Character is about a lot more than ethics — and fostering a culture where it is valued equally alongside competence can result in better decisions and better outcomes.
For all of the attention that leader character gets when we witness its negative extremes — such as when an authoritarian CEO presides over a corrupt or an abusive culture — most organizations give surprisingly little thought to what is actually one of the most significant available levers to effect positive organizational development.
Organizations that fail to hire for and develop positive character among its leaders are missing an opportunity. In fact, one study found that organizations with leaders of high character — those whose employees rated them highly on integrity, responsibility, forgiveness, and compassion — had nearly five times the return on assets of those with low character.1
Why is this aspect of leadership and organizational culture so overlooked? Over more than a decade of investigating leader character in organizations, we’ve found that leaders largely underestimate and misunderstand the concept of character. They marginalize it as just being about ethics rather than recognizing it as the foundation of all judgment and decision-making. They generally assess their own character as “good enough.” They believe it is a fixed trait rather than a quality that can be developed, and so they don’t see how individual strength of character can be embedded and scaled in their own organizations and cultures. Simply put, they don’t see that competence and character go hand in hand.