Christian Character Research Powerpoint

Transformational change and leader character

Gerard H. Seijts *, Jeffrey Gandz

Ivey Business School, Western University, 1255 Western Road, London, Ontario N6G 0N1, Canada

Business Horizons (2018) 61, 239—249

Available online at www.sciencedirect.com

ScienceDirect www.elsevier.com/locate/bushor

KEYWORDS Leadership; Leader character; Transformational change; Performance; Leadership qualities

Abstract Leader character is foundational to good leadership. We define character as an amalgam of virtues, values, and personality traits that influence how leaders behave in various contexts. Our research identified 11 dimensions of leader character and 60-plus character elements that are illustrative of those dimensions. We inte- grate two frameworks: John Kotter’s eight-step model of leading change and our framework of leader character dimensions and associated elements. Specifically, the objective of this article is to illustrate which dimensions of leader character come into play at various points in the organizational change process and how their presence or absence affects the outcomes of the change process. Beyond that, we draw inferences about how organizations might develop character among all leaders but especially those younger, less experienced leaders who will become tomorrow’s leaders of change projects. # 2017 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.

1. Transformational change

As educators, researchers, and consultants, we have worked with many organizations–—some suc- cessful, some not–—engaged in transformational change. We have been brought in at various junc- tures: the very earliest stages of change, after things started to go wrong and, occasionally, at the salvage stage when it was clear the desired change was not going to happen.

* Corresponding author E-mail addresses: [email protected] (G.H. Seijts),

[email protected] (J. Gandz)

0007-6813/$ — see front matter # 2017 Kelley School of Business, I https://doi.org/10.1016/j.bushor.2017.11.005

Throughout, our ideas about leadership have evolved and we have begun to place a strong em- phasis on leader character in our research, student programming, and outreach activities. Our interest in leader character emerged from the 2008—2009 financial crisis and a qualitative study we conducted that focused on why some organizations in the financial sector failed or had near-death experien- ces while others prospered, avoiding risks that they did not understand or could not manage (Gandz, Crossan, Seijts, & Stephenson, 2010). In the course of this study, leader character was a recurring theme in our conversations with leaders in the public, private, and not-for-profit sectors. Based on both qualitative and quantitative research since

ndiana University. Published by Elsevier Inc. All rights reserved.

240 G.H. Seijts, J. Gandz

that time, we have defined leader character as an amalgam of virtues, values, and personality traits that strongly influence how leaders behave in vari- ous contexts (e.g., Crossan et al., 2017; Crossan, Seijts, & Gandz, 2016).

Most recently, we have been thinking and writing about the connection between success in leading deep and comprehensive change and the character of those who succeed in change leadership roles. In this article, we integrate two frameworks. The first framework is John Kotter’s (1996) eight-step model of leading comprehensive change that, in one form or another, is the starting place for most executives, directors, entrepreneurs, consultants, or others charged with leading change or helping others to do so. The second framework (see Figure 1) is based

Figure 1. Character dimensions and associated elements

on our own research on leader character and is designed to give executives an accessible language as well as a set of relevant behaviors associated with character in the context of business organiza- tions (Crossan et al., 2017; Crossan et al., 2016).

The leader character framework is based on research with over 2,500 leaders from North Amer- ica, Europe, Asia, and Latin America. The frame- work postulates that there are 11 dimensions of leader character that influence individual and or- ganizational outcomes independently and interac- tively. For example, effective coaching and development requires the leader to act with integ- rity, courage, temperance, and humanity to get meaningful results; successful team decision making requires the leader to demonstrate collab-

Transformational change and leader character 241

oration, humility, accountability, and judgment; and delivering a compelling presentation requires the leader to display transcendence, drive, and integrity. Our research also identified a set of 60- plus behaviors or character elements, which help individuals unpack character in a way that makes character-related leadership behaviors observable, measurable, and actionable. We have been working with organizations that have built explicit recogni- tion of character in their leadership development processes and are taking actions to enhance and build stronger character in their leaders.

The objective of this article is to illustrate which dimensions of leader character come into play at various points in the organizational change process and how their presence or absence affects the outcomes of the change process. Beyond that, we draw some inferences about how organizations might develop character among younger, less expe- rienced leaders who will become tomorrow’s lead- ers of change projects.

2. Leading change

Kotter identified eight steps in leading successful organizational change. They are (Kotter, 1996):

1. Establish a sense of urgency; without this, the momentum for change will die far short of the finish line.

2. Create a guiding coalition–—a group of people with a shared objective, the credibility to guide the change process, and power. This is essential since no leader can lead the change process alone.

3. Develop a vision and strategy, helping to break through the myriad of internal and external forces that support the status quo and encourage individuals to initiate coordinated actions that are necessary to move in the desired direction for change.

4. Communicate the change vision, ensuring that people in the organization both understand and eventually accept the vision.

5. Empower employees for broad-based action. This is intended to remove barriers to implemen- tation of the change as well as build their en- gagement and commitment to seeing the process through. These barriers may include structural barriers, the lack of needed skills, and personnel and information systems as well as managers who discourage actions aimed at implementing specific initiatives.

6. Generate short-term wins to help build the cred- ibility needed to sustain the efforts to bring change to the organization. Visible, unambigu- ous wins create the necessary momentum that propels the change forward.

7. Consolidate gains and produce more change to prevent leaders from declaring victory too soon and moving on. For example, deep and compre- hensive change often involves multiple change projects–—HR systems, reporting structures, in- tegration of systems, and so forth.

8. Anchor new approaches in the culture so that new practices can grow deep roots, including newly desired behaviors. Absent deep roots, these practices will be fragile and people may revert to their old routines.

3. Leader character

Recent studies have shown that character is foun- dational to the quality of decision making and hence an avenue through which organizations can enhance performance (e.g., Bright, Cameron, & Caza, 2006; Crossan et al., 2017; Sosik, Gentry, & Chun, 2012). As we look back on major transformative changes, we can see clearly the character dimensions iden- tified in Figure 1 and how they played out in the actions of those who led these changes. Below, we describe the 11 dimensions of leader character and their importance for change.

3.1. Drive

The leader strives for excellence, has a strong desire to succeed, tackles problems with a sense of urgency, and approaches challenges with energy and passion. Without drive, leaders would not even tackle change since, as Machiavelli said in The Prince more than 500 years ago: “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” This certainly is what large-scale, transfor- mative change is all about.

3.2. Collaboration

The leader values and actively supports the devel- opment and maintenance of positive relationships among people, encourages open dialogue and does not react defensively when challenged, and is able to connect with others in a way that fosters the productive sharing of ideas. While there are exam- ples of change that are driven by individual leaders

242 G.H. Seijts, J. Gandz

who act alone, most complex organizational change requires teamwork, the formation of coalitions, and acceptance of change by those affected by it. Real collaboration is a prerequisite for acceptance.

3.3. Humanity

The leader demonstrates genuine concern and care for others; appreciates and identifies with others’ values, feelings, and beliefs; and understands that people are fallible and offers opportunities for individuals to learn from their mistakes. Inhumane change such as ‘slash-and-burn’ tactics may be powered through and may even be effective in the short-term. However, it leaves a toxic and corrosive culture that makes it more difficult to generate and implement subsequent change ef- forts.

3.4. Humility

The leader understands the importance of thought- ful examination of one’s own opinions and ideas; does not consider oneself to be more important or special than others; is respectful of others; and appreciates others’ strengths and contributions. Even the best change plans encounter problems in their execution. Leaders who do not have the humility to recognize their own errors and omissions will not make the necessary course corrections to ensure success.

3.5. Integrity

The leader holds oneself to a high moral standard and behaves consistently with ethical standards even in difficult situations, is seen by others as behaving in a way that is consistent with their personal values and beliefs, and behaves consistently with organizational policies and practices. When people feel misled, manipulated, or sandbagged into accepting changes, they will be lukewarm in their support or could turn from supporters to resistors of the current and future change efforts.

