Is there a Return on Character in leadership?

PETER BUYTAERT
2018-01-26
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Research by KRW International found that CEO led organizations whose employees gave them high marks for character had an average return on assets of 9.35% over a two-year period. That’s nearly five times as much as what those with low character ratings had; their ROA averaged only 1.93%. [1]

Regardless of this research finding I believe it is common sense that hiring for character is at least as important as hiring for competence and not just at the CEO level. At all managerial levels you want to have people that share values and beliefs with the right attitude. Living in our increasingly volatile uncertain complex and ambiguous (VUCA) world hiring responsible and wise decision-makers will support an organizations sustainability mitigate risks and build formidable competitive difference. In a VUCA world we need leaders that care beyond short term financial gains understand their personal limits and listen to improve as well as intuitively know the right choices to make. 

Yet during my 20+ years as a corporate executive as well as the recent 5+ years in leadership consultancy I observe that recruiters both in-house and external spend hardly any time during interviews on probing character beyond skill. Pressured by time and KPIs to fill positions we just scratch the surface of behaviors linked to skill and job competency rather than gaining a deeper understanding of values beliefs and attitudes which can secure a better long term hire with the right motivation to perform. 

With all the scandals (Madoff Barclays UBS Volkswagen FIFA etc.) that our societies are experiencing and continue to deal with integrity and values should be on top of the list of any recruiter who really wants to make a stand with a safety first approach by hiring talents who take responsibility seriously. Values beliefs and attitudes are not developed by checking the boxes of experience education and behavioral tools alone. In ion we need to go beyond the smart communication skills and let a person show their true self.   

This is exactly why I started GLO (Good Leaders Online) now three years ago. We did not just want to create another recruitment and leadership development company but truly have a purpose to make a difference in society by helping companies to recruit more responsible leaders. With the right assessment process we can do this smartly with the focus on achieving positive impact on retention performance and overall happiness of the team.  

Of course the question is how do you assess responsibility in leadership?

Based on research by my co-founder Dr. Mike Thompson combined with personal insights gained in the front-line of leadership and consultancy we believe that responsible leaders score on three crucial dimensions of decision-making with resulting behaviors:

  1. They Care

Leaders that show care actively listen and show empathy. They consider the common good beyond self interest and ego with a high degree of ethical awareness and integrity.

  1. They Know

Responsible leaders are aware of their beliefs and continually seek to validate them. They strive to gain facts beyond assumptions. They are also willing and able to change beliefs and adapt to new realities.

  1. They Sense

In a complex and ambiguous world sensing intuitively what is right or wrong is crucial to make good decisions. The anxiety and stress that comes with uncertainty and volatility also requires emotional regulation not to have decisions clouded by our often dominant feelings of fear. 

We have been working with this Caring Knowing Sensing assessment model both in recruitment coaching and leadership development with proven results for three years now. 

During our many corporate engagements It has been an eye opener to observe how difficult it really is for leaders to listen regulate emotions and truly trust their gut. Nevertheless we also see a lot of hope in Generation Y with a keen awareness of the common good interest to pursue purpose and guided by a renewed sense of entrepreneurial intuitive thinking. 

As we progress with our innovative approach to assessing responsible leaders we would welcome your feedback and invite you to join or assist our new pilot programs to help us continually improve our scan for responsible decision-making.

 

[1] https://hbr.org/2015/04/measuring-the-return-on-character