Predicting Managerial Success

Newswise — Psychologists from the University of Toronto, Harvard University, the University of Hawaii and McGill University have used new computerized measures of "executive intelligence" to predict who will excel in a managerial role or in a competitive academic environment.

The research findings, published in the last issue of Journal of Personality and Social Psychology (August 2007), demonstrate that men and women who do exceptionally well at tasks assessing the cognitive functions of the prefrontal cortex " often described as the "executive" of the brain " obtain high ratings of managerial competence from their supervisors or high grades in a competitive university environment.

Study authors note that good prefrontal or executive function allows individuals to manipulate many ideas simultaneously, to plan for the future, to avoid impulsive actions and to react thoughtfully to novel situations. "These abilities, described for decades by neuroscientists as 'executive functions', are clearly relevant to managerial and high-level academic performance," says Jordan Peterson, psychology professor at the University of Toronto and senior author of the paper.

"We took the description literally and started to apply executive function tests to normal people in practical environments."

"In the past, psychologists have used IQ and personality tests to predict managerial and academic performance, with real success," notes Peterson. "However, this is the first demonstration of the unique potential of prefrontal or executive function tests to more accurately determine who will and who will not excel." Previously, such tests have been used strictly for experimental purposes by neuropsychologists and cognitive scientists.

Peterson and co-author Robert Pihl of McGill University first started using tests of executive function in the late 1980s to assess impulse control and decision-making among aggressive and alcohol-abusing teenagers. Harvard Ph.D. candidate and lead author Daniel Higgins, who is also an engineer, realized the potential of these tests for more general applications and developed computer technology to make their administration efficient and cost-effective, partnering with physician Alice Lee of the University of Hawaii. "After the tasks were programmed, we started predicting academic achievement at Harvard, replicated those findings at the University of Toronto and then moved into the business environment," states Peterson.

Using formulas derived by Frank Schmidt (Iowa U) and John Hunter of (Michigan State), the studies' authors were able to estimate the potential productivity gain associated with using executive function tests as predictors of performance. Peterson says that because people differ widely in their individual abilities, even a small degree of accuracy in testing can produce significant economic gains. In the present study, the tests were accurate beyond that small degree. In fact, Schmidt and Hunter's formulas indicate that the addition of executive function tests to unstandardized interviews would result in productivity gain of 33 per cent per hired employee ($25,000/year per $75,000 of salary). "Obviously, gains of this magnitude cannot be easily ignored," says Peterson. "Neuroscience has revolutionized our understanding of the brain in recent years. Perhaps this is the beginning of the neuroscience revolution in management."