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| May 19, 2015

by Jim Bruce

“Character is the tree.  Reputation is the shadow.”  —  Abraham Lincoln
Earlier this month, Fred Kiel’s new book, Return on Character, caught my attention. Kiel is co-founder and principal at the KRW Research Institute which focuses on creating character-driven leadership cultures. 
The book is the result of a seven-year study involving 121 CEOs and their senior teams.  Eighty-four of the 121 original companies completed the study providing information for their CEOs and their senior leadership teams.  In addition, 8500 randomly selected employees at the companies led by these CIOs completed surveys about the CEOs and their executive teams.
The bottom line is that companies led by highly principled CEOs performed significantly better than those with less principled individuals in the lead.
In preparation for the study, Kiel and his research team reviewed anthropology research and discovered that humans from all over the world share many common beliefs.  For example, parents teach students to tell the truth, to keep promises, to own their mistakes, to care for people.  They added to this observation recent findings from neuroscience and genetics and came to four universal principles along with specific character habits aligned with each principle:
Integrity – telling the truth, acting consistently with your principles, values, and beliefs (walking the talk), standing up for what’s right, keeping promises.
Responsibility – owning one’s personal choices, admitting mistakes and failures, expressing a concern for the common good.
Forgiveness – letting go of one’s mistakes, letting go of others’ mistakes, focusing on what’s right versus what’s wrong.
Compassion – empathizing with others, empowering others, actively caring for others, committed to others’ development.
One unexpected result of the study:  CEOs with high character scores (i.e., high scores on these four principles) had more supportive parents and other adults, as well as more mentors than their lower scoring counterparts while growing up.  These supportive adults all found ways to encourage kids to reflect on and learn from their behaviors.  This type of support became the foundation that enabled the future high character CEOs to learn how to reflect and create coherence around their experiences and stories thereby providing guidance for their decisions and behaviors.
And, all is not lost if you did not have these formative experiences early in your life.  A leader can stop now, and examine and reflect and do the hard work to develop stronger character habits.  CEOs in Kiel’s study who had the highest character scores created about five times more bottom line return on assets, had employee engagement scores 26% higher, and lower corporate risk than those CEOs with the lowest scores.  These high character CEOs were known for telling the truth, doing what they said they will do, owning their mistakes, and being curious (and not blaming) about the mistakes of others.  They believed in their staff, respected them, cared for them, treated them honestly and supported their development.
At this point you might be saying, “But this is about corporate CEOs.”  While it’s certainly true that the study’s focus was on CEOs of profit making corporations, one has to believe that the best personal character has benefits that are just as telling in the non-profit sector.  And, one has to believe that the behavior that is cited here for CEOs is just as important for leaders at every level as it is for the CEO.
So, it’s time for each of us to pause and reflect on the four principles and associated character habits listed above.  As we do this, we need to ask how we measure up.  And, if we find room for personal improvement, we need to recognize that need by being intentional in setting specific goals and beginning the process to improve.
Doing so will make each of us a better and more effective person and leader in every segment of lives.
I hope you join me in stepping up to this self-evaluation and taking positive steps to improve our character.  Have a great week.
.  .  .  .     jim

  1. Fred Kiel, Return on Character.
  2. Skip Pichard, The Real Reason Leaders Win:  Return on Character.  
  3. Access to the Character Reflection Predictor can be found here.