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November 15, 2017

1163The desire of every leader is to create a stable, healthy, and robust organization that is competitive, profitable, and rapidly growing.  There are numerous new books and articles published each year that recommend a host of ways to accomplish this elusive goal.

An internet search of the best business books for 2017 provides an interesting collection of titles, and nearly all have one thing in common—a focus on tactics and skills for achieving business success. Rare is the book that identifies leadership character (who the leader is as a person) as an important factor in achieving success.

the who + what formula

Our seven-year research project examined the connection between the character reputation of the senior leadership team and business results and it revealed some startling facts.

Strong character senior teams dramatically outperform weak character teams in three important ways:

  • profitability: Strong character senior teams bring an average of nearly five times more to the bottom line than weak character teams.
  • workforce engagement: Strong character teams have higher levels of workforce engagement (26% greater) than weak character teams, and finally,
  • risk: Strong character teams have fewer compliance issues and legal challenges stemming from ethics violations.

the who + what formula

SC = Results

C (character) has an exponential impact on S (skills) leading to Results.

The character habits of a senior leadership team either magnify or undermine the impact of their business skills.

A focus on growth strategies and innovation mean little if the workforce does not trust senior leadership. The character reputation of the senior leadership team either magnifies or undermines the impact of their business skills.

Your character reputation matters far more than how skilled you are in finance, marketing, strategy, and execution.

workforce engagement

The senior leadership team does not produce the actual products or services. It is the workforce that produces the products or services the business sells to its customer.

The job of the senior team is to inspire, energize, and provide guidance and resources to those people who actually do the work.

They can only do this effectively if they have a strong character reputation with the workforce. Only when the typical worker believes that the senior team tells the truth, owns up to their own mistakes, makes it psychologically safe to tell them the truth, and truly cares for them as people (not as numbers or nameless ‘production units’) will they be eager to come to work and produce the best results they can for the company.

Strong character teams know how to create the organizational conditions that energize a workforce. First of all, they create a culture of respect. They care for and nurture employees. Secondly, they insist on transparency and fairness in promotions, recognition, and hiring practices. They infuse the organization with positive energy. And finally, they hold everyone accountable.
They expect the best and look for it. They are not afraid to move an individual to another job or even out of the company, but they do it with kindness, generosity,
and grace.

Our research discovered that strong character senior teams on average enjoy a 26% boost in the level of workforce engagement.

it is a matter of habit

The character reputation of the senior team is based on their daily habits of interaction with the workforce. And, like all habits, they operate at an unconscious level. Our brain is constructed so that it seeks to find patterns of behavior and then reduces it to the level of the unconscious. Our character habits are just like other automatic behaviors. You do not stop and think before you put your foot on the brake at a stop sign. You just automatically do it. Likewise, you do not stop and think about how to treat other people–you just treat them in the habitual ways you have acquired.

The Exhibit 01 below shows four major habits. We call these the team’s ‘character habits’.

No doubt, most members of the C-suite intend to treat others well.  They understand intellectually the connection between how you treat others and their engagement and productivity.

But, sadly, the C-suite is often unaware of their habits. Over the years, they may have unintentionally drifted into neglectful ways of treating others.

When people at the lower levels of an organization feel de-personalized and treated as if they do not matter, it is no surprise that engagement suffers, productivity goes down, innovation is stalled, and the bottom line plummets.

place ‘exhibit 01’ here

the habit that matters the most

Men dominate leadership positions worldwide. Nearly all men have been culturally trained to place value on the achievement of tasks and to devalue relationships in the work environment. The labels given to these two respective skills reflect this cultural training. Relationship skills are called ‘soft’ skills. Task skills are called ‘hard skills.

The world of business is just waking up to the fact that the ‘soft’ side—forgiveness, compassion—is perhaps more important than they previously thought.

Our groundbreaking research published by Harvard Business Review Press in 2015, Return on Character: The Real Reason Leaders and Their Companies Win, is helping turn this tide. We provided data that shows that leaders who demonstrate strong caring skills bring nearly five times more to the bottom line than the leaders who are uncaring and self-focused.

In future years, the findings in this book will very likely be heralded as the turning point where the previous ‘soft’ skills became the ‘hard’ skills.

leadership blindness

Leaders who are wonderfully warm and connected to their friends and family outside of work, tend to check those skills at the door when they come to work. The individuals they lead are often on the equivalent of a relationship ‘starvation’ diet.

Yet we know that the emotional connection to others is an important factor in the creation of value and the bottom line.

We have shown with our research that the character habit of caring for others brings value to the bottom line.  This is the most under-leveraged force—the one most neglected by leaders.  Neglecting this habit is a form of leadership ‘blindness’.

caring for others

There are, of course, a multitude of ways to demonstrate care for others:

  • Looking them in the eye
  • Using their name
  • Showing interest in them–their personal lives, their career objectives
  • Admitting your own mistakes
  • Asking them for help
  • Actively listening to what they have to say
  • Sharing information with them
  • Remembering previous conversations

This ‘keystone character habit’ is the activator switch—it turns on the energy for an organization.  And workforce engagement depends on energy.

Employees who begin to feel depressed on Sunday afternoon about having to go to work on Monday morning, can become transformed when a new leader takes over who shows that he or she cares for people. Low energy becomes suddenly replaced with enthusiasm and high energy.

it is wired into our dna

Humans are a cooperative species. Solitary confinement is the cruelest of punishments. Babies who have an unconnectable caretaker during their first few months of life are scarred forever.

Because the need for human connection is so wired in, it is a ‘very’ dependable source for engaging others. Even autistic individuals respond to connection with others, but on their own terms. The need for connection with others is a universal need. Everyone has an ‘energizing’ switch. All leaders need to do is to touch the switch! And that is accomplished by showing that you care for the person as a human being.