3.6. Temperance

The leader conducts oneself in a calm and com- posed manner, maintains the ability to think clearly and responds reasonably in tense situations, com- pletes work and solves problems in a thoughtful manner, and stays grounded. Seldom does every- thing planned meticulously in a complex change effort actually happen. Change sometimes requires more patience, calmness, and preparedness to

adjust to myriad actions and schedules . . . all of which require a degree of temperance.

3.7. Justice

The leader ensures that individuals are treated fairly and that consequences are commensurate with contributions, provides others with the oppor- tunity to voice their opinions on processes, provides timely and candid explanations for decisions, and seeks to redress wrongdoings inside and outside the organization. When change is viewed as unjust by those affected by it, their support may turn into overt or covert resistance.

3.8. Accountability

The leader willingly accepts responsibility for de- cisions and actions, is willing to step up and take ownership of challenging issues, reliably delivers on expectations, and can be counted upon in tough situations. Promoters of change must be prepared to bear the consequences–—good or bad–—if they are to be viewed as effective leaders.

3.9. Courage

The leader does the right thing even though it may be unpopular or actively discouraged, or even result in a negative outcome for him or her personally; shows determination in confronting difficult situa- tions; and rebounds quickly from setbacks. Not all resistance can be turned into support and not ev- eryone will be happy with the change. Hence, it takes courage to lead change.

3.10. Transcendence

The leader is generally appreciative of excellence, whether in design or implementation, in a variety of areas: the arts, literature, sports, public policy, or business. Striving for excellence in both the sub- stance and process of change means setting sights high and taking the risk that the result may fall somewhat short of the aspiration.

3.11. Judgment

The leader makes sound decisions in a timely man- ner based on relevant information and a critical analysis of facts, appreciates the broader context when reaching decisions, shows flexibility when confronted with new information or situations, and reasons effectively in uncertain or ambiguous situations. Judgment is required in every stage of

Transformational change and leader character 243

the change leadership process, from envisioning the change to celebrating its achievement.

4. Leader character and leading change

More than one of these character dimensions may be involved in each phase of the change process. In the following examples, we have picked out those dimensions that–—in our own experience and pub- lished reports and studies of change–—appear to have been most important at each of the eight stages of Kotter’s change model. Figure 2 summa- rizes the relative importance of each character dimension in the change process.

4.1. Establishing a sense of urgency

Drive is essential to tackle challenges with a sense of urgency. Leaders with drive approach challenges with energy and passion and display a strong desire to succeed. For example, Bill Gates has argued repeatedly that the world needs a better warning and response system for infectious diseases. His calls for such a system intensified after the Ebola epidemic that ravaged the lives of thousands of people in Guinea, Liberia, and Sierra Leone. He firmly believes that a major outbreak of an infec- tious disease, taking the lives of more than 10 mil- lion people per year, has a 50% chance of happening in his lifetime. In a 2015 TED Talk, he demonstrated such forward thinking–—transcendence–—and argued

Figure 2. The relative importance of each character dim

that time is not on our side and that we have to get ready for the next epidemic that lies ahead.

Creating a sense of urgency also requires the leader to be truthful and straightforward and to be transparent even in the most challenging situations–—to demonstrate integrity. For example, in 1992, Arthur Martinez joined Sears as head of the merchandising group. The company had lost billions of dollars the year prior. He made dramatic changes within the first few months in his new position as incremental improvements were going to be insuffi- cient. For example, among his first decisions was to terminate the Sears catalog, which had been in exis- tence for over 100 years. Martinez was quickly nick- named “the man who killed the catalog” and “the Ax from Saks” because of the deep cuts he made in store operations (Martinez, 2001). Few employees truly understood the dire situationthe company was facing in part because of poor communication–—lack of candor–—from the prior leadership. The many misconceptions that employees held were addressed through candor in communications in town halls and other forums that created a sense of reality and urgency for change throughout the company.

4.2. Creating a guiding coalition

Collaboration is an essential ingredient to make the guiding coalition work. Those involved need to be open-minded, flexible, and collegial in their inter- actions. Antoni Cimolino is the artistic director of the Stratford Shakespeare Festival in Stratford, Ontario. One of his main objectives is to define a

ension in the change process

244 G.H. Seijts, J. Gandz

compelling vision for the play he directs. He insists that theatre is a collaborative art form. He tells his colleagues what kind of world he wants to create on the stage. He then invites everybody into the con- versation. In his words (Seijts, 2014, p. 282):

We want to be stars of our own movies. The great gift for me was to realize there are many people here, each carrying a different piece of the jigsaw puzzle to the table and, if you really want to make it work, each person plays a part . . . I then realized that by enlisting peo- ple’s support and getting them to really want to come to the table, we would ultimately have a much better product—a better play.

However, recognizing that you can benefit from other people’s insights is not enough. Many individuals simply will not risk disagreeing with the leader in high-stake situations. The leader needs to create channels for feedback and keep them open. As Nar- ayana Murthy, co-founder of Infosys, said: “The day a leader closes those feedback channels . . . is the day when a leader’s power starts diminishing and he or she starts doing things that are completely wrong” (Seijts, 2014, p. 36). Leaders have to be reflective and respectful as well as demonstrate an interest in continuous learning (i.e., remain humble). Every night when Murthy goes home, he makes a point of helping to clean the bathrooms at his home. Why does he pick up a toilet brush? Taking a lesson from Gandhi, he tries to perform tasks that might be considered beneath his elevated station in life as a reminder that all contributions to the organization and society should be valued.

Leaders also need to demonstrate temperance when the guiding coalition is dealing with the myri- ad of challenges at hand. They remain disciplined and stay on track in defining the shared objective and the ways in which it can be achieved. They control strong emotions like anger or disappoint- ment, especially when obstacles and setbacks are encountered. For example, Germany’s Chancellor Angela Merkel has been in charge of Europe’s big- gest economy since 2000 and sets the political tone on the continent. She led Germany and Europe through a succession of daunting political, financial, economic and, most recently, human crises and throughout the years has been the epitome of calm- ness and self-control.

4.3. Developing a vision

Steve Jobs, co-founder of Apple, was widely seen as one of the greatest visionaries and innovators in our lifetime. Minda Zetlin (2015) wrote that “while everyone else was living in the present, he had

uncanny insight into how market forces and social trends were changing the world around him. That vision made Jobs, and Apple, virtually future- proof.” Jobs explained that vision is often the product of a broad education (Wolf, 1996):

Creativity is just connecting things . . . When you ask creative people how they did some- thing, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people.

This observation speaks to the dimension of tran- scendence and the elements of creativity and ap- preciation for experiences that are outside one’s own area of expertise, as well as the dimension of humility and the element of reflection.

A key requirement of any vision is that it reflects a purpose that inspires employees on a personal level. Daniel Akerson, former CEO of General Mo- tors, led the company through dramatic change after the automotive bailout. Employees were shak- en when the company came out of bankruptcy. Many feared for the long-term viability of the company and hence their jobs. Akerson explained (Seijts, 2014, p. 57):

We lost our way and strove to ‘meet the mar- ket’ . . . That’s a flawed strategy, a poor vision. Employees see that; they are not inspired by ‘average’ and start to disengage. Today’s Gen- eral Motors exhibits greater energy and enthusi- asm because they see the efforts, and initial success, to take our game to greater heights.

Good leaders have figured out that determination is the fuel that makes success happen. It takes tran- scendence, drive, humility, and courage to formu- late, communicate, and execute a bold vision for change. Our own experience suggests that visions proclaimed from on high are less effective than those that are developed with the engagement of those who will be affected by them, thus placing great value on leaders who are willing to collabo- rate in the process of creating and promulgating compelling visions (Gandz, 2009).

4.4. Communicating the vision

Communication is essential in any leadership role and its importance is elevated during organizational change and crises (e.g., Gilley, Gilley, & McMillan,

Transformational change and leader character 245

2009; Kotter, 1996). For example, leaders have to keep employees informed in order to get their views and input in developing specific ideas as to what needs to be done further. Leaders also need to communicate progress and the positive steps taken, both to employees and external stakeholders. Any leader who has difficulty in being truthful and straightforward with others in trying situations is at a disadvantage. Employees and the public expect their leaders to be open and honest in relationships and communications.

