The character map

Mon 25 May 2015

Nice guys finish last, don’t they? Being a good leader is not quite the same as being a good human being, right? Organisations need to hire or promote leaders based on what they can do for the organisation, not based on the human qualities and character of the candidate, right?

Wrong! Most emphatically wrong, says Fred Kiel in his book Return on Character: The Real Reason Leaders and Their Companies Win

In this book, the author takes us through the findings of a study done over a longish period on the relationship between leadership effectiveness and the leader’s character.

Leadership as a subject has always fascinated people from all walks of life, more so in today’s environment of intense competition between businesses and the increasing opportunities available to both internal and external consumers.

It is probably highly encouraging to learn — for younger managers especially — from the study that leaders with strong character are indeed better leaders than the ones without a strong character foundation. Moreover, the study also stresses that these qualities can be learnt and adopted.

Optimism all over

Given the importance of the subject, and given the quality of the research instruments used, the study can be safely classed as an important addition to the body of work on leadership.

Character itself is well defined and the framework used (of Integrity, Responsibility, Compassion, and Forgiveness) is easy to relate to.

Also impressive is the fact that self-assessment (by the leaders who participated in the study Kiel relies on) is compared with assessment by other employees, for each dimension studied.

The Appendix of the book is a must-read, since it explains the methodology quite well. Another must-read in the book is the few paragraphs addressed directly to the Millennial Generation — those born after 1981. The sheer optimism that reverberates through those few lines is infectious.

And it is not difficult to relate to this optimism in India as well. The overwhelming response to anti-corruption campaigns, the large number of youngsters I come across who actively contribute to social welfare… all these do indeed indicate that a future generation of leaders will be more open to character based leadership.

There can also be no quarrel with the assertion that the focus on short-term financial performance needs to be tempered with a more balanced view of leadership performance metrics.

This would give younger leaders the space to grow into the role, and to stamp their style, which would hopefully include a strong emphasis on character.

Style kills

Despite these positives, this reviewer must point out a few concerns. These concerns don’t in any way detract from the seriousness and intent of the authors or the importance of the findings

First, reading the book brings to mind the old adage “you should start telling a story because you have a story to tell and not because you have to tell a story”. Though the study and the findings are highly interesting, it is not quite clear why they merit a whole book.

In attempting to create a book out of what is essentially a subject for a good paper, the author has created something which is far from easy to read, despite its usefulness.

In fact, the reader is often tempted to read the chapter summaries and skip the detailed writing.

Next, the writing style creates the risk of younger readers not having the patience to add this book to their reading basket.

Another concern would be why is the sample size so small considering that the study was done over a period of seven years — from 2006 to 2013?

Surely, such a small sample size could have been completed in a shorter time-span, or the study could have achieved a larger sample size in such a long period?

Thirdly, why is there so little focus on the actual results delivered? Actually, there is a chapter on Return on Assets, and the chapter says that the leaders with strong character attributes delivered far better RoA than the other leaders.

But we are not told whether these companies always had such superior track records; we don’t know whether the track record improved significantly during the tenure of these specific CEOs. We are also not told how these companies fare in comparison with industry average ROA figures for the respective industries.

Moreover, why is there no focus on studying the impact on the corporate brand? After all, the CEO is the First Brand Manager in any organisation, and impact on brand value should be a key performance metric.

As a result, the reader who would like to see more solid research is left wondering if the study is conclusive — do leaders with strong character attributes actually deliver better value, in addition to managing people better? Do they actually create wealth better?

It would be fair to say that no one has ever doubted that leaders with strong character attributes enjoy greater respect, get better cooperation from other managers, and generally create a better work environment.

Good means business

Further, various studies on ethical business practices and on principle centred leadership and brand development have confirmed that ethical behaviour and principle-oriented business practices ultimately do lead to better brand performance, and hence actually make a lot of business sense. Therefore, leaders who have display strong character are probably doing the right thing for their brand in the very long term.

But surely the crux of the argument is whether they also deliver better business performance and financial results?

An analysis of the above, and of the impact on long-term corporate brand value creation would have been highly interesting.

There have been great leaders who consistently demonstrated great character among statesmen — Mahatma Gandhi, Abraham Lincoln, to name just two. There have also been similar great leaders in the not-for-profit space, most notably in the developing countries.

There are indeed great leaders in the for-profit space who have demonstrated great character-based leadership.

The question is whether this particular aspect of their leadership has positively impacted the business performance of the companies they have led. We would all love to think so. Many of us believe this to be true.

But this book does not quite prove this.

And hence the debate will continue. Do nice guys finish last? When looking for a leader, whom should we choose – the task-oriented person or the people-oriented person? Or is the people-oriented leader likely to deliver on the tasks and results anyway?

Meet the author

Fred Kiel is a founding partner of leadership development and strategic analytics firm KRW International and a pioneer in executive coaching. For over 30 years, he has trained Fortune 500 CEOs and senior executives.

Ashok R Sankethi is the CEO of Kaybase, a research-based-consulting firm


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