Self Assessment for CEOs in Improving Company Performance

Self-assessment is no longer foreign to companies, self-assessment is an assessment method to measure a person's ability based on certain indicators.

Based on research from McKinsey in the McKinsey Center for CEO Excellence, the CEO's influence contributes 45% in terms of improving company performance. Seeing how important the role of the CEO is in the company, the CEO should also conduct a self-assessment and improve his/her skills.

Why does the CEO need to conduct a self-assessment, what is the urgency, and how to implement it will be discussed in this discussion.

What is Self-Assessment for a CEO?

Referring to the meaning of the word assessment according to the Oxford dictionary, assessment means an assessment or estimation of a person's nature, quality, or ability.

So what is self-assessment? Self-assessment is an assessment of our abilities or qualities based on certain indicators.

By conducting a self-assessment, you can find out the gap or gap between the abilities you currently have and the abilities needed in your current job position.

For a CEO, self-assessment is also important. Because the CEO has a big influence on the success of a business or company, the CEO needs to continue to improve his/her abilities.

The CEO will also be seen by his/her employees as a role model from whom they can learn a lot of practical knowledge.

If the CEO does not improve his/her abilities, then how will the employees be able to follow in his/her footsteps?

Indirectly, when the CEO continues to improve his/her abilities and knowledge, it will form new leaders who are inspired by him/her.

Why Do CEOs Need to Conduct Self-Assessments?

Referring to the results of McKinsey's research in the McKinsey Center for CEO Excellence CEAT Database, the biggest challenge for a CEO is interacting with the board of directors, connecting with policy makers, and allocating resources.

In the research, CEOs have the advantage in managing their personal effectiveness, but when it comes to dealing with the board of directors and policy makers, they still find it difficult.

Many CEOs feel less confident in establishing and prioritizing relationships with key stakeholders.

Through self-assessment, CEOs can remap who the key external actors are and develop a more proactive and impactful engagement strategy for the company.

Self-assessment is an important tool for a CEO to honestly evaluate the effectiveness of his/her leadership in carrying out the four main functions of executive leadership, namely determining direction, aligning the organization, building relationships with stakeholders, and managing oneself.

Thus, the main purpose of self-assessment for a CEO is not just to assess past performance, but to identify areas of improvement that may have been overlooked due to internal bias, job pressure, or old habits.

How do CEOs assess their own performance?

There are various ways for CEOs to assess their own performance. The CEO performance assessment will focus on the strategic level.

The factors assessed in the CEO performance assessment are not only about the CEO's vision and mission, but also about the capacity to make cross-functional decisions that have a major impact on the company's future.

Therefore, the aspects that need to be evaluated at the strategic level concern competencies in the following aspects:

Finance

The financial assessment will assess and evaluate the CEO or leader's ability to the company's financial structure, cash flow management, financial risk, investment decision making, and value creation for shareholders.

A CEO is responsible for the growth of the company's value and long-term financial health. A deep understanding of financial aspects allows the CEO to make sound data-driven decisions, such as capital allocation, cost control, profitability analysis, investment and financing planning.

If the CEO does not have the right assessment from a financial perspective, then the CEO is at risk of making misguided decisions, such as unmeasured expansion or investments that do not generate adequate returns on investment.

Commercial

A competency assessment in the commercial area will measure the CEO's ability to understand market dynamics, manage product portfolios, form pricing strategies, and maintain the company's commercial competitiveness.

With rapid market disruption and development, the CEO needs to provide direction or adaptation that allows the company to remain relevant to market dynamics.

When the CEO continues to sharpen his strategic skills in the commercial area, he will make decisions not only based on intuition, but also on strategies based on strong market analysis to drive revenue growth.

Human Capital

Leadership skills are the main skills that a CEO must have. Assessment in this human capital area will examine the CEO's leadership in managing talent, building organizational culture, increasing employee productivity, and developing a competitive performance management system.

Assessment in this area is important for the CEO, because human resources are the main element in a company. Quality human resource management will produce quality company products.

By conducting a self-assessment in the human capital area, the CEO will be able to evaluate the management of human resources, not only operationally, but also about how to build a work culture that encourages these human resources to become the best version of their performance.

Operation (Operational)

The assessment in the operational aspect will assess the CEO's effectiveness in managing business processes, supply chain efficiency, quality control, and operational scalability in supporting company growth.

This assessment is important because no matter how great a strategy is, it will fail if it is not supported by a solid, efficient, and scalable operational process.

With this aspect assessment, the CEO will be able to see the gaps that occur in the operational area. So that they can determine a strategy to eliminate these gaps.

Technology (Technology)

Since the COVID-19 pandemic hit, the implementation of technology in a company has become a necessity. For this reason, the technology area competency assessment will assess the CEO's understanding of digital technology and the digital transformation needed to support innovation, efficiency, and data and system security.

This technology area assessment is important because many business failures today are not due to a wrong vision, but because they are slow to adapt digitally or fail to execute a comprehensive technology transformation.

What is the urgency of assessing CEO competencies in these five areas? Here is the urgency:

Cross-Functional Competency Reflection

Self-assessment in the five essential areas provides an objective picture of strengths and areas for development across strategic business functions.

Encourage More Data-Based Decision Making

This assessment will help align decisions for the CEO with strong data and insights from various organizational perspectives.

Improve Development Priority Mapping

The results of this assessment become the basis for the CEO to follow an executive development program or mentoring that is truly relevant to the identified gaps.

Increase Board & Investor Trust

Recommendations from this assessment will help increase the credibility of the CEO as a leader who is not only intuitive, adaptive but also systematic and measurable in making decisions.

Improve Company Performance with Personalized Self-Assessment for Your Company Leaders' Needs

From the explanation above, self-assessment is not only important for company employees, but even more important for CEOs or managerial leaders in the company.

Strategic assessments in five essential business areas in Prasmul-Eli are called the Strategic Qualification Assessment Program.

The Strategic Qualification Assessment Program is designed for company managerial leaders to improve technical capabilities at the management or strategic level.

With a data-based approach and standardized evaluation methods, the Strategic Qualification Assessment Program (SQAP) helps leaders understand where their current strengths lie, and which aspects still need to be improved to face increasingly complex business challenges.

In today's era of uncertainty and digital acceleration, a leader's ability to balance technical skills and strategic leadership is the key to a company's competitive advantage to continue to improve its performance.