In 2010, Steinthor Palsson became the CEO of Landsbankinn in Iceland. He left a senior position with the pharmaceutical company Actavis and signed on to build a bank worthy of respect out of the ashes of Iceland’s oldest full-service financial institution. Among his first priorities was to build trust outside the bank by holding public meetings. He did so despite the anger over what had happened in the community, which posed a real threat to the safety of bank employees. Many citizens had lost their homes, their jobs, and all of their life savings. This led them to vent their frustration at any banker they encountered. Palsson explained that the bank’s new management team had to show the public that it was strong and ready to do what was needed to regain trust. Hiding in the office would not have accomplished this. The media cov- ered the meetings; the end result of the broad consultation was that Palsson and his colleagues gained credit from the public (Watson, 2014).

Furthermore, after numerous meetings with em- ployees of the bank and citizens, Palsson and his management team took out a two-page ad in Ice- land’s newspapers listing 28 promises they were making to their customers and the country. The objective of the ad was to be transparent and to hold the bank accountable for its actions over the coming months. Palsson showed integrity, account- ability, and courage.

4.5. Empowering others for broad-based action

Change is greatly enabled when those who will be affected by it are involved, engaged, and empow- ered to determine both the content and the process of that change (e.g., Seijts & Roberts, 2011). Lead- ers need to have the courage to relinquish power to others while retaining accountability for the out- comes of the change. A fire at the head office of MDPSI, the financial services arm of the Canadian Medical Association with more than $30 billion of physician’s investments under administration, forced an evacuation. Within a couple of days, the people who normally worked in the head office

had either been relocated to other offices in Ottawa, its parent organization’s office building across the street, or–—in the case of more than 400 people–—had been asked to work from their homes, often in less-than-ideal circumstances.

When it became obvious that the organization would not be able to rebuild, renovate, and move back into the head office, the CEO and other members of the executive team decided on a bold move–—to give employees the option of not having offices but, rather, working from home and using a variety of meeting rooms equipped with the very latest in technology for tele- and videoconferenc- ing. Each employee could make this decision as well as decisions about working hours, breaks, vacation schedules, and time off from work. When they worked in teams, either within their function or cross-functionally, the teams themselves had to ratify any proposed working arrangement. Further- more, employees could change the amount of fixed versus flex time provided they could organize their work properly and get the approval of their teams.

The decision to empower employees to make the fixed or flex decision was made following numerous employee interviews, focus groups, and surveys in which employees at all levels–—from first-line work- ers to senior executives–—were engaged and re- quested to give their views about the fixed- versus-flex system as well as indicate their personal preferences.

Based on these inputs, the company pushed ahead with designing a refurbished building with work spaces, lounges, mini-dining areas, advanced telecommunications systems, and shared document management systems. Because employees knew that they would have choices about where, when, and how to work, they threw themselves fully into the task of designing their own workplace of the future. It took just over a year for the new facilities to be built and equipped.

Two years after the fire, employee engagement scores had surpassed the very high levels they were at prior to the event and approximately 40% of the employees had elected a flex arrangement. While productivity was very difficult to measure, the CEO believes it had gone up and felt that it was easier to recruit new people to the organization. Most impor- tantly, the elimination of physical zones based on departments or functions had produced the kind of cross-functional collaboration that was spawning client-focused innovation and creativity.

4.6. Generating short-term wins

Our experience has shown that failure of a change initiative can often be attributed to the lack of early

246 G.H. Seijts, J. Gandz

wins despite significant efforts of those tasked with implementing the change. Employees would like to see unambiguous improvements as a result of the change if they are to remain engaged. The setting of short-term goals and the associated wins are the rallying points that the leader and the guiding coalition should focus on. For example, Meg Whit- man, who served as President and CEO of eBay, strongly believes in metrics: “If it moves, measure it” (Galbraith, 2011). For such measurement to happen, the leader needs to demonstrate the char- acter dimensions of drive, integrity, and account- ability. That is, the leader needs to communicate the goals and progress in an open and honest man- ner as well as take accountability for the execution of the plan and the outcomes.

Of course, the leader also has to demonstrate humility and be prepared to change the game plan if the results prove to be disappointing. Last, the leader has to show temperance. Wins should be celebrated. However, one of the pitfalls of leading change is to declare victory too soon. For example, in an interview, former U.S. president George W. Bush reflected on his speech aboard the USS Abra- ham Lincoln in which he announced an end to major combat operations in Iraq (Mooney, 2008):

They had a sign that said ‘Mission Accom- plished.’ It was a sign aimed at the sailors on the ship, but it conveyed a broader knowledge. To some it said, well, Bush thinks the war in Iraq is over, when I didn’t think that. But nonethe- less, it conveyed the wrong message.

The message that was sent to moms and dads was that their sons and daughters stationed in Iraq would be home soon. This did not prove to be the case for many families as the vast majority of deaths of U.S. military personnel occurred after the speech during the Iraqi insurgency. To many people, it appeared that Bush and his administration had been overconfident about the situation in Iraq. The mes- sage for organizational leaders is that they need to be aggressive in the objectives they set for the transformation yet demonstrate patience because it typically takes years before the new practices are firmly grounded in the organizational culture that is envisioned.

4.7. Consolidating gains and producing more change

Leaders accelerate the change plan to further in- crease momentum because doing so counters any continuing resistance to change by employees. The search for continuous improvement tackles the structure, systems, and people that obstruct the

full implementation of the change initiative. Leaders bring not only drive to consolidating gains and pro- ducing more change, but also transcendence. For example, Ted Rogers was the founder, president, and CEO of Rogers Communications Inc. He engaged in numerous initiatives to improve the company’s reputation for customer service. Rogers held the belief that every day you wake up, you have to improve, because “if we don’t change . . . [and] improve . . . [and] fix things, we’re going to be killed” (Avery, 2009). Leaders must launch multiple projects that help to drive the change deep in the organization.

4.8. Anchoring new approaches in the culture

The new values and the associated behavioral prac- tices must grow deep roots so that the change is sustainable. Change initiatives often fail because leaders underestimate the challenges of changing an organization’s culture to support the change. The culture, therefore, must be aligned with the change that is envisioned.

In 2007, Michael McCain, the CEO of Maple Leaf Foods, a Canadian food processing company, real- ized that the whole of his business needed a funda- mental restructuring if it was to be cost- competitive with U.S. competitors going forward. This meant closing low-volume, technically obso- lete plants; reorganizing distribution networks; closing or selling off business units that could never be turned into profitable and world-class opera- tions; and making many other tough decisions af- fecting employees, customers, shareholders, and other stakeholders.

To lead the change successfully required McCain to draw upon every one of the 11 dimensions of character:

1. Integrity to recognize what needed to be done and to report candidly on the progress to stake- holders through the long transformation peri- od;

2. Transcendence to visualize the end goal;

3. Drive to make it happen despite objections from a major shareholder;

4. Courage to pull the plug on business units that couldn’t be turned around and to invest virtu- ally all of his net worth in the transformation;

5. Humanity to do this while caring about, and taking steps to assist, the many employees who

Transformational change and leader character 247

would be losing their jobs as a result of the transformation;

6. Justice to recognize their claims on the organi- zation for past service and success;

7. Humility to go seek the very best business practices for leading a deep and comprehensive transformation;

8. Temperance to understand and accept that the transformation would take 5—7 years to com- plete;

9. Accountability to the shareholders for the re- sults of a long-term investment;

10. Collaboration with a large and diverse group of people and parties too numerous to list; and

11. Judgment to bring all these dimensions togeth- er into an effective, efficient, and principled change process.

In May 2016, McCain (2016) was finally able to declare that “our transformation, one of the largest in the North American food industry, is delivering the finan- cialgoals that wesetback in 2010.”Arguably,without the breadth and depth of character displayed by McCain and his leadership team, the successful trans- formation would never have happened.

