April 20, 2015

Excerpts: Return on Character

By: Dylan Schleicher @ 10:00 AM – Filed under: Leadership & Strategy, Personal Development & Human Behavior

ReturncharacterIf you really needed a reason to be a stand-up character at work, it turns out that it's profitable. Fred Kiel is the co-founder of KRW International, and his new book, Return on Character is the result of their "seven year study of nearly 9,000 employees and the 84 CEOs and executive teams they work for at Fortune 500 and 100 companies and, privately held firms and nonprofits." Released by Harvard Business Review Press, you can expect the research to be thorough and well-documented, and it shows a direct link between CEO character and business success. But what does character look like in the real world, in the business world? What exactly is character? Kiel addresses that in Part 1 of the book, "Character Defined."

Coming to Terms with Character

When you think of the term character, what definition comes to mind? Many people immediately respond with answers such as “honesty” or “truthfulness,” but human character actually encompasses much more than those fundamental elements. It’s also much more than loyalty, or integrity, or spiritual beliefs, fairness, or any other single value or principle.

Of course, there are many definitions of character, but American biologist, naturalist, and author E. O. Wilson offers one in his book, Consilience: The Unity of Knowledge, that effectively reflects the many facets of this complex concept (emphasis mine):

True character rises from a deeper well than religion. It is the internalization of the moral principles of a society, augmented by those tenets personally chosen by the individual, strong enough to endure through trials of solitude and diversity. The principles are fitted together into what we call . . . the integrated self, wherein personal decisions feel good and true. Character is in turn the enduring source of virtue. It stands by itself and excites admiration in others. It is not obedience to authority, and while it is often consistent with and reinforced by religious belief, it is not piety.

Let’s look more closely at Wilson’s assertion that character is the “internalization of the moral principles of a society.” He’s telling us that a morally intelligent person is one who knows what behavior is expected by his or her specific culture and context as well as by human societies in general. Fortunately, we have some idea of what kinds of moral principles shape nearly every culture’s expectations for social behavior. Various cultural anthropologists have cataloged lists of moral principles that they claim are universal for all humans, lists that typically include some forms of expression for fairness, compassion, and honesty. Anthropologist and author Donald Brown, for example, has identified nearly five hundred behaviors and characteristics that all human societies recognize and display. We drew from this list when we chose the four universal moral principles of integrity, responsibility, forgiveness, and compassion—principles demonstrated in a wide range of common human behaviors and attributes, including:

• Distinguishing right from wrong (Integrity)

• Language employed to misinform or mislead (Lack of integrity)

• Redress of wrongs (Responsibility)

• Self-control (Responsibility)

• Cooperation (Forgiveness)

• Mediation of conflict (Forgiveness)

• Empathy (Compassion)

• Attachment (Compassion)

• Affection—expressed and felt (Compassion)

Steven Pinker, in The Blank Slate: The Modern Denial of Human Nature, lists all of Brown’s universals and, about them, he says, “Thus while conflict is a human universal, so is conflict resolution. Together with all their nasty and brutish motives, all peoples display a host of kinder, gentler ones: a sense of morality, justice, and community, an ability to anticipate consequences when choosing how to act, and a love of children, spouses and friends.”

Further evidence of these human universal moral principles comes from a study that compared American children with those in India. As my coauthor and I wrote in Moral Intelligence, “The differences in values were predictable: Indian children displayed more deference to elders and acceptance of tradition, while American children value personal autonomy and freedom. But their moral codes were virtually identical. Both groups of children believed that it was wrong to lie, cheat, or steal, and both thought that it was important to treat the sick or unfortunate with kindness.”

So while societies vary in how they honor and express these moral principles—parents in one culture may have a very different way of teaching their children about truthfulness than those in another—in some form, these principles are embedded in the cultural norms of all societies.

Wilson also makes a powerful point when he says that strong character leads to the integrated self—a joining of head and heart, where thoughts, feelings, and actions are in harmony, resulting in behavior that demonstrates the character of an individual who walks the talk of his or her belief system. Indeed, character has to be expressed through behavior. Integrity, responsibility, forgiveness, and compassion don’t live inside us. Our behavior, especially as demonstrated through our relationships with others, is where our character comes to life. Which means that, despite the common wisdom, character isn’t some hidden quality that no one can really know or assess. We reveal our character all the time through observable behaviors: in the way we treat other people. As we mature, these character-driven behaviors become automatic reflexes, the character habits that express our guiding principles and beliefs.

Beyond the way we internalize universal moral principles, therefore, the definition of character that informed our ROC research includes an understanding of how we demonstrate those principles in relationship to other people. Accordingly, we define character as an individual’s unique combination of internalized beliefs and moral habits that motivate and shape how that individual relates to others.

While this definition offers some solid footing for our observations about human character, it doesn’t pave over every gap in our understanding. Each of us constantly makes decisions about how to interact with other people, and each of those decisions has the potential to either harm or enhance the other person’s well-being. So it would seem logical to assume that we are moral and have strength of character when our behavior enhances the well-being of others, and we are immoral and have less strength of character when our behavior harms or detracts from the well-being of others.

Of course, the real world is complex, and so is the nature of our character. Many of the choices we make, for example, may enhance the environment or outcomes of one person, while at the very same time wrecking the lives of others. Finding a balance, wherein our behaviors promote the most good for the most people, is the ongoing task of all principled people of strong character. Adam Smith, the widely quoted source of the “invisible hand,” which has become shorthand for the notion that the unfettered and unregulated free market operates so that everyone benefits, was not an economist but a moral philosopher.

In fact, while The Wealth of Nations is currently widely quoted, it was Smith’s other book, The Theory of Moral Sentiments, that was most popular in his day. Republished in 2013, the publisher has this to say: “Without Smith’s essential prequel, The Theory of Moral Sentiments, the more famous The Wealth of Nations can easily be misunderstood, twisted, or dismissed . . . Smith’s capitalism is far from a callous, insensitive, greed-motivated, love-of-profits-at-any-cost approach to the marketplace, when seen in the context of his Moral Sentiments.”

In general, since the days of Adam Smith, our society has recognized that honoring universal moral principles such as integrity, responsibility, forgiveness, and compassion leads to a higher standard of behavior and a safer and more secure world (which, by the way, is good for business, as the ROC research data has shown). The ROC definition of character is woven around those principles, which became the foundation for KRW’s work in assessing leadership character and calculating the value it brings to business results—and to our world.

Excerpted with permission from the publisher, Harvard Business Review Press, from Return on Character by Fred Kiel.
Copyright © 2015 Fred Kiel.
All rights reserved.
This book is available at all bookstores and online booksellers.

About the Author

Fred Kiel, PhD, co-founder of KRW International, is considered one of the founders of the field of executive coaching. Also the author of Moral Intelligence and speaker in the popular TEDx talk "Psychopaths in the C-Suite," he brings over 30 years of experience with Fortune 500 CEOs and senior executives on building organizational effectiveness through leadership excellence and aligning organization with mission.

About Dylan Schleicher

Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.