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Executive Intelligence - Book Review

1 December 2011
Dr. Moria Levy
book cover

"Executive Intelligence: What All Great Leaders Have" was written by Justin Menkes in 2005. This management book challenges the prevalent methods of selecting and promoting managers worldwide, often relying on classic measures such as interviews, personality tests, and emotional intelligence. The fundamental assumption is that an organization's success hinges on the quality of its personnel, particularly its managers. The book emphasizes the critical importance of how managers are selected, trained, and continuously developed at all levels.


The book covers the following topics:
  1. The importance of managers to business success

  2. Typical administrative errors

  3. Analysis of Accepted Executive Examination Methods

  4. Knowledge

  5. Management Intelligence

  6. Promotion


Surprisingly, surveys reveal that 80% of managers believe their colleagues frequently fail to achieve their goals, and 50% still determine whether their colleagues will ask the right questions when making decisions. Interestingly, everyone thinks they function pretty well themselves.


There's much to learn. Happy reading! And remember, while this summary captures the book's ideas, it's not a substitute for the detailed examples and content found in the book itself.


The importance of managers to business success

Organizations comprise numerous employees, and undoubtedly, the quality of each individual's work contributes to overall business and professional success. However, without a doubt, the nature of decisions made by the manager—the most senior figure in the organization—guides the entire entity, dictating its mode of operation.


Managers must possess the skills to pose insightful questions and employ critical thinking to discern organizational mistakes and determine necessary changes. Like any human being, managers are prone to errors, but what matters is their proactive pursuit of information. This proactive approach aids in identifying mistakes and shortcomings in their thought processes and actions—an endeavor that is neither trivial nor easily executed.


The significance of these qualities is high for every employee but is even more critical for managers, as there is no higher authority to examine or comment on their mistakes. The importance of proper managerial activity is twofold:

  1. Because they are the ones steering the entire ship.

  2. Because if they make a mistake, no one will be daring enough to correct them.


Reality demonstrates the challenge of finding individuals with clear thinking and adept critical thinking skills. However, when a manager possesses these qualities, the possibilities are likely limitless.


An intriguing observation is that, since operating alone is not feasible, managers who successfully cultivate sub-managers with similar qualities witness increased success, and the organization excels.


Typical administrative errors

Upon examining the nature of managers' activities and the pressures they face, it becomes evident that there are common errors among them. While it's crucial to acknowledge that most managers are neither lazy nor unintelligent, typical errors persist. The following are notable among them:

  1. Fast Decision-Making: Many managers elevate the speed of decision-making as a value. While quick decisions are not inherently harmful, insufficient data and analysis can lead to missed alternatives and crucial information.

  2. Handling Complex Problems: Managers often lack training in addressing and breaking complex problems into manageable components. This deficiency complicates decision-making, especially when faced with intricate and multifaceted issues.

  3. Trial and Error: The prevalent decision-making method involves trial and error, learning from mistakes, and adjusting course. While a unique feature of the human brain, excessive reliance on this approach can lead to impulsive decision-making without thorough consideration.

  4. Attack as a Defense: Human instinct often leads individuals to counterattack when faced with criticism. This tendency prevents managers from effectively listening to constructive criticism and inhibits their ability to receive valuable feedback.

  5. Past Experience-Based Solutions: Managers may choose solutions based on past experiences, relying on memory patterns. However, this approach can lead to misapplication, as only some situations align with past patterns.

  6. Biased Information: Information presented to managers is often biased due to personal agendas and subjective viewpoints. Filtering objective information becomes challenging, making it difficult for managers to make informed decisions.

  7. Over-Optimism/Overconfidence: Managers exhibit excessive optimism and confidence in their decisions, often due to a lack of thorough analysis. This overconfidence can lead to hasty decision-making and a higher likelihood of errors.

  8. Reliance on Available Information: Managers may rely on accessible information without seeking additional data. This inclination toward available details can result in quick decision-making without considering alternative perspectives.


Addressing these common errors is essential for enhancing managerial decision-making and ultimately contributing to organizational success.


Analysis of Accepted Executive Examination Methods

Today, various methods are employed and accepted for examining and selecting new organizational managers. These methods aim to assess managerial intelligence, predicting a manager's success in their role. Before introducing a new method, as detailed in the chapter on organizational intelligence below, it is essential to evaluate existing methods and their success rates and analyze any shortcomings.


Commencing with the observation that most managers believe they are performing well while their peers perceive a lack of satisfactory performance suggests that there is room for improvement. However, this general statement needs further examination to draw meaningful conclusions.


Historically, the selection of managers primarily relied on IQ tests, initially designed for the academic realm to predict academic success. While these tests can predict academic success, their efficacy in predicting managerial success is questioned due to the additional interpersonal, systemic, and other skills required for executive roles. Over the years, new testing methods emerged, starting with personality tests, then psychological interviews, and finally, interviews assessing managers' past behavior in similar situations.