5. Judgment rules

We positioned judgment in the center of our frame- work because it plays a critical role in leader char- acter (Crossan et al., 2017; Crossan et al., 2016). Judgment is the character dimension that channels and melds the other dimensions into contextually informed behaviors. We need leaders with strong judgment that enables them to consciously or un- consciously activate each dimension of character at the right time and in the right amount, as well as to bring forth the right behaviors in the right situation at the right time. For example, leaders should not empower everyone–—there are many things to con- sider. They have to assess whether that power will be used in the furtherance of change or to subvert it; patience cannot be inexhaustible in the pursuit of change and hence sometimes bold action is required; it may not be possible to be fair and equitable to everyone in all changes; sometimes collegiality, open-mindedness, and striving for co- operation will hamper the change effort, especially when time is tight; and so forth. Leaders cannot

simply pick and choose which dimensions they want to embrace and which ones they want to ignore because each of the dimensions is essential to lead change effectively.

Kotter (1996) does not explicitly identify judg- ment but it permeates throughout his model. Suc- cessful transformational change requires real-time judgement. The leadership of the late Robert Ben- mosche is a good example (see Crossan et al. (2016) and Norton (2012)). Benmosche came out of retire- ment in August 2009 to head a company that was on the brink of disaster: American International Group (AIG). AIG, a globally entrenched business, was one of the ‘too-big-to-fail’ companies. Failure, many people thought, would bring the global financial system to its knees. The U.S. government approved a $182 billion bailout for AIG, in return for a 92% stake in the company.

Benmosche agreed to take the job, but only on his own terms. He was a man who had a roll-up-your- sleeves ethos. He was known for his willingness to say what was on his mind. He let it be known that if he encountered any obstacles from government officials, he would quit, and state publicly where the obstacles had arisen. He also made it clear that he was no diplomat. People observed that he “makes more enemies than friends because he does what needs to be done” (Norton, 2012). Yet, Jim Milstein, the former Chief Restructuring Officer of the U.S. Treasury department, opined that “Bob’s emotional intelligence is unrivaled. He is by no means short on analytical strengths, but he’s a very shrewd evaluator of people” (Norton, 2012, p. 15).

Benmosche’s first line of defense was to go on the offense, rallying the demoralized employees to once again take pride in the company. This was a risky tactic because, most likely, Washington ex- pected the new CEO of the humiliated company to be humble. But Benmosche knew that as long as people had their tails between their legs, AIG could not rebound. Thus, having made certain that he had a board chair who could be the resident diplomat–—Harvey Golub–—Benmosche was able to defend his company and his workforce aggressively.

Even as he was rebuilding morale, he was cutting costs dramatically. The payroll shrank from 97,000 to 57,000 employees. At Benmosche’s urging, his managers backed off the credit-default swaps that had caused the trainwreck and, drawing on the company’s enormous database and analytical skills, began designing new products that were profitable and sustainable. At the same time, AIG was under enormous pressure to liquidate holdings, the big- gest and most valuable of which was the Asia Life business. Golub was an advocate of hurrying divest- itures. Benmosche disagreed with this strategy. He

248 G.H. Seijts, J. Gandz

decided that an auction environment would reduce the liquidation values, and that the company had to demonstrate that it was in control and in no hurry. This visible point of conflict was a clear line in the sand: someone had to go. Golub resigned just a year into his chairmanship. Benmosche was firmly in control. The bottom line? By 2012, AIG had not only repaid the entire $182 billion in bailout money, but had also given the U.S. taxpayers a $22 billion profit on their loan to AIG. Benmosche stepped down in September 2014, and succumbed to cancer 4 months later.

Benmosche clearly had drive, humanity, integri- ty, justice, accountability, courage, and transcen- dence. For example, his candor was unparalleled even if, at times, he was exceptionally blunt. He fought for the employees and showed understand- ing and compassion for their struggles–—humanity. And in the realm of judgment, he showed incredible situational awareness and insight. He had strong powers of analysis, and was comfortable with com- plex cognitive issues. He was decisive yet showed temperance–—he made sound decisions in a timely manner. He had to show confidence yet remained humble throughout the transformation. In sum, Benmosche exercised effective judgment near the very heart of the catastrophe that threatened the global financial system.

6. Measuring and promoting leader character

How do leaders ensure not only that a specific change project is implemented but that the residual impact on the organization is a culture in which further changes are expected and widely wel- comed? In this respect, the character of change leaders is critical. Where leaders are perceived as having integrity, humility, humanity, temperance, justice, and collaboration, the chances are that those who might resist change will be encouraged to support the current change and will feel good about the change process in ways that will open themselves up to further change initiatives. If, on the other hand, leaders appear to be deceptive, unfair, inequitable, arrogant, disrespectful, and lacking in empathy or compassion to those for whom change is painful, they will raise the bar of hostility toward future change even if the current one is successful. In an era in which change is the new normal, it is the character of leaders that will create a supportive change culture that will con- tribute to organizational success and sustainability.

Beyond that, however, we think there is a gath- ering body of evidence to suggest that leader char-

acter is something that can be assessed and evaluated in current and potential leaders and hence should be taken into account in decisions about how organizations develop and deploy lead- ership talent. For example, the senior leaders in an organization play a critical role in promoting the development of leader character in next generation leaders. They should actively model those charac- ter dimensions and elements they want to see more of throughout the organization. Any character- associated behaviors enacted by the senior leaders tend to be perceived by others as the behaviors that are valued in the organization. This may, in particular, be applicable to those individuals early in their careers (Seijts, 2014). Bandura’s (1997) social cognitive theory explains that behavior is learned from the environment through the process- es of observation and imitation. For example, George Cope, president and CEO of Bell Canada Enterprises stated (Seijts, 2014, p. 351):

I was 25 years old then and overnight became president of a subsidiary of Bell. I learned how boards operate and closely watched the behav- ior of people in leadership roles. I gained valu- able insights into the business world and leadership concepts at a really young age. This was an important learning experience.

Senior leaders can also coach and mentor individu- als on the leader character dimensions and ele- ments. For example, they ought to coach individuals when they encounter teachable mo- ments or crucible experiences so that the lessons embedded in these experiences are not lost on individuals. A character dimension that is challeng- ing for many leaders is temperance. Individuals have to be able to demonstrate self-control, pa- tience, and restraint. They need to learn that every decision has a clock on it–—5 seconds or 1 day or 6 months. Senior leaders can teach individuals that at times, it is more effective to pull people into a conversation rather than to push the change on them. Such coaching and mentoring requires signif- icant dedication–—for example, time and financial resources to send individuals to leadership devel- opment–—on the part of senior leaders.

Furthermore, senior leaders can assign individu- als challenges that require them to display one or more leader character dimensions to successfully complete the assignment. For example, putting individuals in charge of leading the implementation of an organization-wide information technology sys- tem or leading a departmental turnaround provides significant opportunities for them to develop the requisite competencies and character-related be- haviors. The development of character dimensions

Transformational change and leader character 249

such as drive, collaboration, humanity, temper- ance, courage, and accountability may be crucial to the effectiveness of the leader and the success of the change initiative.

Most importantly, senior leaders can make ex- plicit in the role-requirements for leadership posi- tions the character dimensions they want leaders to demonstrate (e.g., through the development of leadership profiles) and actually hire and promote individuals who demonstrate the leader character dimensions and elements associated with leading deep and comprehensive change (e.g., Seijts, Crossan, & Carleton, 2017). Part of this process is to discuss with the candidates the character- associated behaviors leaders expect to see in the role. This requires senior leaders to elevate char- acter in importance alongside competencies. In our experience, it is relatively rare for senior leaders to discuss character dimensions and supporting elements they expect to see in the successful can- didate as well as to focus on character deficiencies when reviewing on-the-job performance. There are many potential explanations for the absence of such character-related conversations in the workplace. Leaders may feel they lack the vocabu- lary to have constructive discussions. The research we conducted offers a specific vocabulary that allows leaders to have developmental leadership conversations in the workplace and to infuse leader character into HR systems and processes to enable excellence in the workplace.

