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Article by Barbara Wieland, The Grand Rapids Press, March 24, 2002.
Scott McLean's family wanted to make a good buy, but this purchase had them concerned.
The family-owned Falding Capital Group of Grand Rapids is in the business of buying other businesses. Family members weren't sure how to evaluate the company for sale, a Chicago firm run by young managers who be retained after the sale.
Accountants could evaluate books and balance sheets and crunch numbers for Falding Capital. But how could they evaluate the worth of a company's managers?
"It was a relatively unfamiliar industry for us," McLean said. "We wondered, 'Are these guys just blowing smoke or is it true what they tell us?'"
Unsure, Falding Capital turned to Roger Jansen, a psychologist who specializes in industrial and organizational psychology.
Jansen spent a week evaluating the company before he gave his recommendation.
"Roger told us that the management wasn't as good as they said they were," McLean said. "The business itself was good, but he told us the management was bad. It was very eye-opening."
The sale didn't go through.
Impressed with the Jansen's work, McLean made another business decision. He started a company with Jansen and another psychologist, Stephen Kincaid.
The three partners formed Leadership Capital Group a little more than a year ago. The Grand Rapids-based firm of industrial and organizational psychologists has gathered customers from coast to coast since then.
They are part of a growing trend. The number of psychologists working with businesses has exploded in recent years, with membership in the Society for Industrial and Organizational Psychology growing 110 percent since 1990.
Companies increasingly call on these doctorate-level professionals to evaluate new hires, train managers, resolve personality conflicts and prepare succession plans.
"What we do has a direct impact on a company's bottom line," Jansen said. "If a company hires the wrong person, it's going to cost them."
Brain trust
Psychologists such as Jansen amass a startling amount of information about a person in a short time. In the course of a day of standardized testing, simulations and interviews, he assesses whether a person is a good fit for a given job at a particular company.
That's critical in times when companies are trying to cut back their work force.
"Companies are in a downturn now, but you still need to bring good people on board," he said. "When you have problems selecting people, you come to us."
The work Jansen and other organizational psychologists do is different than the work of clinical psychologists. Since hiring and other business decisions can result from his recommendations, he has to be careful not to cross legal lines.
"We have to follow (Equal Employment Opportunity Commission) and (Americans with Disabilities Act) guidelines," he said. "The questionnaires we do are not clinical. You can't make a diagnosis from it."
And talks Jansen holds with an employee aren't subject to doctor-patient privilege, as are talks between clinical psychologists and their patients.
But Leadership Capital partner Kincaid said he doesn't provide raw psychological data to employers, either. He interprets it first.
"We're really looking for patterns. People are really more complex than any one event they may bring up in our discussion," he said.
When he presents his findings to clients, Kincaid wants to come across as an entrepreneur, not a doctor.
"You don't want to come off as a psychologist. You come off as a businessperson," he said. "Our focus is really on the practical things."
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