What Makes a Successful Leader? And How to Identify the Personality Traits of a Leader

Identifying the best people for leadership positions is one of the most critical tasks facing business owners – because those people can make or break a business!

Not only does hiring the wrong leader cost time and money in the recruitment process, it also has a knock-on effect across the entire organisation. Smart CEO, back in 2017, reported that poor leadership can cause a 5-10% productivity drag in businesses – and when we’re all working in a highly competitive global marketplace, that 5-10% can translate into HUGE amounts of money.

Identifying the right leaders who have the right personality traits to succeed in a leadership role can prevent those massive losses, increase employee engagement, reduce staff turnover, and, ultimately, make the success of a business more likely.

But is it possible to identify leaders based on personality traits? And what does a successful leader’s personality look like? Here, we’ll be looking at the red flags and green flags when it comes to identifying potential leaders based on personality traits.

What is personality and how is it measured?

Ah, personality. We talk about personality every single day, because it’s what our approach to business psychology is largely based on. And all of us have at least a colloquial understanding of what personality is. 

But what exactly is it? What does it mean in the world of business? And can we reliably measure it?

Our friends across the Atlantic at the American Psychological Association define personality as follows:

“Personality refers to individual differences in characteristic patterns of thinking, feeling and behaving.”

And that’s a pretty good summary! When it comes to business psychology and using personality to help improve workplaces, we look at the personality traits of individuals and how those traits result in workplace behaviours – and through team or individual coaching, we’re able to help identify strengths to maximise workplace performance and reduce the negative impact of blind spots.

Measuring personality is a little trickier – but as a discipline, psychometrics (the science of measuring mental capacities and processes) has come a long way since the development of the first personality test way back in World War One.

Since then, a lot of personality tests have been based on The Big Five theory of personality, which states that every individual’s personality traits fall into five main areas:

  • Openness to experience: often accompanied by an appreciation for art, adventure, imagination and curiosity. Typified by creativity, a higher propensity for risk-taking and seeking out new experiences.
  • Conscientiousness: often realised in a sense of self-discipline, dutifulness and rule-abiding behaviours. Typified by higher impulse control, better emotional regulation and reliability.
  • Extraversion: individuals who score highly on extraversion are more likely to be sociable and enjoy the company of others. They feel energised by external things, while low extraversion scorers will be more reserved and prefer their own company.
  • Agreeableness: focuses on social harmony, with high-scorers being dutiful, trustworthy, and putting others’ needs before their own.
  • Neuroticism: this refers to the tendency to experience negative emotions, including anger, anxiety and depression. High-scorers are more likely to react emotionally to negative situations and be unable to handle high levels of stress.

Personality tests that use The Big Five theory score individuals either on those five scales directly or on derived personality factors that can be traced back to The Big Five. The interaction of scores on each of these scales determines an individual’s likelihood to behave in particular ways in particular contexts.

Personality using this method is seen as a trait-based model, not a type – which means that each of us has some elements of all five personality factors and we land somewhere on a spectrum for each. Type-based personality theory differs because it determines that individuals are a particular single type, rather than falling on a continuum of personality.

Now, there are thousands of measures of personality out there in the world. Not all of them are scientifically robust, however – and we’ve spoken a little about that before, which you can read here. [NB: needs link for May’s blog post BEFORE PUBLISHING!] Not all of them are directly based on The Big Five, but many are – simply because The Big Five theory is one of the most well-respected and well-researched models of personality there is to this day.

The measures we’ll focus on here are all incredibly robust, reliable and well-validated, and relied upon by business psychologists across the world to identify the personality traits of leaders.

Which personality traits are associated with successful leaders?

As we’ve seen, all of us fall somewhere on the spectrum of personality traits, which means that every single one of us is unique. Our traits interact with each other and with our experiences to result in behaviour.

But that doesn’t mean that it’s impossible to identify particular personality traits that make successful leadership more likely. So what are the personality traits that successful leaders tend to have?

Effective communication

One of the most important factors of successful leadership is the ability to communicate effectively, both with team members and other leaders.

Communication is a particular challenge in remote or hybrid working environments, but the personality traits underlying effective communication remain the same.

Generally speaking, effective communication is associated with Openness to Experience in The Big Five Model. If a leader scores highly on openness, they’re more likely to feel at ease in their leadership position, allowing them to communicate more openly and effectively with their team, even during tough times.

An effective communicator as a leader is more likely to earn the respect of their team, by being able to engage in conversations, tackle tough things, and think about creative solutions to problems being faced. A more engaged team means a more productive and impactful workforce – which means more business success!

Emotional intelligence

Emotional intelligence (which we measure using the EQ-i 2.0 assessment)  is one of our favourite things to use in leadership development – because it covers so many soft skills that a) are incredibly impactful in the workplace, and b) often get forgotten about in the desire to focus on hard skills and make data-driven decisions.

But emotional intelligence does really matter when it comes to leadership. Particularly in the modern workplace, where talent is in high demand and businesses have to find some sort of competitive edge in their industry, empathy is a vital skill.

Being an empathetic leader means that you’re able to relate easily to the situations around you. Instead of thinking your way is the right (and only) way, an empathetic leader will be able to see the situation from multiple perspectives and reach a conclusion that supports everyone’s needs. A team led by an empathetic leader will likely feel understood, heard and supported, even when tough decisions are being made.

If you’re new to emotional intelligence, we’ve got just the thing… ‘What is emotional intelligence and how does it help at work?’

Stress management

Being a leader can be incredibly stressful, that much is clear. And that fact is unlikely to change anytime soon.

But what really matters is how a leader responds to that stress – and that can be accurately predicted by personality traits. Being able to handle stressful situations is a soft skill, but one that has associations with a few Big Five factors of personality.

For example, an individual scoring highly on the Neuroticism factor might struggle to handle stress, because their reactions and responses are more likely to be based on negative emotions and they’re also more likely to experience emotions more intensely. 

Individuals scoring highly on the Conscientiousness scale are more likely to manage their reactions more effectively, as they may be hyper-focused on maintaining a positive reputation and hitting targets and goals without derailing.

And at the opposite end of the spectrum, individuals scoring highly on Agreeableness are likely to be so keen to keep the peace that they might go out of their way to actively avoid confrontations that arise from stressful situations – even when necessary.

When leaders are able to manage their stress more effectively, team members are able to mirror their calm reactions to stressful events, instead of feeling the need to walk on egg shells as they aren’t sure when the next emotional outburst may be.

Resilience

Resilience, or bounce-back-ability, is a leadership trait that has grown in popularity over the last few years. Particularly during the pandemic and the near-constant adaptations we all had to make to our work and personal lives, the ability to remain steady and not get overwhelmed or blown off course by change has become vital.

For leaders, being resilient means being able to take on challenges, adapt, be creative in finding solutions, and keep a steady course during turbulence. While there are many measures of resilience specifically out there (we use the Workplace Resilience And Wellbeing (WRAW) assessment), resilience is generally associated with low levels of Neuroticism and higher levels on the remaining four personality factors.

Being resilient means being adaptable, and that adaptability serves business incredibly well in challenging times. Leaders without resilience are likely to struggle with change, find it difficult to adapt, and take longer than necessary to get back on track after a setback.

Are there any personality traits that indicate bad leadership?

Now that we know the signs of a good leader, are there any personality traits that indicate poor leadership?

It turns out, the answer is yes. In large part, the red flags are the opposite end of the green flag scales – but it’s helpful to identify the specific impacts of those traits so that blind spots can be focused on during leadership development training and coaching.

Low emotional intelligence

Just like highly emotionally intelligent individuals are more likely to make successful leaders, individuals with low emotional intelligence are sometimes a cause for concern.