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Character matters: Character dimensions’ impact on leader performance and outcomes

Gerard Seijts *, Jeffrey Gandz, Mary Crossan, Mark Reno

Ivey Business School, Western University, 1255 Western Road London, Ontario, Canada, N6G 0N1

Organizational Dynamics (2015) 44, 65—74

Available online at www.sciencedirect.com

ScienceDirect

jo u rn al h om ep ag e: ww w.els evier .c o m/lo c ate /o rg d yn

INTRODUCTION

In a recent commencement address at the Ivey Business School, Domenic Barton, the head of McKinsey & Co.’s global consulting practice, said: ‘‘When we think about leadership we focus too much on what leaders do . . . and we don’t spend enough time on who leaders are — the character of leaders.’’ Similarly, in a speech to Ivey students, Mark Carney, Governor of the Bank of England, said that ‘‘. . . to restore trust in banks and in the broader financial system, global financial institu- tions need to rediscover their values . . . Employees need a sense of broader purpose, grounded in strong connections to their clients and their communities.’’ Few among the hun- dreds of C-suite leaders and board directors with whom we have discussed this topic in focus groups sessions, confer- ences, and executive development programs over the last five years, would disagree with them.

While leaders readily agree that ‘‘character matters,’’ they also report that they seldom refer to it, talk about it, or use it in recruiting, selecting, promoting or developing lea- ders . . . although it does surface more often when it comes to firing them! Based on our research, we attribute the gap between the perceived importance and the actual use of character to three things. First, there is a great deal of ambiguity about what is meant by the word character, which of its dimensions are most important in organizational lea- dership, how character can be assessed, and what can be done to develop character in today’s and tomorrow’s lea- ders. Second, leaders tell us that what they need is a

* Corresponding author. Tel.: +1 519 661 3968. E-mail address: [email protected] (G. Seijts).

http://dx.doi.org/10.1016/j.orgdyn.2014.11.008 0090-2616/# 2014 Elsevier Inc. All rights reserved.

contemporary, practice-focused vocabulary with which to address character. This vocabulary must be expressed in the language used today in their organizations. Third, there are few reliable and valid tools available for the systematic assessment of character. Practitioners tell us they need these tools if they are to move from thinking and talking about character development to actually doing something about it.

In this article, we propose an operational definition of character, outline a set of plain-language dimensions of character that we believe to be relevant to organizational leadership, present results from a survey relating these dimensions to leader performance and outcomes, and describe the practical implications for leader character development in organizations.

LEADERSHIP AND THE FINANCIAL CRISIS

Following the 2008—2009 financial crisis and the subsequent economic recession, we engaged more than 300 senior busi- ness, public sector and not-for-profit leaders from Canada, the United Kingdom, the United States, and Hong Kong in structured discussions on the role that organizational leader- ship played before, during and after the crisis. We posed a straightforward question: Would better leadership have made a difference? The answer we received was a resounding ‘‘Yes.’’

We learned that three dimensions of leadership distin- guished those companies that failed or were severely damaged by the crisis from those that survived and pros- pered: leadership competencies in such areas as risk manage- ment and management controls; leadership character, in particular the courage to speak up when people knew about poor lending and securitization practices, gross

66 G. Seijts et al.

over-confidence and arrogance that led to reckless risk-tak- ing behavior, an indifference to the social consequences of their actions, and lack of accountability for the risks that were being taken and the eventual outcomes; and leadership commitment in the form of deep engagement in understand- ing how risk was taken and modeled, how decisions were really being made deep down in the organization and who was making them (see Figure 1).

We concluded that competencies reflect what a person can do; commitment refers to the effort someone will put into doing it; character influences the choices people make about what to do, as well as whether they will acquire the requisite competencies and make the commitment to do so in any given situation. We suggest that if any of these three pillars are deficient, the shortfall will undermine the other pillars and, ultimately, lead to performance problems for leaders, organizations and related stakeholders. Just ask the shareholders of Lehman Brothers. The organization had a surplus of competencies and commitment among its leaders; but shortcomings of character still set the organization up for failure.

We also concluded that leadership character had received little attention in business schools or corporate leadership development programs even though it had been the most widely, and heatedly, discussed aspect of leadership by executives in our research. Competencies have been well addressed in both the academic and practitioner literature and commitment seems somewhat clear and obvious; but character, it turns out, is less understood and harder to define. For example, one participant in our roundtable dis- cussion on leadership and the financial crisis observed that, ‘‘Doctors, lawyers and accountants know about the standards of acceptable behavior that they need to live up to. I am not sure that business schools create that same standard among their graduates. I think that leads to a lot of problems with integrity and character.’’

A more recent set of presentations and structured dis- cussions with groups of directors of both private and public sector organizations across Canada (over 200 in total) sug- gests that they, too, would like to develop a better under- standing of character, be able to talk more cogently and transparently about it and actually assess character in the directors and executives they recruit. They realize char- acter is important but lack the vocabulary to bring character into conversations. Their request to us was to provide them with language and tools to discuss character with others in

Figure 1 The ef

the context of real-world executive and governance deci- sions they make on a daily basis. To this end our team has taken on the challenge of explicating the concept of leader character, defining those dimensions of character that are relevant in the business world and assessing perceptions regarding character and its effect on individual and orga- nizational performance through both structured conversa- tions and surveys.

THE MEANING AND IMPORTANCE OF CHARACTER

The Greek philosopher Heraclitus stated that, ‘‘A man’s character is his fate.’’ Character is foundational to effective decision making and functioning. It shapes: what we notice in the context in which we operate; how we engage the world around us; what we reinforce through rewards and punish- ments; who we engage in conversation and how we conduct those conversations; what we value; how we interpret feed- back; what we choose to act on; how we deal with conflict, disappointment and setbacks; the goals we set for ourselves; how we communicate; and so on. For example, aspiring leaders must commit to stretch assignments to develop their competencies, take in and act on constructive feedback, learn to take ownership for personal mistakes made, develop a cross-enterprise view of the business, and be willing to collaborate well with others on enterprise- or industry-wide projects. These behaviors and activities are rooted in char- acter. Likewise, within a board, directors require open, robust and critical yet respectful discussion with other direc- tors who bring a willingness to collaborate and have the courage to dissent. Senior leaders need to establish cultures of constructive dissent if they are to avoid phenomena such as groupthink. Establishing and maintaining such cultures hinges on certain character dimensions in both leaders and followers — such as courage, accountability, integrity, and humility. We have been focusing on character in executive development and next-generation leadership programs with companies in North America, Asia and Europe for the last five years and many, such as Allstream, OMERS, Newalta, and Hutchison Port Holdings, have built the explicit recognition of the importance of character into their own succession man- agement processes.

Character is a ‘‘loaded’’ word, and it has different meanings to different people. Executives, directors and

fective leader.

Character matters: Character dimensions’ impact on leader performance and outcomes 67

entrepreneurs in our focus groups and executive develop- ment programs had little difficulty talking about how they thought character had played a role in the lead-up to the financial crisis. But they did not always agree on what they meant by character. For example, Gail Cook-Bennett, former board member of organizations including Manulife Financial Corporation and Bank of Canada, articulated that the absence of agreed-upon definitions, tools to assess a person’s character, and the lack of conversations regarding character in the workplace, are the result of a limited vocabulary around the construct or some lack of understanding of the construct itself and its significance for leader effectiveness.

We define character as an amalgam of virtues, personality traits and values. Virtues, such as courage or temperance, refer to patterns of situationally appropriate behaviors that are generally, indeed near-universally considered to be emblematic of good leadership. Some of these virtues are personality traits, such as open-mindedness or conscientious- ness, which are relatively stable dispositional variables. They may be either inherited or acquired; and they predispose people to behave in certain ways, if not over- ridden by contextual variables such as reward systems and

Figure 2 Character dimension

organizational culture. And some of the virtues operate as values, such as honesty and transparency, which act as deep- seated beliefs people hold about what is morally right or wrong or, alternatively, what makes the most sense to do, or not to do, in choosing a course of action.

In our research we discussed with executives and directors what character looks like and how it plays out in business decisions. We also consulted relevant literatures from dif- ferent fields — business, psychology, philosophy, sociology, anthropology, and education — as well as examined existing tools that purport to measure values and character. We also involved practitioners and students, most of whom have more than ten years of leadership experience, from execu- tive M.B.A. programs in our empirical work on leadership character. Based on these activities we posit leadership character in the business world as consisting of 11 dimensions as shown in Figure 2.

