EXECUTIVE LEADERSHIP CHARACTER WINS AND VIRTUOSOS RULE – I KNEW IT! (PART TWO)

Our souls are not hungry for fame, comfort, wealth or money. Our souls are hungry for meaning

Harold Kushner

Just ask anyone to recount what a past or current leader who had positive impact on them exhibited and you won’t get “he ran good meetings: or “she was always on time”. You will get things like “she always told the truth and was open and transparent” or “I could trust him to support me” or “she always owned up to her mistakes and accepted the consequences – she didn’t point fingers” or even “he was always looking out for me and my team”. Moreover the comments will be about the character of the leader and their impact and rarely about what they accomplished. In the previous blog I set the stage to now tell you about the “Character Matters” ground-breaking research conducted my colleague Dr. Fred Kiel.

Disillusioned by the unethical traits and corrupt actions by several CEOs in high places who have destroyed the value in the institutions they were entrusted to lead, Dr. Keil sought to examine the role high character might play in achieving sustainable value. Data sets were collected on 80 CEOS and their teams from a cross-section of large, medium and small private, publicly traded, nonprofit and even private equity firms and observations were solicited from over 8,000 of their employees. From previous research the four moral principles of Integrity, Responsibility, Forgiveness and Compassion were deemed to be the differentiating elements that employees used to evaluate the character of their CEO and senior team. The results were extraordinary. High character CEOs, or what Dr. Keil calls ‘virtuosos’, were scored to exhibit Integrity 30% more, Responsibility 40% more, Forgiveness 22% more and Compassion 45% more than ‘self-focused’ low character CEOs. What’s more the Return on Assets for the ‘virtuosos’ was over 10% better than the ‘self-focused’ deadbeats. Perhaps even more importantly ‘virtuosos’ had on average of 25% better scores across five Workforce Engagement Factors than their ‘self-focused’ counterparts and it doesn’t stop there. Virtuosos also scored significantly higher in things like Innovation, Innovation, Adaptability, Teamwork, Collaboration, Talent Management, Communication, Vision, Strategic Focus and Accountability – all vital elements required in strategy execution. Finally the same high scores (or low scores for the ‘self-focused’ leaders) outlined above were also exhibited in the senior teams they led

Is leadership character, or what Dr. Keil calls “the CEO Effect”, the only critical ingredient effective in executing sustainable value? Of course not. A robust business model responsive to the macro economic opportunities and an organization ‘system’ aligned to deliver on that model are imperatives. However Dr. Keil’s research has confirmed that “The CEO Effect” accounts for over 20% of the eventual results and it is much easier and faster to change/develop the CEO and senior team than market macroeconomics, a whole organization and its business model! Character is as malleable as the person(s) him/herself. Keep a ‘self-focused’ C-suite leader and their team of low character in place and you are going to destroy value. OR keep, develop, select or hire a ‘virtuoso’ C-suite leader and top team of high character and you will create sustainable value for your organization over time and they will shape the organization and its business model to maximize the opportunities in the macroeconomic environment. By the way they will also create a talent magnet of an organization that will attract and retain the best and brightest. Research proves this – no debate! I KNEW IT!

By the way if you want to know more about Dr. Kiel’s research check out his Ted Talk entitled “Psychopaths in the C-Suite” at http://www.youtube.com/watch?v=vqBPZR63vfA