Surprisingly, studies, particularly those by Brick and Mount, reveal that among these methods, IQ tests had the highest predictive percentage for managers' success in their roles:

  • IQ Tests: Predictive percentage close to 35%

  • Past Behavior Interviews (PBI): Predictive percentages 25%

  • Psychological Interviews: Predictive percentages of about 8%

  • Personality Tests: Prediction rates at 3%


This doesn't imply that IQ tests are ideal, as they only predict close to a third and miss two-thirds of success. However, a correct interpretation of the data indicates that their correlation with success is higher than other known predictors.


Emotional intelligence, closely related to personality tests, does not outperform them in prediction. Furthermore, once considered an essential trait for successful managers, charisma has been proven to be not necessarily central and can even lead to failures.


In summary, testing candidates' IQ instead of investing heavily in personality tests could yield ten times more success in managerial selection. Even the widely accepted Past Behavior Interviews (PBIs), although improving prediction success compared to preceding psychological interviews, may be redundant as IQ testing alone could potentially be more successful.


Knowledge

A manager's comprehension of the responsibilities and expectations in their role is undeniably a crucial component for success in the position. If a manager is unaware that effective communication and change management, not just decision guidance, are essential, their chances of success diminish. Similarly, if they lack the knowledge that addressing business problems may require calming the market, it poses a significant challenge for the organization. Therefore, theoretical and practical knowledge about the traits and behaviors of a successful manager holds immense importance for achieving success. It is estimated that knowledge of the job contributes to predicting 25% of success.


Many overlook that interviews focusing on past behavior (PBI) primarily assess the manager's knowledge rather than their abilities. When managers are asked questions like, "Describe how you would handle issue X" or "Tell us about how you dealt with issue Y," these inquiries target their knowledge of what is expected from a competent manager. Candidates vying for a management position won't voluntarily recount incidents (possibly presentations) where they lost composure and reacted negatively to an employee delivering bad news. Instead, they draw upon their memory to showcase a pattern of positive behavior, possibly embellishing it consciously or subconsciously to align with expectations.


Hence, behavioral interviews (PBIs) predominantly scrutinize a manager's understanding of the expectations in their role. While they are valuable, it's crucial to recognize that they do not necessarily indicate the candidate's past or present performance but rather their knowledge of the job and its expectations.


Management Intelligence

Many understand that knowledge is the foundation for success, yet it is universally acknowledged that it alone is insufficient. This leads us to the proposed theory, introducing a novel concept—managerial intelligence. Unlike knowledge, executive intelligence centers around an individual's potential to excel in their organizational role, specifically emphasizing critical thinking.


The crux of executive intelligence comprehension is recognizing that the previously mentioned parameters were indirect measures. While they gauged programming and abilities, offering indirect predictions of success, they did not directly measure success. The challenge, then, is to evaluate executive intelligence directly.


This is achieved by presenting managers with authentic scenarios, observing how they navigate these situations, and especially noting their critical thinking application. Although examining behavior might resemble comparative interviews, two crucial distinctions set it apart: a focus on critical thinking and an explicit requirement for respondents to elucidate every decision and course of action.


Decision-making in managerial roles often allows for multiple legitimate approaches. In contrast to logical inference tests where a singular correct answer exists, real-life situations permit diverse actions, each with advantages and disadvantages. The pivotal question in this context is "why." The respondent's reasoning behind a specific decision carries more weight than the decision itself. Through both the response and the rationale, insights into thinking processes, the depth of critical thinking, receptivity to self-critical thinking (regarding one's mistakes), and more can be gleaned.


According to the book's author, research findings indicate that managerial intelligence can independently predict an additional 25% of success, complementing existing knowledge. When combined, these two elements collectively expect 50% of success.


In current organizational practices, many large organizations conduct employee evaluation centers to identify individuals with management potential. These centers assess various aspects, including critical thinking, and some organizations report satisfaction with the predictive efficacy of these centers, as per the author's claims.


Promotion

Managerial intelligence is a pivotal criterion in selecting new managers, yet its utility extends beyond mere selection; organizations can leverage it for broader purposes. Given that critical thinking is a skill that can be cultivated, the opportunity exists for developing existing managers and employees displaying future managerial potential.


Simulations, the same tool employed for candidate assessment, can also serve as a means for improvement. A trained facilitator can collaborate with small teams or work individually with managers to simulate organizational scenarios. These simulations address critical thinking and guide managers toward its enhancement.


Delving into the realm of critical thinking steers individuals toward its intricacies. Examining the "why," rooted in Socratic learning principles (which emphasized questioning everything), effectively reinforces crucial thinking in practical scenarios.


The more advanced stage involves integrating critical thinking into the organizational framework, making it an integral part of the ongoing toolkit. The wisdom of Socrates, beyond imparting knowledge, reveals valuable insights into the development of managerial intelligence. This, in turn, not only contributes to acquiring more knowledge but, more importantly, fosters organizational success.

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