We also include in our framework character elements — virtues, traits, or values — that are illustrative or descriptive (although not necessarily exhaustive) of each of these char- acter dimensions. Our wording of the dimensions and elements is heavily influenced by the language used by

s and associated elements.

68 G. Seijts et al.

executives in our initial research and by subsequent work with directors. It reflects a conscious decision to adopt language that is in common use in organizations rather than that used in the philosophical, psychological, or other aca- demic literatures. However, we retained some terms that were not easily captured in modern-day language to ensure that the framework reflects management practice while leading it.

There are a number of key points to appreciate about the dimensions that make up character and how they relate to one another. First, each dimension is composed of several defining character elements. Each of these elements has an impact on the strength of the character dimension, although their impacts may not be equal. Second, all dimensions and elements of character matter, and it is important to under- stand both one’s strengths and one’s developmental areas. Finally, strength of character requires that each dimension be accessed as and when the situation calls for it.

The dimensions work separately and together to influ- ence action. For example, individuals who have courage in excess may act recklessly unless they have access to the character dimensions of temperance and judgment. The effect of irresponsible and reckless behavior was on full display in Iceland where bankers from Glitnir, Landsbanki, and Kaupthing ruined financial institutions and caused a near-bankruptcy of the country by building up irresponsible leverage prior to the 2008—2009 financial meltdown. Simi- larly, courage is essential for integrity because being prin- cipled and candid require it. Michael McCain, president and CEO of Maple Leaf Foods, was lauded by many for his handling of the listeriosis crisis that involved the illness and death of people who had consumed sliced meats; his actions embodied courage, accountability, justice and humanity. Leadership effectiveness will be compromised if individuals ignore the development of any of the dimen- sions shown in Figure 2.

While certain personality traits are innate, character is developed over one’s lifetime, and individuals can enhance the development of character through deliberate practice and reflection on experience. Every situation presents a different experience and opportunity to exercise, apply and develop character. The well-developed, mature charac- ter is one in which all of these dimensions are present, accessible and manifested in situationally appropriate beha- viors.

DESCRIPTION OF CHARACTER DIMENSIONS

Leadership is based upon good character. Leader character involves the following dimensions:

Drive is essential in leaders so that they will establish stretch goals and the plans to achieve them. Leaders with drive demonstrate a passion to achieve results, the vigor to motivate others, a natural curiosity that must be satisfied, and they demonstrate initiative and a desire to excel. We believe that this drive comes from within for good leaders. Good leaders drive for results because they are intrinsi- cally rewarding; they are not driven by external forces such as incentive plans or the will of others. In its extreme, drive may be shown in hyper-competitiveness, over- confidence, and arrogance — characteristics that can

impede collaboration, lead to destructive excesses and eventual under-performance.

Accountability includes a sense of ownership, being con- scientious in the discharge of leadership mandates, and accepting of the consequences of one’s actions. However, taking the whole world on one’s shoulders is an excess that can result in burn-out or paralyze people from taking action. On the other hand, ducking legitimate responsibility results in negligent and reckless conduct that will lose leaders the respect of their peers, those whom they report to, and those who work for them.

Collaboration is essential for leaders to form effective teams, to cooperate with others, and to work collegially. They have to be open-minded and flexible so that they can work with those in their own organizations as well as in external groups. However, collaboration for its own sake may result in endless deferral of decisions until consensus is reached, while lone-wolf decision-making squanders the opportunities to benefit from a diversity of views, better-quality ideas, and smoother implementation of decisions.

Humanity, which we describe as consideration for others, empathy, compassion, magnanimity, and the capacity for forgiveness, is essential to developing followership. Without it, a person can be an effective boss, but never a good leader. We do not view humanity as a soft or weak dimension of leadership character but, rather, as a fundamental strength that is often at the core of fostering quality and candid conversations. However, we recognize that being tender hearted may induce paralysis in decision making, especially in situations in which some people may be disadvantaged, such as discipline or downsizing. We also recognize that being cold-hearted, callous, or indifferent destroys human rela- tionships, and usually results in leaders being rejected by their followers.

Humility has long been regarded as an essential quality for leaders; without humility, it is impossible to learn from one’s mistakes or those of others. This dimension embraces a degree of self-awareness, the capacity for reflection, and a sense of gratitude toward those who have helped one learn or achieve success. However, as with the other dimensions, it is important to guard against excessive humility, such as might lead to self-abnegation. This is actually a failure to recognize personal strengths, and it can undermine the self- confidence that leaders must have.

Temperance allows leaders to be calm when others around them panic, to think things through, and act in the best long- term interests of the organization. It helps them avoid over- reacting to short-term success or failure, and to assess both the risks and the rewards of alternative courses of action. However, leaders must guard against temperance that is so strong that it contributes to undesirable temerity. For exam- ple, boards actually want leaders to take risks, provided that the leaders understand these risks and know how to manage them.

Justice is a dimension that is central to followers’ deci- sions to accept an individual’s leadership. This dimension incorporates fairness and even-handedness in both proce- dures and outcomes, such as the allocation of work and dispensation of rewards. It includes a sense of proportionality with respect to praise or censure and — in a broader sense — recognition of the requirement of a leader to contribute to

Character matters: Character dimensions’ impact on leader performance and outcomes 69

the growth and development of the societies within which they operate. Leaders who act unjustly soon find themselves violating societal expectations, which may lead to over- regulation and excessive controls that will likely undermine long-term performance.

Courage is a requisite character dimension for leaders. It includes preparedness to take risks, to challenge the status quo, to test uncharted waters, to speak out against perceived wrongdoing, and to be prepared to admit to concepts such as ‘‘I don’t know’’ or ‘‘I screwed up.’’ Sometimes it requires courage to adopt a lower-risk strat- egy and forgoing the immediate returns of a higher-risk route. It may include a degree of resilience as leaders fail in their first efforts to accomplish something. The absence of courage results in compliance with authority, a moral muteness that allows wrongdoing to go unchallenged and unreported, and average or even mediocre returns. An excess of courage, one that is not tempered by other character dimensions, may lead to foolhardiness and excessive risk-taking.

Transcendence is the dimension that allows leaders to see the big picture and take the long view. It is focused on future possibilities and means doing what is right for their organiza- tions in the long-run rather than pursuing the expedient or momentarily satisfying route, climbing above petty rivalries or personal feelings. It often requires creativity. Transcen- dent leaders are optimistic: they focus on the future and inspire others to do the same. Transcendence is not a detached other-worldliness, which may detract from focus on the here and now. Nor is it the pursuit of perfection to the point where the organization fails to achieve acceptable results in the shorter term.

Integrity is essentially about wholeness, completeness, and soundness of leadership character. It is most readily apparent in principles such as honesty, authenticity, trans- parency, candor, and consistency, but it is also used to describe high moral standards. It is knowing who you truly are and being true to yourself. It is both saying what you think and doing what you say. Arguably one can never have enough integrity and, indeed, people often describe integ- rity as a ‘‘binary’’ variable. However, there are times when people with high integrity display rigidity of thinking and even dogmatism and self-righteousness that make them less effective as leaders. Making decisions in complex and ambiguous circumstances often requires the reconci- liation of opposing principles and the exercise of a degree of pragmatism.

Judgment has a central place in an individual’s character. Each of the other dimensions of character represents reser- voirs of varying depth — people may have lots of courage or a little, or great integrity or not so much. How an individual’s character influences their actual behavior in a particular context depends on their judgment. Judgment serves to moderate and mediate the way that the other dimensions determine individuals’ behaviors in different situations. Tom Long, managing director at executive search firm Rus- sell Reynolds, suggested that judgment acts like an air traffic controller, determining when courage should be shown and when it is better suppressed; when to be tem- perate and when to be bold; and so on. The key is that leaders need a deep reservoir of all dimensions of character to draw on as needed.