With low emotional intelligence, it’s likely that a leader will struggle with empathy, communication and maintaining a level head in negative situations. When a leader displays their lack of emotional intelligence in a team situation, team members are likely to feel disconnected from their leader and potentially disengaged from the company as a whole.

Poor stress management

If an individual, due to lack of emotional intelligence, is unable to manage stress well, they may not be suited to a leadership role.

Leadership not only involves managing your own stress, but also taking on board the stresses of team members too – if an individual with poor stress management is in that leadership role, they’re more likely to display irrational and volatile behaviour in those stressful situations, reacting from a place of emotion rather than logic.

Team members being led by an individual with poor stress management skills are likely to act reserved and withdrawn, out of fear of volatile reprisals.

High Neuroticism

Scoring highly on the Neuroticism scale of the Big Five personality factors is associated with experiencing negative emotions strongly. Leaders who score highly on the Neuroticism factor may be overly sceptical, reluctant to change, and experience high levels of anxiety during any period of unease or upheaval.

These leaders might also find it difficult to regulate their moods, because they’re experiencing a myriad of strong emotions internally. They may have reduced capacity for resilience, meaning that it takes longer than usual to recover after setbacks.

Low Openness to Experience

Finally, scoring on the low end of the Openness to Experience factor is likely to make it even more difficult to manage periods of change. Leaders with this personality trait will find it challenging to manage organisational change and would prefer to maintain the status quo.

With a personal preference for avoiding change, leaders who are tasked with transformational or change-based tasks within their teams may struggle to encourage team members to accept necessary changes. Leaders are likely to be resistant to new ideas, particularly those brought to them by team members, and are likely to create an environment where creativity feels stifled.

Can leadership traits be developed?

If leadership effectiveness can be indicated by personality traits, as we’ve seen here, is effectiveness set in stone? Or can it be developed through coaching or leadership development support?

This question goes back to the ongoing debate in psychology about whether personality is changeable or not. For those that believe personality is determined by nurture alone (i.e. genetics), personality is fixed from birth and not subject to change during an individual’s lifetime. But for those that believe personality is determined by nature and nurture, an individual’s environment, experiences and knowledge all have an impact on personality.

What is certain is that there is a huge ROI to be found in programmes that develop leadership skills. Particularly when those programmes focus on soft skills like emotional intelligence, leadership development has been seen to transform leadership practices within a business. While it’s difficult to calculate a specific monetary ROI, it is possible to see that developing positive traits in leaders will help teams to perform better, be more engaged, reduce staff turnover and generally make the business more likely to be successful and profitable.

In our experience at KinchLyons, 1:1 coaching and development sessions with leaders helps to maximise their existing strengths and mitigate the impact of blind spots – which helps to facilitate better relationships with team members and has a tangible positive impact on the wellbeing of the entire team.

Outside of personality and psychology, there are clearly many areas of leadership where specific skills are needed – and these skills can be taught and developed over time. It’s important for businesses to consider the impact of combining personality-based coaching with skills-based teaching, so that leaders are developed in a well-rounded way.

So, what have we learned about the personality traits of successful leaders?

Quite simply, we’ve learned a LOT. We’ve seen that there are clear green and red flags when it comes to personality traits and leadership potential – but what we’ve also seen is that personality is a complex topic.

What’s important to note is that identification of potential leaders should never be based solely on the results of personality assessments. Combining those assessments with interviews, analysis of past performance and cultural fit can help to identify leaders who are likely to be successful – but just personality tests alone only give you one element of that person’s likelihood to succeed.

There’s no ‘template’ for a perfect leader, but by understanding the personality traits that contribute to effective leadership we’re better able to support future leaders through developing their positive traits and mitigating any negative ones. Through leadership development coaching, using personality traits as a foundation, we’re able to help businesses to strengthen their leadership team and make organisation-wide improvements to employee engagement.

To find out more about our leadership development coaching, visit our Talent Services page or drop us a line for a chat!

How to Use Psychological Tests in HR

We’re taking things back to basics today and asking the important questions:

  • What are psychological tests?
  • How can psychological tests help in selection and recruitment?
  • How can psychological tests help in people development?

We work with psychological tests, psychology and HR every single day. Which means we’re fully aware of how effective psychological testing can be in the workplace and how wide the range of applications is.

But if you’re an HR professional who hasn’t yet dipped their toe into the (sometimes daunting) world of psychological testing, we’re here to help. Keep reading to learn why you need to add psychological testing to your HR toolkit, stat!

What is psychological testing?

Psychological testing, aka psychometrics, is the systematic use of tests to quantify psychophysical behaviour, abilities, problems and to make predictions about psychological performance…

… or so says the Encyclopedia Britannica.

In layman’s terms, psychological testing or psychometrics is a type of testing that gives us scientifically rigorous and reliable insights into someone’s abilities, personality and psychological functioning.

In the business world, psychometrics are used to give employers an indication of the psychological inner workings of their employees – not in a creepy stalker way, but in a way that helps them to identify talent, create more effective working environments for their staff, and build high-performing teams that communicate effectively with each other.

At KinchLyons, our psychological testing focuses largely on aptitude, personality and emotional intelligence – all of which we use with clients to either help identify the right person for the right role or to inform coaching practices that help individuals to develop self-awareness and other workplace skills.

… but are psychological tests reliable?

Now, we can’t talk about psychological testing and psychometrics without mentioning the elephant in the room: the glaring fact that some people don’t believe in their accuracy or utility…

We don’t want to get into a full-blown academic debate here, but we do want to reassure you that every psychometric test we use here at KinchLyons is rigorously tested for reliability and validity. 

While there are certainly some psychological tests out there that rest on rocky foundations and might not stand up to real scrutiny, there are plenty that will. The key is to identify psychological tests that have been subjected to peer review – and succeeded.

In the UK, the British Psychological Society (BPS) is the top governing body when it comes to reliable, valid and rigorously tested psychological tests. BPS-verified tests are submitted to a barrage of testing and are peer-reviewed by a board of experienced psychologists, meaning that any test that has officially been verified by the BPS is reliable, valid and can be trusted in its intended area of practice.

There are similar bodies across the world that verify the huge number of psychological tests that are created and used every year – and every psychometric that we use at KinchLyons has been verified by at least one of these professional bodies.

By using psychological tests that are verified and reliable and valid, and by completing the relevant certification for administering and interpreting test results, you can rest assured that the psychometrics you’re using are fit for purpose.

Using psychological testing for selection & recruitment

One of the main roles fulfilled by an HR department is finding the right person for the role. Whether it’s an internal hire or an external recruitment campaign, finding a candidate who meets the experiential requirements of a role and fits in well with the team and has the potential to be a positive asset to the business can be tough – and that’s where psychological testing can help.

The benefits of using psychological testing for recruitment

The cost of a bad hire for a business is in the region of €60k (£50k). That’s a huge amount of money, even for a big corporate giant.

So how does using psychological testing help to mitigate the risk of making that costly mistake?

First up, we all know how easy it is to bend the truth on CVs and to present an inaccurate impression of ourselves in an interview situation. It’s human nature to put our best foot forward and keep those slightly less favourable qualities under wraps.

But, as a recruiter, it’s your responsibility to know how a candidate will actually perform in the role you’re hiring for – not just how the candidate thinks they’ll perform. And that’s where psychometric testing comes in handy.

