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.

The Dangers of Always Trying To Be Right At Work

bigstock-Businesswoman-in-bright-office-49013006

In a previous post, I shared how the joy of being right can often be wrong.  Trying to be right at all costs comes at a surprisingly high price.

  • We waste time and energy.
  • We damage relationships.
  • We refuse to listen to the other side.
  • We cause others to stop sharing freely.
  • We stop listening as we develop arguments.

 

“Choose being kind over being right and you’ll be right every time.” –Richard Carlson

 

For all of those reasons and more, being right is not always worth the cost.

When you are right, what happens?  Others applaud your brilliance!  They nod to you as you pass them in the hall.  A gleaming trophy arrives for your new corner office, allowing everyone to know that you are “RIGHT.”

Ah, no. Not exactly.  Pretty much none of that happens.

It’s far better to allow others to be right.  Let little offenses pass.  Save the disagreements for the big things.

 

“Celebrating accomplishments is one of the fastest ways to change a culture.” -Skip Prichard

 

That’s my advice for individuals.  It happens in organizations, too.  When an entire organizational culture is centered on being “right,” what happens then?

You will find a culture:

With more meetings. Instead of having a conversation about an issue, everyone works hard to be correct.  That means that there are meetings to prepare for meetings to prepare for meetings.

With longer meetings.  Everyone needs time to share the “right” point of view.  Everyone needs the microphone to prove her point or to highlight his knowledge.  And we need time to point out the flaws in everyone else.

Fred Returns With New Ideas to Deliver Extraordinary Results

iStock_000005479230Small

Photo courtesy of istockphoto/MichaelShivers

He’s an international bestselling author of eight books who regularly tops the bestseller lists, a global leadership guru and one of the most in-demand speakers on the subjects of leadership, customer service and team building.  His many awards include the Cavett Award, the highest award the National Speakers Association bestows on its members.  He’s a member of the Speaker’s Roundtable.Mark Sanborn Picture

As you’d expect from a world authority, his clients include the biggest corporations, names like Cisco, Costco, FedEx, Harley Davidson.  Add the important alphabet companies like IBM, GM, KPMG, RE/MAX and ESPN.

Outside of all of that, Mark is one of the most decent people I’ve ever met.  He’s smart, caring, and he passionately wants to serve others.

WHAT IS A FRED?

Nine years ago, Mark Sanborn invited us to meet his own postman, Fred Shea.  Fred embodied true success by taking what seems to be an ordinary job and making it extraordinary.  To this day, when I see someone who serves in an extraordinary way, I think, “There’s a Fred!”  The Fred Factor became an international phenomenon, selling millions and millions of copies.

FRED RETURNS

This week, Fred returns in Fred 2.0: New Ideas on How to Keep Delivering Extraordinary Results.  Last summer, I had the opportunity to get to know Mark.  When he told me that Fred 2.0 was on the way, I couldn’t wait to learn more.Fred 2.0

Mark, let’s start out with two questions many people ask you.  Is Fred real?  And, if he is, are you in touch with him?  Maybe one more: Does he know he’s the star of this book?

Skip, Fred is very real and still delivering mail in Denver, CO. Over the years we’ve maintained a friendship and connect periodically for lunch or dinner. Fred is a big supporter of The Fred Factor and Fred 2.0, and in the new book I share—with his permission—much more about him, his background and his beliefs.

Move TO your future not AWAY from your past

2530383950_1a38e29e7c_z

Photo by Fellowship of the Rich on flickr.

People seem to be motivated by one of two forces.  Either toward or against.

Both can be equally powerful motivators, but one seems to last.

Why are you in motion?

When I interview people for a job, I often ask questions about how the individual made career decisions.  Some job changes were motivated by moving AWAY from something—a bad boss, a negative work environment, low pay.  Other people make a change to move TOWARD something—a new opportunity, the ability to make a bigger impact, a better use of talent.

Though it’s not scientific validation, I’ve found that the people moving TOWARD the new opportunity are more successful, happier, and continue on an upward career path.  These people are energized by the future, by what’s to come, by what’s possible.

Contrast that with the people moving AWAY from a job.  It seems that the very same things that they didn’t like about the one job magically seemed to follow them to the next!

Moving TOWARD is more powerful than moving AWAY.

Leading Through the 5 Stages of Change

Farewell Atlantis

In yesterday’s post, I interviewed Jim Huling about the disciplines of execution.  The concepts in the 4 Disciplines of Execution were so fascinating, we continued the conversation.

Much of leadership is influencing people to change.  You talk about the five stages of changing human behavior.  Would you explain these and is there one stage more difficult to move through than the others?

Because changing human behavior is such a big job, many leaders face challenges when first installing 4DX.  In fact, we’ve found that most teams go through five distinct stages of behavior change.

Stage 1: Getting Clear – The leader and the team commit to a new level of performance. They are oriented to 4DX and develop crystal-clear WIGs (wildly important goals), lag and lead measures, and a compelling scoreboard. They commit to regular WIG sessions. Although you can naturally expect varying levels of commitment, team members will be more motivated if they are closely involved in the 4DX work session.

Stage 2: Launch – Now the team is at the starting line. Whether you hold a formal kickoff meeting, or gather your team in a brief huddle, you launch the team into action on the WIG. But just as a rocket requires tremendous, highly focused energy to escape the earth’s gravity, the team needs intense involvement from the leader at this point of launch.

5 Stages of Behavior Change

  1. Getting Clear
  2. Launch
  3. Adoption
  4. Optimization
  5. Habits

Stage 3: Adoption – Team members adopt the 4DX process, and new behaviors drive the achievement of the WIG. You can expect resistance to fade and enthusiasm to increase as 4DX begins to work for them. They become accountable to each other for the new level of performance despite the demands of the whirlwind.

Stage 4: Optimization – At this stage, the team shifts to a 4DX mindset. You can expect them to become more purposeful and more engaged in their work as they produce results that make a difference. They will start looking for ways to optimize their performance—they now know what “playing to win” feels like.