THE PERCEIVED IMPORTANCE OF CHARACTER DIMENSIONS

The next step in our research program was to explore how leaders view the importance of the 11 character dimensions in both absolute and relative terms, the impact they perceive the dimensions have on leader performance and leader out- comes, and how these perceptions may be influenced by gender and organizational status.

We distributed an e-mail survey to 700 employees in leadership positions in a large, multidivisional conglomer- ate with operations mainly in Canada and the United States. The company operates in highly competitive industries, and has a reputation for having a high-performance culture in which leaders must succeed. The company would be con- sidered a leader in management development and training. For example, it runs, among other initiatives, an in-com- pany Executive M.B.A. program as well as many shorter development experiences. It has a very sophisticated suite of HR programs and a strong values statement that the senior leadership team often refers to in speeches, educa- tional sessions and other corporate and individual commu- nications.

Over 500 employees responded to parts of the survey; and 364 of them completed the entire survey. 320 males and 66 females provided answers. Most respondents were between 35 and 54 years old. Primary job functions covered a wide array of functional disciplines including accounting, operations and training. Twenty-two respondents were executive leaders (e.g., vice-president, senior vice-presi- dent, or executive vice-president), 131 respondents were first-level leaders (e.g., supervisors and managers), and 227 respondents were leaders of leaders (e.g., senior man- agers and directors).

The survey contained two questions regarding the impact of the character dimensions on (1) leader performance and (2) leader outcomes. The first question was: ‘‘To what extent do you think each of these character dimensions impacts the following aspects of leader performance at your organiza- tion?’’ We listed five aspects of leader performance based on our understanding of frequently used leadership effective- ness criteria: getting employee engagement; being an effec- tive team member; building high performance teams; developing leadership in others; and developing further as leaders themselves. The second question was: ‘‘To what extent do you think each of these character dimensions impacts the following leader outcomes at your organiza- tion?’’ We again listed five commonly accepted outcomes for leaders: achieving superior results; making better deci- sions; being perceived by others as a good leader; being given opportunities to lead; and being successful in one’s leader- ship career. Scale scores on all dimensions ranged from �3 (very detrimental) to +3 (very beneficial).

Wherever we presented a character dimension (e.g., Transcendence or Temperance) we also presented its com- ponent elements, which served to provide some definition of the dimension by describing the kinds of adjectives that would be applied to behaviors that were representative of the dimension (e.g., future-oriented, purposive, optimistic, or creative for Transcendence; and patient, prudent, or self- controlled for Temperance).

70 G. Seijts et al.

OUR FINDINGS

The respondents used both the ‘‘detrimental’’ (�3, �2, �1) and ‘‘beneficial’’ (+1, +2, +3) parts of the scales. For exam- ple, while most respondents viewed Humility as beneficial to all leader performance and outcome components, as many as 21 percent of respondents viewed it as detrimental to being given opportunities to lead. Indeed every one of the other character dimensions were seen as detrimental by some respondents with respect to some aspects of leadership performance or outcomes.1

Respondents differentiated among the character dimen- sions on most of the questions; the mean scores ranged from 0.78 to 2.58. Based on the means alone, leaders see all 11character dimensions as beneficial to leader performance and outcomes. However, some dimensions are seen as having more impact on some performance and outcome measures than others.

Across the five measures of leader performance, Drive, Accountability and Integrity stood out as highest. The aver- age rating for these dimensions was 2.34 (between moder- ately and very beneficial). The character dimension of Transcendence scored lowest across all performance mea- sures. The average rating of this dimension was 1.50 (between somewhat and moderately beneficial). Respon- dents saw Integrity as especially beneficial for getting employee engagement; Collaboration and Accountability as beneficial for being an effective team member; Integrity and Accountability for developing leadership in others; Drive, Collaboration and Integrity for building high performance teams; and Drive and Accountability to develop further as a leader.

Across all five measures of leader outcomes, Drive, Integ- rity, Accountability and Judgment stood out as the most beneficial. The average rating for these dimensions was 2.27, with 3.0 being ‘‘Very Beneficial.’’ The following four character dimensions scored consistently low: Transcen- dence, Temperance, Humanity, and Humility. The average rating for these dimensions was 1.29, with a significant number of respondents actually considering them to be detrimental. Respondents see Drive as especially beneficial for achieving superior results, getting opportunities to lead, and being successful in one’s leadership career; Judgment as beneficial for making better decisions; and Drive, Integrity, Accountability and Judgment as beneficial for being per- ceived by others as a good leader. Interestingly, the only two scores below 1.0 were for Humility and Humanity and their impact on being given opportunities to lead; they also had weak perceived relationships with achieving superior results.

While caution should be taken in interpreting the results given the imbalance of the number of males and females in the sample, the results show that women tend to consider Humanity, Humility, and Transcendence as more beneficial than men. The scores on the other dimensions are very similar.

Caution is also warranted with respect to interpreting the results across the three levels of leadership (first level

1 The full set of results can be obtained from the first author.

leaders, leaders of leaders, executive leaders), given the relatively low number of executive leaders in the sample and the uneven distribution of respondents across the levels of leadership. Some interesting patterns emerged. First, there was a fairly consistent pattern across the three levels of leadership, in that Accountability, Integrity and Drive consistently received the highest ratings. Second, the results showed that respondents view Humility, Humanity, Justice, and Temperance as less beneficial for the leader performance and outcome measures with the increase in leadership level. Third, Transcendence, although low over- all, was seen as more beneficial by executive leaders rela- tive to leaders of leaders. Executive leaders also scored Courage higher vis-à-vis leaders of leaders. Fourth, the aggregated impact rating for Collaboration and Drive were lower among executive leaders than among first level lea- ders and leader of leaders.

INTERPRETATION OF OUR FINDINGS

Our data revealed that all of the 11 character dimensions were considered to be positive contributors to both leader- ship performance, such as being an effective team member, and leadership outcomes, such as building a successful lea- dership career. Individuals used the full range of scale scores, with some dimensions, such as Humility and Humanity, get- ting a sizeable number of ‘‘detrimental’’ responses. For example, 14 percent of respondents thought that Humility was very, moderately, or somewhat detrimental to being successful in one’s leadership career; 12 percent of respon- dents considered Humanity to be detrimental; and 11 percent of the respondents thought the same about Temperance. Drive was generally considered to be highly beneficial for most aspects of leadership performance and outcomes; how- ever, 8 percent of respondents perceived it as being detri- mental to ‘‘making better decisions.’’ In short, there was considerable variance in the ways in which people viewed these character dimensions as detrimental or beneficial for individually- and organizationally-relevant variables.

In general, Humility, Humanity, Temperance, and Trans- cendence were not rated as highly as the other character dimensions in terms of their beneficial contribution to lea- dership performance and outcomes. The question is — Why not? Could it be that these dimensions are just terms that people: (a) do not understand, (b) do not normally equate with good leadership, or (c) do understand the terms and still think that they do not matter that much because the orga- nization does not reward them?

At least one possibility is that people responded more positively to the words with which they were familiar in discussions about organizational leadership, training pro- grams, performance assessments, and so on in this organiza- tion or others with which they are personally familiar. Dimensions such as Accountability, Collaboration, and Drive are often found on the walls of most companies in mission and vision statements. These dimensions are embedded in selec- tion, performance assessments, talent reviews, job postings, and so forth. And, arguably, these character dimensions are manifested in the behaviors of many leaders, including the senior leaders of the organization that took part in our survey. Thus the individuals involved in our data collection may be

Character matters: Character dimensions’ impact on leader performance and outcomes 71

feeding back what is being espoused or enacted in their workplace and are forming their judgments about what leads to performance and outcomes based on their observations. Being less familiar with labels such as Justice, Temperance, Humanity, and Transcendence, and not seeing them used or expressed in their own work contexts, individuals may rate their impact on leadership performance and outcomes as lower. We will need to conduct comparative studies in dif- ferent organizations to investigate these findings further. However, anecdotal evidence from our executive programs supports the view that leaders value what organizations measure. We also intend to conduct longitudinal studies to investigate whether differing character profiles, obtained through both self- and 360-degree character assessments, actually result in greater leadership success as measured by independent performance evaluations or promotions.

