The Real Reason Leaders Win: Return on Character

Blue Books Graph With Red Arrow

Cash or Character?

Not too long ago, I was asked to give a talk about organizational culture and why it matters. Before I walked up to the podium, one of the attendees cornered me. He wanted me to know his strongly-held position. In an emphatic tone, he nearly shouted:

“Skip, cash matters, not culture, not character, not creativity! Cash is the only thing you can spend.”

How fortunate that my slides started with financials so I could demonstrate the power of culture change. But, what I wish I had was the book that crossed my desk a few weeks ago:  Return on Character: The Real Reasons Leaders and Their Companies Win.  In the most comprehensive study of its kind, Fred Kiel reveals the research that proves that good character wins. We discussed his findings at length and I know many organizational leaders will want to study the results.

 

“Character is the tree. Reputation is its shadow.” -Lincoln

 

 

Studying CEO’s

Tell us just briefly about your study and its methodology. Where did you get the idea, how many CEO’s were involved, etc.?

ROC CoverIn 2005 I and my co-author, Doug Lennick, published a book entitled Moral Intelligence in which we claimed that highly principled leaders obtained better long-term business results than leaders who were not so principled.  The book has done very well, but shortly after it was published we received some pushback. One person said, “Fred, I know you like all of this soft stuff.  But let me give you a little lesson in economics.  The business model is what creates value.  If a business is profitable and makes a lot of money, all that culture stuff will come along with it.  And if it doesn’t, that’s not a big deal as long as management stays legal.  What you talk about is just icing on the cake.  It’s nice but not necessary.  And, besides you don’t have any hard data to back up your claim.”

This really got to me.  He was right about me not having any data to back up our claim that character matters – and that became the call to action for our study.

Over the next seven years we signed up 121 CEOs and their senior teams to participate.  Eighty-four completed the study, so we have complete data sets on these 84 CEOs, their senior teams, and their organizations.  Over 8,500 randomly selected employees completed our surveys about these CEOs and their teams.  We have nearly one million separate data points in our research base.  This is the largest study of this kind to date.

 

4 Universal Character Habits

How do you define character in the Return on Character (ROC) matrix?

We scoured the cultural anthropology research and discovered that humans all over the world share many common practices and beliefs.  Parents all over the world teach their children to tell the truth, keep promises, own up to mistakes, forgive others, and to care for people – at least in their tribe.  We added to this understanding the recent findings from the neurosciences and genetics to come up with our definition of character as it applies to leaders.

The ROC Matrix shows the four universal principles and the character habits that are aligned with these principles.

 

Copyright Fred Kiel; Used by Permission Copyright Fred Kiel; Used by Permission

Lincoln said, “Character is the tree.  Reputation is its shadow.”  Likewise, the habits we all have for how we treat other people is our character reputation.  That’s what we measured in our research – a leader’s reputation for how he or she treats people.

 

Probing the Leader’s Childhood

In several places in the book, you delve into the CEO’s childhood and upbringing.  Why?  What did you find?  Why is the CEO’s life story so important?

If you took the resumes and employment histories of high character CEOs and compared them to low character CEOs, you’d be hard pressed to see much difference. Both groups are competitive, driven to succeed, rational, high energy, and often wicked smart – they know how to command a room and nail an interview.

Where we started to see significant differences was when we surveyed their employees and asked about their behaviors around the 4 universal character habits – integrity, responsibility, forgiveness and compassion. So that begs the question – how did each group come by their different postures around these habits? Where did they get their beliefs about how the world worked and how to succeed in that world?

Turns out the clues are in their childhoods and upbringing.

Leadership Lessons from Over 200 Thought Leaders

ON AIR

Voices of Influence

A few years ago, I launched this blog with the idea of sharing insights, ideas, and inspiration.  It is my hope that the lessons and ideas shared here help you in some way whether that is fast-tracking your career or overcoming procrastination.

When I started, I thought it was worth it if I made a real difference to just one person.

I’m happy to report that at least one person has found it life-changing.  That person is me.  I learn far more by sharing these ideas than you can imagine.  What an incredible experience to have the opportunity to learn from so many people.

Thank you for reading, for commenting, and for sharing these posts.  I appreciate all of you and look forward to getting to know you better in the coming months.

Below are some of the leadership interviews and posts with thought leaders from a variety of fields on numerous topics.  I hope you find one you missed and that it positively influences your year ahead.