By introducing psychological testing into the recruitment process, you’re achieving two things that will help you to prevent making that €60k mistake:

  1. You’re placing less reliance on interviews and CVs. Not only does that mean you’ve got more data to base your hiring decision on, but it also means that you’re reducing the risk of bias getting in the way of making an objective decision. Interviews (particularly if they’re ‘casual’ unstructured interviews) are notoriously difficult to make objective, because they’re two or more personalities connecting in a relatively short period of time. First impressions really do count, and personal opinions and ‘connection’ play a big role in how a candidate is perceived in an interview situation, regardless of their ability to do the role in question.
  2. If you’re using personality-based psychometrics, you’re getting an insight into who the candidate is and how they’re likely to fit into the team, not just what they can do. Skill and competence is only one part of the equation, particularly in team or high pressure environments – personality and the ability to manage emotions, assess risk and communicate effectively with teammates is arguably more important (and less teachable) than the skill itself. By using psychological testing, you’re able to gain a deeper insight into the real person behind the CV.

Given the choice between hiring the wrong person and costing the business €60k or using psychometric testing and making a hire based on more than just a 20-minute interview, we know which one we’d choose!

The DOs and DON’Ts of using psychological testing for recruitment

Using psychometrics for recruitment and selection processes isn’t foolproof. It doesn’t guarantee finding the perfect candidate for the role every single time, but it does reduce the risk of making the wrong decision – if psychological testing is used properly.

There’s a lot that goes into proper use of psychometrics, including test-specific qualifications, but here are some basic DOs and DON’Ts if you’re a complete beginner in the field of psychological testing.

The DOs of using psychometrics for recruitment

  • Use psychometric tests as a part of the recruitment process.
  • Be clear and upfront with candidates about the purpose of the psychological testing and what the results will be used for, paying particular attention to following data protection and privacy regulations in your country or industry.
  • Use structured, unbiased interviews alongside psychological testing to get a 360-degree view of a candidate’s potential for a role.
  • Before administering a psychological test, make sure that you understand what the results signify for the role in question. Map the scales or areas measured by the test to the competencies and requirements of the role, so that you know exactly how performance in that particular test is relevant to that particular role. If possible, consulting an external body at this stage will help to make the use of the assessment as objective as possible.
  • Make sure that the tool you choose to use is designed and approved for use in selection purposes. Not every psychological test is recommended for selection use, so make sure you aren’t basing recruitment decisions on tests that aren’t designed to be used for recruitment.

The DON’Ts of using psychometrics for recruitment

  • Don’t base a recruitment decision solely on the results of a psychological test. Testing must be used as part of a well-rounded selection process that’s as free from bias as possible.
  • Don’t use psychometric testing without the proper training or qualifications, otherwise you risk misinterpretation and unfair bias.
  • Don’t use psychological tests that aren’t valid, reliable or robust. Instead, identify tools that are well-validated and have proven real-life applications. If in doubt, check the guidelines of the governing body in your country and look through the publisher’s Technical Manual for evidence of reliability and validity.
  • Don’t forget that past performance is still a really good indicator of future performance. It’s important to still take into account on-the-job experience, not just psychological test results.

Using psychological testing for development and coaching

Another fundamental role of HR professionals is the professional development and training of existing team members. Whether that’s skill-specific training to improve performance in a particular role or more general coaching to improve overall work performance, it’s important for HR professionals to identify the right sort of programme for each individual.

And that’s where psychological testing can help again!

The benefits of using psychological testing for development

The benefits of using psychological testing in a development context fall into two core areas: identifying the most beneficial areas to focus on for individual development and informing coaching practices during development programmes.

Particularly when considering continual professional development for high-potential team members, psychological testing can help to identify people who might otherwise be overlooked. We all know that businesses can be structurally biased against women and those from minority backgrounds – but psychological testing helps us to look past the who and identify the core personality and psychological traits that offer potential for high performance in roles.

By identifying existing team members for development programmes that will make the most of their unique strengths, psychological testing can help to reduce the cost of hiring externally for management roles, and can help to reduce staff turnover (another costly thing!) by engaging team members in development programmes that help them with personal and professional development.

Using psychological testing in coaching helps to make the coaching process more effective. Whether the goal is to improve team dynamics or to improve the performance of an individual team member, knowing the personality traits of the people you’re coaching means that you can tailor practices to that individual – as well as focusing on areas of weakness or blind spots that might be hindering their professional development.

The DOs and DON’Ts of using psychological testing in development and coaching

Just like when using psychological tests for recruitment or selection, psychometrics aren’t foolproof in a development context either. While the risks of making ‘bad’ decisions in development are lower than in a recruitment context, there are still right and wrong ways of using psychological testing in coaching and development practice.

 The DOs of using psychometrics for development

  • Do take into account job performance as well as psychological test results. Actual performance remains a better predictor of future performance than any single psychological test is.
  • Do use psychological testing to inform decisions and development programmes, but using a wide range of coaching techniques and practices is still most effective.
  • Do use psychometrics to identify blindspots in your team and use that information to inform future organisational changes as well as individual and team coaching.

The DON’Ts of using psychometrics for development

  • Don’t base internal decisions (like access to training programmes or promotions) solely on the results of psychological tests.
  • Don’t use tests that aren’t reliable or valid, or tests that are designed to be used in a recruitment context only.
  • Don’t introduce psychological testing to a team without any explanation. Testing can often be met with scepticism and reluctance, so introducing testing with a strategy in place to explain the purpose of the tests and how the results will be used is important, particularly if psychological testing has never been used before.

How to get started with psychological testing in HR

If you’re now convinced that psychometrics can enrich your HR work (which they definitely can!), what should you do now?

The first thing to do is to find the right training and qualifications for you. A great place to start is with Test User Ability and Test User Personality (TUA and TUP) qualification. The Test User programmes are designed to give you a foundation in administering and using psychological testing in the workplace, covering both aptitude testing and personality testing. Some specific psychometric tools require a user to be TUA or TUP (or both) trained before using the tool, but even if your chosen tool doesn’t mandate TUA or TUP training it’s still advisable to gain certification, as many tool-specific qualifications will assume a basic knowledge of psychological testing that the TUA/TUP programmes will give you.

The internationally-recognised Test User training covers many of the basics that will leave you feeling confident in introducing psychological testing to your HR practice:

  • The fundamentals of ability, aptitude and personality
  • How to administer assessments in an unbiased way that meets all relevant regulations
  • Identifying the right psychological tests to use at different stages of the employee lifecycle

Once you’ve attained your TUA and TUP qualifications, you’ll be able to access a range of psychometric tools – but there are many tools that also require specific qualification in order to begin using them.

Test User qualification will give you a solid understanding of psychological testing and that will allow you to make a more informed decision about which psychometric tests are most relevant for your HR needs. 

Depending on whether you’ll be using psychological testing for recruitment or development purposes, you’ll be able to choose from a huge range of psychometric tests (taking care to choose ones that are reliable and well-validated!) and undertake training specifically for that tool. The psychometric test training will help you to understand the foundational principles of the tool and what it measures, as well as giving you guidance on how to interpret the results of that specific test.

You can find out more about Test User training here and explore all the other tools we provide training in over here – and, as always, if you have any questions, we’re here to help!

A Beginner’s Guide to the Psychology of Risk

A beginner’s guide to the psychology of risk

What is risk? How does your brain handle risk? How does your risk disposition affect your decision making?

These are all BIG questions. Because the psychology of risk is a pretty huge topic!

But that’s what we’re here to help with. We’ve worked with the psychology of risk for more years than we care to remember, so we’re distilling everything we know about risk, psychology and decision making into what will hopefully be a concise summary of the psychology of risk and how you can get started with understanding and utilising it.

So let’s give it a go!

What is the psychology of risk?

Very simply, the psychology of risk is the study and understanding of how our mental processes (our psychology) handles responses to ‘risky’ situations or decisions we’re faced with.

Easy, right?

But the more challenging thing is to define what ‘risk’ really means from a psychological perspective.

Often when we hear the word risk we conjure up images of roulette wheels and blackjack tables and lottery tickets – which are a form of risk, of course. But that’s not the only form of risk we face in our everyday lives.

