The link of character & organisational success…

Does having the character traits of integrity, responsibility, forgiveness and compassion lead managers to an increased chance of success?  Results show yes!  A study by KRW International, found that CEOs who were rated by their employees as demonstrating high levels of these characteristics had an average return on assets of 9.35% over a two-year period, which is nearly five times as much as those with low character scores – their ROA averaged only 1.93%.

The study looked at how employees rated their executive’s character and the impact of character on success.  The four characteristics to analyse; integrity, responsibility, forgiveness and compassion were selected from Donald Brown’s list of about 500 behaviours and characteristics.  Anonymous surveys were sent to employees at 84 US Companies and Non-profits which asked questions regarding how often their CEOs and management teams demonstrated those four characteristics.  Interviews were also conducted with executives and the organisations’ financial results were analysed in order to understand the success of the company.  The 10 executives who were given high ratings on all four characteristics were named ‘Virtuoso CEOs’.  Harvard Business Review said these executives were found to “frequently engaged in behaviours that revealed strong characteristics – for instance, standing up for what’s right, expressing concern for the common good, letting go of mistakes (their own and others’), and showing empathy.”  The opposite of these virtuoso CEOs were the 10 lowest scorers, named ‘Self-focused CEOs’.  These individuals often were found to alter the truth to match what they wanted to achieve, passed blame onto others, cared mostly for themselves and could not be trusted to keep promises – with no appreciation for others.

The results were extremely clear – executives who were rated higher on the four characteristics had better organisational success!  Co-founder of KRW International, Fred Kiel, commented that he was unprepared for how robust the connection would be.   In addition to higher financial metrics, the Virtuoso participants also received higher ratings on vision, strategy, focus, accountability and executive team character!  Most CEOs did not realise they were acting in this manner and rated themselves much more highly than their employees did – is this a sign of ego? Or a sign of delusion?  Interestingly, this unawareness of character was highlighted in the Virtuoso executives too as they gave themselves slightly lower scores than they were rated by employees; further demonstrating strong character and signs of humility.

The level of unawareness of how self-focused types of leaders are acting and being perceived needs to be addressed – it will not just benefit your team, but also as the results show; your whole company.  Mentoring and guidance from advisors can be very influential.  It can be a long, tough process to change these characteristics and habits as often they are deeply ingrained, but through guidance, practice and mindfulness of how you are acting, this can be turned around.  Harvard Business Review summarise by saying that character is not just something we are born with; we do have the opportunities to ‘cultivate it and continue to hone it as you lead, act, and decide.’  Wouldn’t it be so inspiring and a positive move in the right direction for character development to become part of the core curriculum in leadership development for next generation leaders, even starting from business schools?  What are your thoughts?

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