 

“The book you don’t read won’t help.” –Jim Rohn

 

 

Leadership, Management & Execution

 

“You will be the same person in 5 years as you are today except for the people you meet and the books you read.” -Charlie Jones

 

Leadership Communication

Becoming A Heart-Centered Leader

Red Heart On Wooden Background

Matters of the Heart

Students of leadership will often look at the intellectual attributes of a great leader. We point to great strategy, distinction, winning against the competition.  Leadership is also about matters of the heart.  Susan Steinbrecher and Joel Bennett’s book Heart-Centered Leadership reminds leaders to be mindful, authentic, and caring.

I recently had the opportunity to ask Susan Steinbrecher about her work. Susan is a consultant, mediator, speaker and leads Steinbrecher & Associates, Inc., a management consulting firm.

 

“Never look down on anybody unless you’re helping them up.” -Jesse Jackson

 

Leading From the Heart

What is your definition of “Heart-Centered Leadership”?

Heart-Centered Leadership means having the wisdom, courage and compassion to lead others with authenticity, transparency, humility and service.

 

“You lead by encouragement and inspiration, not by fear and control.” -Susan Steinbrecher

 

Anyone can be a heart-centered leader if he or she has the determination and daily commitment to practice certain core principles.  The root or basis of these principles is what we call “the power of the human element.”  Two things are required to tap into and unleash the human element.  The first is your ability to listen or, even better, your ability to learn how to listen.  The second is your own willingness to clear personal obstacles, in other words, your own story and organizational obstacles that get in the way of this deeper listening.

 

“If you stand straight, do not fear a crooked shadow.” -Chinese Proverb

 

3 Differences of a Heart-Centered Leader

Off the top of your head, what 3 things are different about a heart-centered leader?

  1. The focus is to serve the people that you are leading, not the other way around.
  2. A heart-centered leader tells the truth.  If you are not able to provide information when asked, you must be willing to explain why you aren’t at liberty to share that information.
  3. A heart-centered leader does not judge or assume, but comes to understand, asking the right questions instead rushing to judgment and assumption.

Our book outlines some key guidelines for heart-centered behavior. But in order for this behavior to be authentic, it has to come from a place of emotional resonance and coherence. You have to believe in what you are doing. It has to resonate with you. Ultimately, a heart-centered leader leads from principles, values, and virtues.

 

“Since in order to speak, one must first listen, learn to speak by listening.” -Rumi

 

Encouraging Leaders to Have an Open Mind

How do you encourage leaders to be open-minded?

I ask them to reflect on a time in their career when being open-minded paid big dividends and why.  I also ask them to tell me of a time when they were not open-minded and what happened.  I find that if people can reflect on their own experiences, they can piece together the benefits of being open-minded much faster than me pointing out the rewards of being open-minded.

0615891195Another approach is to ask leaders to imagine how differently they would communicate with an associate if grounded in this key principle: people have positive intentions.  It requires revising certain ways of thinking, such as taking sides in a conflict, and replacing them with healthier habits of mind — observing the perspective of both sides.  It involves identifying and taking responsibility for your own mental tendencies, including an inclination to stereotypes and making snap judgments about what people “should” do.  It also means flexing your empathetic muscle.  As a result, you gain a greater understanding of the causes of atypical behavior and problems that result from that behavior, as well as insight into the best solution.

 

“Wisdom is knowing what to do next; virtue is doing it.” -David Starr Jordan

 

Leaders Need to Let Go

Often leaders feel like they need to seize the reigns, and yet you talk about the importance of letting go.  Tell us more about that.

How to Ruin a Business Without Really Trying

Woman stressed is going crazy pulling her hair in frustration.

 

  • Would you like to ruin a business?
  • Have you been looking for tips that will guarantee you to fail?
  • Want to screw up your next big deal?

I didn’t think so.  That’s why you should read my friend, MJ Gottlieb’s new book How to Ruin a Business Without Really Trying: What Every Entrepreneur Should Not Do When Running a Business.

Because it will save you a lot of time, money, pain and aggravation to learn from someone else’s mistakes rather than your own.

Don’t own a business?  His advice isn’t just for entrepreneurs.  The same advice for an entrepreneur applies in the corporate world.

I recently had the opportunity to ask MJ to share his perspective with you.  He writes with an honesty and humility about his trials and mistakes that will draw you right in.

 

Fact: 90% of start-ups fail and 70-80% of all businesses fail within 10 years.