The American Psychological Association dictionary defines risk as:

“1. The probability or likelihood that a negative event will occur, such as the risk that a disease or disorder will develop.

  1. The probability of experiencing loss or harm that is associated with an action or behaviour.”

Basically, a risk is when something negative might happen as a result of an action or behaviour.

Which means that our casino-based understanding of risk is far too narrow. Instead, we need to think of risk as something that happens in a huge range of situations.

Whether it’s crossing the road (where there’s a clear physical risk) or not speaking up in a meeting (where there’s a less immediate reputational risk) or buying something from a social media ad (where there’s a financial risk) – we face risk every day in hundreds of different contexts.

The psychology of risk therefore is a much more extensive topic than you might initially think. It’s about decision making, risk perception and risk tolerance – and how our unique personalities and our shared personality traits combine to give us our own personal risk disposition.

Breaking down the psychology of risk lingo

When we’re measuring and discussing the psychology of risk, here at KinchLyons we use the language of the Risk Type Compass. So before we get any further into why risk matters and how we can support teams and businesses to manage risk psychology in the workplace, it’s worth introducing the Risk Type Compass and its psychometric measures.

Emotion and Cognition

The Risk Type Compass is designed to assess candidates on two fundamental axes of human nature: emotion and cognition. We all fall somewhere on both of these dimensions, and the Risk Type Compass positions these axes as two bi-polar scales, interacting at their centre point. Every one of us falls somewhere on the emotion scale and somewhere on the cognition scale, and the thought is that it’s the intersection of those two positions that ultimately determines our approach to risk.

In the Risk Type Compass, the two scales are as follows:

 

  • Emotion: ranging from Intense in the top left to Composed in the bottom right
  • Cognition: ranging from Carefree in the bottom left to Prudent in the top right

 

If, for example, you score in the mid-range on both scales, meaning you’re neither intense nor composed and neither carefree nor prudent, your result would land you right in the middle of those two intersecting bi-polar scales.

The Risk Type taxonomy

With those two bi-polar scales underpinning the Risk Type Compass assessment, it’s then possible to construct a 360-degree spectrum of risk – the Compass part of the name.

With the two main scales plus two more bi-polar sub scales, Wary-Adventurous and Excitable-Deliberate, the Compass begins to take form – and between those scales, the Risk Types reveal themselves.

 

Wary Risk Type

Scale position: extreme-mid towards Intense on the emotion scale; extreme-mid towards Prudent on the cognition scale

Characteristics: sensitive to risks around them, keen to eliminate uncertainty at ever opportunity, eager to establish control over potential risks.

Intense Risk Type

Scale position: extreme-mid towards Intense on the emotion scale; middling on the cognition scale

Characteristics: highly alert to risk, apprehensive about taking risks, feel very strongly disappointed if things go wrong.

Prudent Risk Type

Scale position: middling on the emotion scale; extreme-mid towards Prudent on the cognition scale

Characteristics: concerned with eliminating risk through clarity, strategic and methodical in their approach to eliminating ambiguity

Excitable Risk Type

Scale position: extreme-mid towards Intense on the emotion scale; extreme-mid towards Carefree on the cognition scale

Characteristics: enthusiastic about exciting things, but with a sensitive risk antennae, committed once a decision has been made

Axial Risk Type

Scale position: middling on the emotion scale; middling on the cognition scale

Characteristics: balanced, proportionate responses to risk, often acts as a mediator in group situations

Deliberate Risk Type

Scale position: extreme-mid towards Composed on the emotion scale; extreme-mid towards Prudent on the cognition scale

Characteristics: calm, calculated and not easily shaken, tend to do things by the book, planned and well-prepared

Carefree Risk Type

Scale position: middling on the emotion scale; extreme-mid towards Carefree on the cognition scale

Characteristics: prioritise opportunity over risk, make on-the-fly decisions easily, good at handling change or urgency

Composed Risk Type

Scale position: extreme-mid towards Composed on the emotion scale; middling on the cognition scale

Characteristics: rarely feel anxiety, dispassionate in decision making, deal well with stress and change

Adventurous Risk Type

Scale position: extreme-mid towards Composed on the emotion scale; extreme-mid towards Carefree on the cognition scale

Characteristics: fearless, confident, unafraid of risk, frustrated by resistance and keen to take action

Type or Trait?

If you’ve read as many psychology papers as we have, you’ll be well-versed in the type versus trait debate. But if not, you’re about to be.

The general gist is that there are two schools of thought when it comes to personality:

  1. Those who subscribe to type theories believe that there are measures that can place an individual into a particular pre-defined category. You either are that type, or you aren’t.
  2. Those who subscribe to trait theories disagree and believe that we all fall somewhere along a spectrum and every one of us is somewhere along a continuum.

The Risk Type Compass, despite using the word ‘Type’ in its name, largely subscribes to the second theory: that we all fall on some sort of spectrum when it comes to personality. The creators of the Risk Type Compass, Psychological Consultancy Ltd, use trait methodologies in their work (which includes being closely involved in the development of the Hogan Assessment Systems suite of personality tests), so it’s unsurprising that the Risk Type Compass has been largely developed with trait theory in mind.

So why the name, Risk Type Compass?

Simply put, it’s because the 360-degree continuum that the Risk Type Compass measures risk tolerance and risk attitudes on is split into eight Risk Types for ease of interpretation and communication.

Risk Attitudes

Aside from placing you into a Risk Type category, the Risk Type Compass also assesses how your Risk Tolerance differs in various areas of your life.

Risk Tolerance is how likely we are to take a risk and the Risk Type Compass assesses that likelihood across five Risk Attitudes:

  • Financial: confidence in making financial decisions and investment choices
  • Reputational: tolerance about behaviours that may offend others’ sense of propriety
  • Social: comfort when opening conversations, being in the limelight and addressing groups
  • Recreational: readiness to pursue challenging and potentially dangerous activities
  • Health & Safety: attention to matters that may impact on health or wellbeing

Although your Risk Type may suggest that you’re generally averse to taking risks, it might be that your aversion is focused on, for example, financial risks – but that you’re much more comfortable taking recreational and social risks.

It’s important to remember that a Risk Type is merely a categorisation of your risk psychology – it’s a ‘type’ for communication and interpretation purposes, but the traits that determine your Risk Type are a continuous 360-degree spectrum, which is reflected in the variety of Risk Attitudes within a single Risk Type.

Why does the psychology of risk matter in the workplace?

Now that we’re clear that the psychology of risk impacts every area of our lives, it’s no surprise that it plays a big role in our workplaces too.

In the workplace, there are two things to consider when we’re thinking about the psychology of risk. First, how does our Risk Type affect our individual interactions within the workplace? And secondly, how does the combination of Risk Types across teams, departments and entire organisations affect the organisational risk landscape?

Risk Type and individuals in the workplace

As we’ve seen, Risk Type and decision making are intricately linked – and in the workplace we face hundreds of decisions every single day. From how much we push the edges of our 60-minute lunch breaks to whether we ask for that pay increase or not, the range of decisions we face is huge.

And Risk Type has an increasingly important application in workplaces where health and safety are a concern. In industrial workplaces or where hazardous materials are handled, the Risk Type Compass has been used to identify individuals who may be less likely to conform to rigid rules and procedures. That doesn’t mean that those individuals aren’t suitable for that role, but it does allow management and leadership to create procedures and environments that account for those individuals.

Assessing Risk Type on an individual level isn’t about identifying suitable people for roles; it’s about adding another layer of insight into individual personalities that can help an organisation harness their potential and mitigate any negative consequences that might be associated with a particular Risk Type.

Risk Type & Occupation

While Risk Type doesn’t have a direct application in indivdual selection processes, there is some interesting evidence that suggests that particular Risk Types are drawn to particular professions.

