Whether and how to assess key competencies is a subject of debate and constitutes a main challenge in the implementation of key competencies within the New Zealand curriculum. The use of rubrics in criteria-based assessment may not take into consideration the situated and emergent nature of learning because the assessment criteria are constructed before task performance occurs. An inductive assessment approach can be employed to discover what the learners know, understand, or can do, without focusing on predetermined aspects of students’ performance. This article aims to discuss, with examples, how the technique of thinking conversation can be used to elicit information on students’ competence and how these data can be analysed to discover emergent and unanticipated aspects of students’ performance for further structured assessment or teaching intervention. A complementary inductive and deductive approach, where interpretation of data is facilitated by comparison to theoretical models of task performance, is also discussed.