 

Learn What NOT to Do

MJ, why a book on ruining a business?

When an entrepreneur starts a business, a tremendous amount of time, effort and (often) money is spent and great sacrifices are made at the expense of friends and family.  That is a fact.  It is also a fact that losing (ruining) a business after all that sacrifice can be an extraordinarily painful experience.  What most people don’t realize is that they can significantly mitigate the risk of failure by learning from the mistakes of others before the clock starts and the stakes are for real.  If you truly study brands, you will see a pattern of common-thread mistakes that most businesses both past and present seem to share in common.  The ones who are willing to recognize a mistake and quickly adapt, adjust and modify will survive, the rest disappear.

 

“Only brands willing to recognize a mistake and adapt, adjust and modify will survive.” -MJ Gottlieb

 

It’s not that aspiring entrepreneurs don’t want to learn from failure, I think society is simply focused too much on the end result (the success) and is viewing things through rose-colored glasses.  Most of the information that I come across focuses on the small percent who are succeeding, as opposed to studying and learning from the vast majority who are not.

Statistics show 90% of start-ups fail and 70-80% of all businesses fail within 10 years.  Despite these facts, the market is flooded with how-to books and courses on how to succeed.  Here’s my concern with this.  Every business is different with its own unique blueprint to success, so there is absolutely no way you can tell someone how to run their business.  You can, however, find the key mistakes that most businesses seem to share in common to start to swing the percentages in the other direction and give more hope to the entrepreneur.

 

Learn From Adversity

How has adversity helped make you who you are?

I think it’s all about one’s perspective on the word.  Corny as it may sound, I have come to crave adversity and look at it as yet another great opportunity to grow.  The only reason I can see that perspective is because I operated from the other side for a very long time.  When I was young, I ran away from everything and accomplished nothing.  It wasn’t until I was able to turn around and look adversity in the face that I was able to take the power away from it and use it to my advantage.

I think adversity not only makes you a stronger person but also is the only way to see what you are truly capable of.  I think there should always be adversity to some extent, as it will always challenge us to grow.  Without adversity there is complacency, which I think is a four-letter word.  I always want some goal ahead of me that I have not yet achieved or some stumbling block I have not quite yet moved aside.

 

“It is just as important to know where you are as it is to know where you want to be.” -MJ Gottlieb

 

For example, basketball was my salvation, and I played every day until I couldn’t play anymore and had to get my hip replaced. I still do two hours of physical therapy every night because I not only want to get back on the basketball court but also want to dunk again.  The doctor says that is most likely not going to happen.  I say it most likely will.  While he is showing me the adversity, I choose to take it as a challenge and an opportunity.

How To Ruin 3D 2

Take me to the dark days after your first business failed.  What were you thinking? 

Creating A Buzz: 7 Ways to Stand Out

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It’s a honey festival.  What would you expect?  Honey!  And honey is a commodity, right?  It’s all the same.  If you want honey for a recipe, or to add to some hot tea, you pick up some honey at the store.

My view of honey completely changed when I attended the Lithopolis Honey Festival last year. I left not only with new information about honey, but also with observations on how to make nearly any business stand out.

Arriving at the festival, I see the streets have been closed to allow for tents to fill the streets.  People are everywhere, crowding the vendors.  With so many people milling about, how do the honey manufacturers attract customers?

As my family walks down the street, we stop to visit each table.  I begin to notice how wrong I am about honey.  There are innumerable ways that each company is different.

STAND OUT

Here are a few ways that I began to see the differentiation:

Don’t sell a product.  Entertain the audience.  Crowds gather around to see “Bee Beard.”  That’s where a man of perhaps questionable sanity has somehow managed to create a beard made of hundreds of bees, extending down his body and circling his head.  From the number of people crowding around, it’s clear that this team is successful.  It’s hard not to stop and take a look.

Use personality to develop loyalty.  Some honey producers were present in the aisles with a friendly smile. They were not accosting or overly aggressive.  These savvy customer service honey sellers met us in an engaging way, answering questions.  Somehow in the first minute, we know the history of the business and the family.  You don’t need an academic study to know that you are more likely to buy from someone you know.

Create unexpected flavor.  Did you know that honey could come in cinnamon or raspberry?  Resisting the chance to try various flavors is futile, so we stop and taste a few.  Now we are comparing notes, sharing tastes.  Engaging with a product in this way increases the sale opportunity.