The human population as a whole is evenly distributed around the Risk Type Compass – which makes it surprising to see some industries and job roles have a notable skew in a specific direction.

One example of such a skew is in Administration Professionals, where 25% of surveyed individuals (n=240) were Wary Risk Type, while only 3.75% were Composed, suggesting that administrative professionals tended to skew significantly towards the Measured end of the cognition spectrum and towards the Emotional end of the emotion spectrum. The Wary Risk Type is characterised by self-discipline, hyper-awareness of risk and a high level of organisation – which aligns well with the demands of an administrative position.

 

 

In almost-direct contrast, recruiters were found to skew heavily towards the Carefree Risk Type. In a survey of 805 recruiters, 28.4% of the sample were Carefree Risk Types and 22% were Adventurous Risk Types, both of which land towards the Carefree end of the cognition scale and towards the Composed end of the emotion scale. What we know about Carefree and Adventurous Risk Types is that they thrive in environments where risk and opportunity are rife, and aren’t likely to shy away from competition. They tend to be outgoing and relish the adrenaline and excitement of trying new things – and given that the recruitment industry is incredibly competitive and needs a level of confidence, it’s no surprise that the Wary, Prudent and Intense Risk Types aren’t attracted to the profession.

 

 

One of the most extreme examples of occupational Risk Type skew is found in the Auditor profession. Of 198 surveyed Auditors, 36.4% fell into the Deliberate Risk Type, 17.7% into Composed Risk Type and 13.1% into Prudent Risk Type – meaning a huge 69% of the Auditor population fell into just three of the nine Risk Types. Just 2% of Auditors were Carefree, 4% were Excitable and 3% were Intense. The results show that Auditors are much more likely to score on the calm end of the emotion scale, towards Composed, and are also likely to score on the Prudent end of the cognition scale. Auditors in the Deliberate, Composed and Prudent Risk Types are characterised by methodical thinking, investigative behaviours and calm, composed emotions – all of which clearly support an effective career as an Auditor where thoroughness and composure are highly valued.

 

[H4] Risk Type & decision making

One of the most useful applications of risk psychology in the workplace is increasing individual awareness of risk. Just like every other area of psychology, being aware of how your brain works and what your natural tendencies are towards risk and decision making is incredibly valuable.

For individuals in coaching situations, understanding their Risk Type often helps them to start making more informed decisions – rather than just going with their gut reaction. If a leader understands that they’re likely to be impulsive and attracted to risk, they’re able to build processes that will help to mitigate their impulses or surround themselves with people who bring a different perspective to the decision making process. 

Similarly, if an individual knows that their Risk Type is likely to make them resistant to taking risks, understanding that fact will help them to start recognising where their Risk Type is holding them back or making decisions that might not be the best for the organisation.

Risk Type and teams in the workplace

Another interesting application of risk psychology in the workplace is within teams or departments, where interactions between individuals with differing Risk Types can lead to conflict or imbalance.

Assessing the Risk Type of each team member, the Risk Type Compass Team Report allows teams to begin increasing their understanding of the differing viewpoints in their teams. Risk Types view the world and their decision making processes very differently, so the first step in any team development project is to educate the team on their individual Risk Types and those of their colleagues.

Particularly for teams struggling with interpersonal friction, an intervention using risk psychology can be illuminating. There’s no perfect mix of Risk Types for a team, but knowing where the centre of gravity lies can facilitate better understanding and more effective communication.

In a team where individuals are distributed evenly across the Risk Type Compass, with one or two team members in each Risk Type, decision making processes should theoretically be fairly balanced. But the challenge for an evenly distributed team is often communication and understanding between Risk Types. The more Adventurous, Carefree and Composed Risk Types might get frustrated by the Intense, Wary and Prudent Risk Types, who they see as holding up decision making and spending too much time focusing on the potential negative consequences.

By acknowledging that their perceptions of risk differ, these conflicting Risk Types can learn to communicate better with each other and make more balanced decisions, without interpersonal conflict.

For teams where there is a definite skew in one direction, awareness of Risk Type becomes even more important and effective. If a team is highly skewed towards the Wary side of the Compass, decision making is likely to be a long and laboured process, while teams skewed towards the Adventurous side of the Compass are likely to be more gung-ho and impulsive.

Neither skew is better or worse than the other, but the important thing to remember is that awareness of this risk psychology skew can help to strengthen the group dynamics, mitigate potentially bad decision making, and increase resilience too.

Ultimately, understanding risk psychology at the team level is a highly effective way of improving communication and reducing interpersonal conflict, because team members become more aware their personal strengths and blindspots and become more tolerant of the blindspots of their colleagues too.

How to start harnessing risk psychology in the workplace

Hopefully by now you’re fully convinced that understanding risk psychology both at an individual and team level can be hugely beneficial for organisations – but how do you start using Risk Type to facilitate organisational progress?

The answer is simple: get qualified in the Risk Type Compass!

The Risk Type Compass is a comprehensive risk psychology tool backed by over a decade of research into risk psychology, decision making and organisational change. It’s an incredibly reliable tool and can be applied to any industry, any organisation and any people-based concern – and is particularly useful for managing organisational change, risk culture and team development, as we’ve seen.

At KinchLyons, our Risk Type Compass certification workshops are available online on-demand so if you’re keen to add risk psychology to your people development arsenal you’re in the right place!

Head over to our Risk Type Compass page to see how risk psychology can make a difference to your organisation! And if you enjoy a good technical manual and fancy diving deep into the data behind the Risk Type Compass, take a look at the Risk Type Compass Technical Manual.

What is emotional intelligence? How does it help in the workplace? What’s the ROI of emotional intelligence for businesses? We answer it all (and more) here!

What is emotional intelligence (EQ) – and how does it help at work?

Emotional Intelligence is a phrase that gets thrown around a lot – particularly when we’re talking about leadership, retention and hybrid or remote models of working.

At KinchLyons, we’ve been incorporating emotional intelligence into our coaching practice with international clients for years. Using MHS’ EQ-i 2.0 assessment, it’s one of many tools that we use to gain an insight into clients’ strengths and development areas, particularly around dimensions of leadership, including innovation, authenticity, insight and coaching.

But what actually is it? And how does it help at work?

Stay tuned to find out!

What is emotional intelligence?

Just like with ‘business psychology’, [when the business psychology post is live, link to it here] defining emotional intelligence isn’t a cut-and-dry situation. It’s a phrase that has grown immensely in both use and importance since it first appeared on the psychology scene way back in the 1960s – and there are now several definitions, each with its own nuance.

If we take a trip back to the 1990s, when emotional intelligence really started to gain traction, we see the inimitable Daniel Goleman defines emotional intelligence as a person’s ability to manage his feelings, so that those feelings are expressed appropriately and effectively.

(If you want a really insightful dive into emotional intelligence, there’s no better place to start than with Goleman’s 1995 book, ‘Emotional Intelligence: Why it can matter more than IQ’)

Unsurprisingly, most definitions of emotional intelligence refer to one’s emotions – but when it comes to its application in the arena of business psychology, we refer back to MHS’ definition of emotional intelligence as a broad, effective summary of the world of EI:

“Emotional intelligence is a set of emotional and social skills that influence the way we perceive and express ourselves, develop and maintain social relationships, cope with challenges and use emotional information in an effective and meaningful way.”

For our purposes, this definition of emotional intelligence covers all the bases – and, as you’ll see shortly, provides a foundation for the answer to how emotional intelligence can be harnessed for good in the workplace.

Why emotional intelligence matters in the workplace

Regardless of whether your workplace is traditional, hybrid or remote, every business relies on its people in order to see success.

