and then implement the tools and technologies that will ensure their long-term profitability. Visit our Consulting or Leadership Development page to learn more, or contact us so we can explore how your business may benefit from the rapid advances in technology.