Relationships between people are incredibly complex, we all know that. Romantic relationships, family relationships, friends, co-workers, your favourite barista – there’s a whole host of social relationships we’re required to develop and maintain if we want to be members of society.

And the workplace is one of the most intense areas where it can be make-or-break for relationships. We’re often put in stressful situations with people who we might not naturally choose to form personal relationships with – so being able to harness emotional intelligence to develop those bonds is a must!

Emotional intelligence is a proven key indicator of human performance and development – in fact, some estimates put the ROI of investment in emotional intelligence support and training as high as 1500%.

In the workplace, higher levels emotional intelligence generally mean:

  • Better communication with colleagues
  • The ability to build stronger and more meaningful relationships at work
  • Having more powerful coping strategies for when things get tough

And the big benefit of emotional intelligence in the workplace? Unlike many other elements of personality, it can be developed and strengthened fairly quickly and effectively.

As emotional intelligence is a set of skills, rather than a static personality trait, 1:1 coaching or group coaching can be focused on developing areas of emotional intelligence that individuals or teams struggle with. Whether it’s providing new coping mechanisms or improving team communication, developmental coaching for emotional intelligence can be incredibly powerful.

Using emotional intelligence in the workplace

With an ROI of 1500%, we bet you’re chomping at the bit to learn how to start harnessing the power of emotional intelligence in the workplace. So that’s what’s coming next…

We use MHS’ model of emotional intelligence, the EQ-i 2.0, to help clients and teams to build solid foundations for their workplace performance. And those foundations cover five core areas (which, if you remember from earlier, MHS incorporate into their definition of EI, too!):

  • Self-Perception
  • Self-Expression
  • Interpersonal
  • Decision Making
  • Stress Management

Hold on tight while we dive into how each of those foundations play out in the workplace – and how you can start to build greater emotional intelligence in your work.

Self-Perception

Self-perception is, unsurprisingly, how you perceive yourself. More specifically, it’s about respecting yourself and being aware of your strengths and weaknesses. It’s about being willing to learn, develop and improve yourself, and being able to recognise how your emotions affect you and those around you.

High Self-Perception will likely mean that you feel pretty in-tune with yourself. You know what your strengths are, and you’re able to maximise them, and you know what your weaknesses are. You spend time working on improving those areas of weakness, as you know they have an impact on your happiness and the emotions of those around you too.

Low Self-Perception might mean that you have a tendency to feel inferior or less capable than your colleagues, which might cause a lack of motivation to push yourself to achieve more. You may struggle to see nuances in your emotions, which will limit your ability to identify their triggers, predict your emotional responses, and regulate their impact on others.

Strategies for developing Self-Perception

  • Start recording your emotions throughout the day – try to identify patterns and causes, so that you can begin to predict and harness your emotional responses
  • Keep your goals in view so that you can give yourself a motivational boost when you’re lacking in confidence
  • List out your strengths and improvement areas, then think about how you can utilise your strengths to improve the areas you struggle with

Self-Expression

While Self-Perception is about the internal ability to handle and process emotions, Self-Expression is about what we do with those emotions. Self-Expression includes the ability to express emotions verbally and non-verbally, the ability to communicate feelings, beliefs and thoughts and defend your values in a socially acceptable way. It’s also the ability to be self-directed, allowing you to be free from emotional dependence on others.

High Self-Expression would likely mean you appear self-assured and independent. You’re probably able to detach yourself from the emotional responses of others and direct your emotions based on your own thoughts and feelings instead. You’re likely to not struggle with standing up for yourself and choosing actions that protect your emotional wellbeing.

Low Self-Expression means you often bottle things up inside, rather than letting people know how you feel. You might be perceived as emotionless, and you might end up causing yourself exhaustion, frustration and anger as you’re left dealing with unvoiced thoughts. You prefer direction, guidance and deference, rather than doing things your own way.

Strategies for developing Self-Expression

  • If you find yourself dwelling on a feeling but unable to express it, write it down. Brainstorm the positive and negative consequences of expressing yourself to others.
  • If you feel afraid of speaking out, note down the positive consequences that might happen if you did. Seeing these on paper will help you to rationalise the need to speak up.

Interpersonal Skills

This core foundation of emotional intelligence is all about relationships and your ability to develop and maintain mutually satisfying relationships with those around you. This requires empathy for the way others are feeling and how you can respond to those emotions and it requires an understanding of social responsibility, where you recognise the need to contribute to society and show a concern for the greater good.

High Interpersonal Skills will likely mean that you’re easily able to build positive relationships with people around you, particularly in the workplace. You are likely to have a good insight into the feelings and behaviours of others and you’re able to articulate that understanding so that others feel heard and supported. You’re likely to have the wider goals of the business in mind and you make decisions based on what’s best for everyone, not just you.

Low Interpersonal Skills means you may only feel comfortable developing relationships with people who are like you. You may feel uncomfortable or hesitant in new social situations and you may find it difficult to read other people’s emotions. Your emotions often get the better of you and you struggle to collaborate with others when it comes to wider issues, as you often see yourself as separate from societal or organisational issues.

Strategies for developing Interpersonal Skills

  • Make an effort to go out of your way to interact with someone you don’t need to interact with, e.g. someone from another team or department. Note down how the conversation goes and try to recognise how they feel about the conversation too.
  • Practice active listening as a way to get a better understanding of others’ thoughts, feelings and emotions.
  • Play a more active role in team situations. Try to think from the perspective of each member of the team and be creative about a solution that suits everyone’s needs.

Decision Making

This element of emotional intelligence revolves around the ability to solve problems without deferring to emotions at every opportunity. Effective Decision Making requires the ability to respond (rather than react), remain objective about situations even when emotions run high, and resist or delay impulses for the sake of the bigger picture.

High Decision Making means you’re likely to be the mediator in emotionally-intense situations. In a team, this means you’re able to see things from an objective perspective and help to find a solution that works for everyone. You’re also likely to have a high level of self-control, as you’re able to resist temptation and control your emotional impulses easily.

Low Decision Making will mean you often appear to make rash decisions, based on emotions rather than logic. You often fall victim to your own emotions and feel paralyzed when looking for a solution. Your emotions are likely to skew your perception of situations, and you find it difficult to translate your emotions into positive actions. You may sometimes be impulsive and experience strong rushes of emotion that dictate your behaviours.

Strategies for developing Decision Making

  • When you’re feeling a rush of emotions, take a pause before making any decisions. Note down what you’re feeling and how it relates to the problem you’re facing, and try to see things more objectively.
  • When you face a problem, break it down into smaller pieces rather than trying to tackle the whole thing at once. List things out as objectively as possible and tackle each part at a time to reduce the emotional burden you feel.
  • If you’re struggling to control your emotions with other people, don’t be afraid to tell people you need a break from the situation so that you can come back with a clearer head.

Stress Management

Workplaces are stressful things, we all know that! But when it comes to emotional intelligence, the ability to manage that stress and not let it control our emotions and our decision making is essential. Stress Management includes the ability to adapt your emotions, thoughts and behaviours to unfamiliar or unexpected situations as well as the ability to maintain a level of optimism, even when experiencing setbacks.

High Stress Management will mean you’re able to keep your cool in stressful situations. You’re able to recognise your emotions, but not let them control you, especially in situations that arise unexpectedly. You’re likely to be seen as the calm, logical one in moments of high-stress and you’re able to keep seeing the positives even in tough situations.

Low Stress Management likely means that you struggle to handle stress, perhaps retreating into yourself or experiencing emotional outbursts. You’re not as hopeful about the future as others are and you allow that to cloud your judgment, particularly in stressful situations. You tend to expect the worst and stress hinders your performance at work.

Strategies to develop Stress Management

  • Seek out unfamiliar (yet safe) situations that you can put yourself in. Note what makes you feel uncomfortable and then consider which of your strengths you can use to counter that discomfort.
  • Before trying to find a solution to a problem you’re facing, note down every positive you can think of that might be a result of the problem. Try to find the positives in the moments where you instinctively see the worst.
  • For dealing with high-stress moments, create a list of coping strategies you can implement. It might be taking 5-minutes to get some fresh air or jotting down how you’re feeling – whatever helps you to process the stress and return your emotions to a normal state before making any decisions.

Harnessing Emotional Intelligence for your business

Emotional Intelligence is a complex thing – but it is one of the most important factors in the success or failure of a business.

Particularly as we all try to get to grips with hybrid and remote models of working, having a team with strong emotional intelligence and the resources available for continuous development of their improvement areas will help your business to handle challenges that come your way.

If we’ve convinced you of the power of emotional intelligence in the workplace and you want to experience the ROI of emotional intelligence development for yourself, you’re in the right place!

At KinchLyons, we use the EQ-i 2.0 & EQ360 tools to assess and develop individual and team emotional intelligence for businesses across the world. Using positive psychology and coaching, we help individuals and teams to build stronger relationships, handle challenges more effectively, and, ultimately, become even greater assets for your business.

Drop us a line if you want to learn more about our talent services!

What is Business Psychology?

We talk about business psychology day in, day out. We’re a business psychology firm, so it’s hardly surprising that it bleeds into everything we do.

But, we realise that for many people, business psychology might be another one of those jargon phrases that are bandied about without really knowing what it is, how it works or who it can help.

So we’re here to rectify that. We’re going back to basics to share with you what business psychology is, where it came from, and how it can help every business under the sun to be better, more productive and more impactful.

What is business psychology?

Business psychology goes by a number of different terms, all of which mean roughly the same thing. We won’t go into the ins-and-outs of the nuances here, but for the purposes of this piece we’ll be using ‘business psychology’ to refer to the same concept as these terms:

  • Organisational psychology
  • Occupational psychology 
  • Industrial psychology
  • Industrial-Organisational psychology (I-O psychology)
  • Work psychology

We’ll be using ‘business psychology’ hereon in, simply because it feels to us like the most accessible and understandable term to use.

So, what exactly is business psychology?

Unfortunately, there’s not a quick, one-stop definition! But we’ve gathered a few from across the industry that feel aligned with what we believe business psychology is – and that are as easy to understand as possible!

Business psychology is:

“The application of the science of psychology to work. [Business] psychologists develop, apply and evaluate a range of tools and interventions across many different areas of the workplace” – British Psychological Society’s Division of Occupational Psychology

“The study and practice of improving working life. It combines an understanding of the science of human behaviour with experience of the world of work to attain effective and sustainable performance for both individuals and organisations” – The Association for Business Psychology

“[the combination of] the science of human psychology with practical business application in order to improve the work environment for employees, improve productivity in businesses, and organise groups of people in companies” – University of the People

Basically, business psychology is the application of psychology to business environments, with the aim of improving wellbeing, elevating performance and enabling a more engaged and motivated workforce.

Simple, right?!

A (brief-ish) history of business psychology

Psychology as a scientific discipline is far from new. In fact, we’re just the latest in a long line of psychologists and scientists exploring the human psyche and trying to understand what makes people tick.

While we can’t possibly cover every development in the area of business psychology here, we’ll do our best to give a short-and-sweet summary of the world’s journey from ‘what on Earth is business psychology?’ to ‘business psychology is powerful!’.

The early days of business

Business psychology started to develop from the mid-1880s onwards and followed parallel paths in the US, UK, Australia, Germany and the Netherlands.

But what prompted the start of business psychology?

Two words: Industrial Revolution.

If it’s been a while since your school history lessons, the Industrial Revolution happened across the western world in the early 1800s. Suddenly, manufacturing and business were BOOMING, with factories and corporations and businesses with big ambitions popping up everywhere you looked.

And with that revolution came economic progress, but also uncertainty and a whole heap of new problems for people to deal with.

Suddenly, thousands of people were working in roles that hadn’t previously existed. Hierarchies were being created within organisations and along with those hierarchies, leadership roles.

As Helio Carpintero notes, “The history of organisational psychology is deeply rooted in the process of growth, increasing complexity and richness of both economic and industrial structures in our modern world.”

From the Industrial Revolution onwards, business psychology started to be taken seriously. Instead of seeing industrial conflicts, workplace accidents, and organisational inefficiencies as ‘organisational’ or ‘social’ issues, governing bodies and business owners began to accept the view of psychologists – that the individual worker and their human psychology were at the core of industrial issues.

Business psychology’s teenage years

But business psychology didn’t stop there.

During World War One and World War Two, business psychology was taken even more seriously. 

In both the UK and the US, psychometric testing was introduced to recruit military personnel and identify the most effective role for them in the war efforts. IQ was developing in the educational psychology world, and psychologists like Charles Myers (National Institute of Industrial Psychology, and later a founding member of the British Psychological Society) were studying worker fatigue and wellbeing in munitions factories.

The wars gave business psychologists the opportunity for mass testing and huge data gathering to research, test and develop their theories – which were then published in a wide array of scientific journals that were launched throughout the 1920s and 1930s.

Like with many areas of society during the world wars, individual and group relationships in workplaces began to be taken seriously – partly driven by the need for camaraderie and collective action to defeat the enemy abroad. While there remained the usual management-worker tensions during this time, the focus shifted tangibly towards empowering the individual worker to work to their full potential and encouraging leaders to manage people individually, taking their personality traits into consideration.

The twentieth century

As with any scientific discipline, methods of testing and the application of business psychology were refined during the twentieth century, with a focus on reliability and validation of psychometric testing – and a focus on developing practices that fuelled global economic growth.

The 1980s in particular saw huge discontent in the workforce, with workers strikes happening regularly and a demand for better working conditions. While business psychology had started to shift momentum away from seeing worker discontent as a class issue and towards it being a psychological issue that could be tackled with a scientific approach, the unrest of the 1980s pushed business psychologists to consider the impact of group psychology in the workplace.

Business psychology began to incorporate group behaviour, individual differences, and leadership effectiveness – all of which continue to be a focus for business psychologists today. Increasingly, business psychologists began to consider the impact of the individual and the impact of the organisation – and how the two interact in the workplace to create behaviours, cultures and psychological contracts that can be studied by business psychologists to improve the workplace for everyone involved.

… And now?

Today, business psychology is a firm, well-respected discipline. There’s an immense amount of scientific and academic research to back up business psychology and its applied discipline – and it’s become a go-to source of trusted advice for businesses across the world, of all shapes and sizes.

Most recently, we’re seeing a big shift towards focusing on wellbeing, effective and empathetic leadership, as well as psychologists rising to the challenge of handling hybrid and remote workforces.

Paralleling a shift in society’s perception of mental health issues, positive psychology has emerged as a way of prioritising worker wellbeing by focusing on creating environments and systems that allow people to flourish and utilise their strengths and personality traits for positive impact.

At KinchLyons, we focus on using positive psychology practices, backed up by decades of scientific proof, to develop human capital as the ultimate business advantage. We’re firm believers that people are business’ greatest assets – and business psychology allows us to help businesses to help their people thrive.

What exactly does a business psychologist do?

Ah, another can of worms that doesn’t have a simple or single answer!

Business psychology is a huge discipline, with an even more huge array of practices under its banner. From leadership development to ability testing to coaching to acquisition – there is a lot that business psychology gets involved in.

Again, we stand no chance of being able to do every single field of business psychology justice here, but we’ll do our best to cover the main areas so that you get a good idea of what we business psychologists spend our days doing!

Leadership Development

Often what happens in businesses is that the best workers get promoted into leadership positions. But that often results in people finding themselves in leadership positions that they’ve never been trained for.

As business psychologists, our priority is to develop and identify leaders who have the ability to effectively manage their teams and workforces. Our focus isn’t the tangible management skills that are taught in MBAs or leadership programmes, but instead the use of psychological practices to motivate and empower team members, negotiate workplace conflicts and ultimately create a positive working environment for all.

Leadership development includes:

  • 1:1 leadership coaching using psychometrics
  • Team development (especially C-suite teams)
  • Leadership hiring
  • High performance talent identification/development
  • 360-degree performance assessments 
  • Executive coaching

Talent Acquisition & Hiring

Finding the right person for the right job is one of the most important things in the world of business – as proven by years of business psychology research! While it’s rarely an exact science, one of the things we do as business psychologists is to help business owners or human resources departments identify the right people when filling roles.

When identifying the best fit for a role, the first step is usually to identify the traits and skills needed for a role – and map those onto psychometric competencies wherever possible. On top of that, interview skills training, identifying existing internal talent and designing engaging onboarding programs are all things that business psychologists can help with.

In recent years, there has been a big focus on interview skills in the business psychology field. With an increasing focus on diversity and inclusion across the business world, it’s important that interviewers are able to be objective, unbiased and fair in their interviews. Consulting with HR departments to design competency-based interview questions that reduce the impact of unconscious bias has become a focus for business psychologists recently.

Talent acquisition and hiring work for business psychologists includes:

  • Competency mapping for psychometric testing
  • Talent identification in internal teams
  • Interview skills training
  • Engagement and onboarding consulting

Team Management & Executive Coaching

Interpersonal relationships within teams and organisations can make or break a business’ chance of success. As Benjamin Schneider said, “The people make the place” – so managing teams and individuals within a business is a vital part of any business psychologist’s role.

At the team level, business psychologists can help to facilitate team relationships through team building exercises and simulations, 360-degree assessment sessions or through individual coaching with a whole team. Whether it’s a team whose performance is lacking, or a team who has experienced organisational change, a business psychologist will discuss with key stakeholders before designing a bespoke, science-based intervention.

At the individual level, business psychologists can support organisations with performance management (using psychometrics and constructing objective, feedback-gathering performance review sessions), individual coaching (whether focused on career development or professional development within the workplace), and supporting individuals through organisational change.

Business psychologists can support organisations with:

  • Team development workshops
  • 1:1 coaching using psychometrics
  • Performance management
  • Employee engagement initiatives
  • Team building simulations
  • Decision making training and simulations
  • 360-degree performance appraisals

Organisational wellbeing

The importance of wellbeing and positivity in the workplace has been slowly coming to the fore for a few years now – but with the unavoidable rise of remote and hybrid working thanks to the pandemic, even more organisations are beginning to realise the power of supporting employee wellbeing at every stage of their working lives.

Workplace wellbeing initiatives are increasingly becoming the norm in businesses – but for business psychologists the important thing is that these initiatives are evidence-based and actually effective. Rather than assuming a pool table in the break room will make staff happier or adding ‘Pizza Thursday’ to the culture, business psychologists work with organisations to assess current employee engagement levels, use psychometrics and structured interviews to figure out what makes people tick, and then develop wellbeing initiatives that are far more likely to be effective in increasing employee satisfaction.

Workplace wellbeing includes:

  • Employee engagement assessment and programmes
  • Positive psychology practices
  • Group coaching and team development
  • Leadership styles assessment and coaching

How does business psychology help organisations?

Essentially, wherever there are people and wherever those people are performing some kind of work task, business psychology can help. As we’ve seen, business psychology can support organisations through periods of organisational change, team development, individual development, leadership coaching – and pretty much anything that a particular business is struggling with when it comes to people.

But does business psychology actually have an impact on a business’ bottom line?

In short, yes. Keep reading to learn about the ROI of business psychology for your business.

The cost of a bad hire

If you’ve ever hired someone who seemed great on paper, made a great impression at interview, but then didn’t quite live up to expectations when it came to job performance, you’ll know first-hand how important it is to find the right person for the job.

Hiring an ineffective candidate is not only stressful, it’s also incredibly costly. According to BMS Performance, bad hires often cost UK companies more than £50,000, through job advertising fees, hiring fees, wasted time and team inefficiencies. For small businesses in particular, a £50,000 loss can have a huge impact on the business and its people.

Outside of the financial burden of ineffective hiring, businesses often see other negative effects of ‘bad hires’, including:

  • Negative impact on company culture, particularly if turnover is high
  • Employee engagement falling, as a result of increased workload and uncertainty
  • Productivity levels falling, as other team members resent needing to pick up the slack

With a business psychologist on board, however, it’s much more likely that a business will hire the right fit for the role off the bat. By using competency-based interviews, reducing unconscious bias, and using psychometric assessments to judge culture-fit as well as job competence, business psychologists help businesses to avoid the financial and non-financial costs of hiring the wrong person.

The cost of ineffective leadership

You’ve heard the saying, “People quit bosses, not jobs”, right? There’s an element of truth in that!

When working day-in, day-out with the same team, interpersonal relationships are incredibly important. Even if a person is 100% satisfied with the content of their job role, a bad boss can be the nail in the coffin for them. In fact, a poll conducted by Gallup found that 50% of employees have left a job explicitly because of a manager.

Not only can business psychologists help businesses to identify high potential candidates for leadership roles, but they can also support leaders themselves through 1:1 coaching. 

Particularly when emotional intelligence tools are used during these coaching processes, there is a demonstrable financial and non-financial ROI for leadership coaching. By supporting leaders and managers to develop their emotional intelligence and arm them with emotionally-aware management tools, business psychologists can help to reduce the number of employees who leave jobs because of poor management, which saves the company money, reduces employee turnover (which supports the development of a positive workplace culture), and improves employee wellbeing too.

The cost of low employee engagement (particularly in remote or hybrid workplaces)

Employee engagement has been a focus for business psychologists for many years now – but it’s still sometimes met with scepticism in the business world. When HR budgets are stretched and investment is funnelled into other areas of the business, employee engagement might feel slightly too intangible for businesses to worry about.

But really, investing in employee engagement has one of the highest ROIs in the business psychology world. It’s clear that businesses with high turnovers are likely to be less successful, due to disrupted workflows, a high upfront cost for onboarding new hires, and an impact on workplace culture. Besides working with leaders to improve management styles, assessing and improving employee engagement is one of the most effective ways of reducing staff turnover – in fact, a Gallup survey concluded that companies with highly engaged employees have a turnover rate that is between 25% and 59% lower than their competitors.

More recently, the shift towards remote and hybrid working has brought the importance of employee engagement into the forefront of many businesses’ minds. With employees working from home and physically distanced from managers and colleagues, informally assessing employee engagement becomes more challenging – and the risks of employees losing touch with the business and its values increases dramatically. Engaged employees, whether they’re remote or in the office, are more likely to be productive, efficient members of the organisation – which clearly improves the bottom line.

How to start harnessing the power of business psychology

If you’ve stuck with us this far, you should now understand what business psychology is, where it came from, what it does for businesses, and how powerful it can be for organisations of all shapes and sizes.

So you might be thinking, “How can I get the power of business psychology working for my business?” – and that’s where we come in!

KinchLyons is here to help businesses of all sizes, shapes and industries make the most of their human capital. Our focus is on using scientifically robust and proven methodologies and psychometrics to help individuals, teams and businesses create organisations that allow people to thrive. You can read more about us and our people over here.

Through accreditation workshops or our Talent Services, our friendly team of coaches and consultants can help your business solve its people woes and help you to fully harness the potential of every individual in your business.

Fancy a chat? Drop us a line!