IMPLICATIONS FOR CHARACTER DEVELOPMENT

Although respondents in our survey reported differing levels of appreciation for each of the 11 character dimensions in achieving leadership performance and outcomes, prior research examining the dimensions independently reveal that all 11 are important. We argue that the well-developed, mature character encompasses each of these dimensions. In other words, individuals must be able to activate each of the 11 character dimensions. For example, Drive without Integ- rity may lead to self-serving goals and subsequent mistrust between individuals on the senior leadership team. Without Justice, Collaboration may derail, as emerging inequities erode trust and a lack of trust typically leads to an unpro- ductive if not hostile environment. Without Humility, deci- sion making may become autocratic and arrogant, Collaboration becomes difficult, and leaders no longer learn. Both empirical research and our own observations in decades of executive education have shown that mid-level and senior leaders in the public, private and not-for-profit sectors derail because of deficiencies in character dimensions.

Character is developed over one’s lifetime, and indivi- duals can enhance the development of character through goal setting, deliberate practice and reflection. As we have stated before, every situation that we encounter in our personal or professional lives offers opportunities to exer- cise, apply and develop character. Developing good leader- ship is a lifelong journey. For example, at our institution we have designed new courses for our undergraduate and graduate students around leader character development; developed new cases and other teaching materials around the importance of leader character in private, public and not-for-profit organizations; and co-created activities with firefighters and members of the Canadian armed forces to stress-test students and to help them learn about leader character. We have extended this focus into executive and leadership development programs in both private and pub- lic sector organizations, and the focus on leader character is invariably the most highly evaluated component of such programs.

Business schools need to legitimize discussions around leader character. These discussions need to include col- leagues from business disciplines other than leadership

or organizational behavior and who recognize that char- acter matters and want to incorporate character aware- ness and development into their own courses and research activities.

For individuals in leadership roles, or aspiring to them, it is important to set aside the time to fully understand both one’s strengths and developmental areas to grow as a leader, and this requires a degree of reflective thought and feedback from others. Self-awareness is critical to leadership and character development and, as Warren Bennis said so well: ‘‘You are your own raw material.’’ For example, reflection about why you might be impatient, inconsiderate, self-inter- ested or careless provides the necessary insight for examining and further developing character. But how often do leaders set aside the time to truly reflect on their functioning? For example, Arkadi Kuhlmann, the current CEO of ZenBanx, conducts post-mortems on organizational events like a die- hard hockey fan analyzing the performance of his or her favourite team. He said: ‘‘People will argue for hours about why a goal was scored, or not scored, and how an individual played, and so on. In business, and even in family situations, we just won’t do those kinds of post-mortems.’’ Tools are now being developed that aid and assist the process of character self-awareness, but senior leaders must embrace it as a valuable and valued activity, and this is done best when they do it by example.

IMPLICATIONS FOR PRACTICE

We end this paper with three implications for practice. We believe leader character in all its dimensions is important to individual and organizational success; and we know that many leaders in the public, private and not-for-profit sectors share our view once they develop a deeper understanding of the full dimensions of character. For example, executives from organizations such as Royal Bank of Canada, TD Bank Group, Aecon, General Dynamics Land Systems — Canada, Allstream, OMERS, Parker Hannifin Corporation, and the Ontario and Hong Kong governments, have weaved leader character into their conversations and developmental prac- tices. Unfortunately, in too many situations, we are seeing that character is not being recognized in organizations as critical to success or that there is a rather limited sense of which dimensions of character are considered to be impor- tant. What can or should CEOs and senior leadership teams, as well as those charged with identifying and developing leadership talent in organizations, actually do to elevate the importance of leader character?

First, senior leaders should never assume that leaders, managers, and employees in their organizations understand the meaning of character and its importance to individual and organizational success. They may be familiar with some dimensions such as Drive, Accountability, and Integrity, but may have given little thought to others or, if they have thought of them, may think that they will not figure signifi- cantly in their own development and success. They should never miss opportunities to bring character to the forefront. Their unequivocal support is required for the successful implementation of character alongside competencies and commitment in leadership profiles. For example, OMERS has strength of character and several of its dimensions in

72 G. Seijts et al.

its leadership profile — alongside competencies — to guide decision-making and action.

Similarly, in promotion decisions, leaders must be explicit in explaining how character or character dimensions con- tributed to people’s promotion to senior leadership roles and, more discretely, be prepared to discuss character failings when they are manifested. Where those who are being promoted have demonstrated positive character dimensions, then emphasize and celebrate them as well as their compe- tencies and commitment to the leadership role. For example, General Dynamics Land Systems — Canada is in the process of assessing their high-potentials on the character dimensions we identified using the Leadership Character Insight Assess- ment (LCIA). The initiative is driven by the senior leadership team. But before they committed to the assessment they wanted to go through the LCIA themselves and learn about their own character strengths and deficiencies. The team understands that they serve as role models and as such need to have a deep understanding of the meaning of the dimen- sions of character and how they themselves measure up. They understand that as leaders ‘‘you are always on.’’ People learn by observing what is considered important and valued in the organization, and this includes character dimensions. And the senior leadership team felt it needed to develop their vocabulary to engage the high-potentials in thoughtful and developmental conversations as part of the coaching and mentoring processes.

Second, the importance of character must be reflected and indeed embedded in organizational systems and pro- cesses, including but not limited to recruitment and selec- tion, performance management, developmental processes, promotion criteria, compensation, disciplinary and termina- tion practices, and so forth. This too requires ownership by both senior leaders and also executives in the HR and leader- ship development area.

We have to take on the mythology that the only thing that matters is short-term results and instead promote the value of getting the right results in the right way. The task of a senior leadership team is to build sustainable operations, and sustainability requires the integration of business objectives with social priorities. As Warren Buffet has pointed out, he has only been successful because the society in which he operates encourages, enables and allows him to be so. When an organization emphasizes narrow outcomes such as share- holder value, then we should not be surprised to get narrow leaders — those with a restricted range of character dimen- sions whose perspective may be that only results matter

rather than a synthesis of results and the way they were achieved. We strongly encourage companies to go beyond the creation of competencies-based assessments and to develop leadership profiles that include competencies, character and commitment. When these are done well the profiles serve as beacons — they signal what it takes to be successful as a leader in the organization, and individuals understand that they will be measured against the competencies, character, and commitment embedded in the profile.

Third, leaders, managers and employees must be able to observe role models of character to whom they can relate. Hence senior leaders must recognize behaviors that exem- plify good character and affirm verbally those who exhibit the less appreciated dimensions of character that never- theless contribute to success. Stated values mean nothing unless they are reflected in actual behaviors of people in the organization; and if they do not, corrective action is warranted. Exemplary behaviors across all levels in the organization should be celebrated. For example, WestJet Airlines Ltd. has made a name for itself through a custo- mer-centered and caring focus. Those in leadership posi- tions, as well as peers, would no doubt correct a WestJetter if he or she does not demonstrate empathy and consideration in dealing with a distraught passenger — the caring culture is that strong! We also expect WestJet- ters to be patient, calm, and composed when faced with challenging situations, such as passengers who are visibly upset that their flight got cancelled. And the Kudos pro- gram that is in place at WestJet recognizes selected West- Jetters for their extra-ordinary actions to provide a great guest experience to its guests. In sum, leaders must observe behavior and engage in conversations to direct or redirect behavior that is inconsistent with the stated values or leadership profile.

More than ever we need individuals who demonstrate a disposition to lead regardless of the position they hold. Competence alone is not enough. Individuals need to develop strength of character to fully engage their competencies and activate their leadership to reach their full potential. Orga- nizations can foster or erode leader character, and a key leadership challenge is to elevate character alongside com- petencies in order to realize the promise of leadership.

Character matters: Character dimensions’ impact on leader performance and outcomes 73

SELECTED BIBLIOGRAPHY

The results of our conversations with over 300 senior busi- ness, public sector and not-for- profit leaders regarding leadership and the 2008 financial crisis are captured in Leadership on Trial: A Manifesto for Leadership Development (London, Ontario: Richard Ivey School of Business, 2010).

We have written on leader character in several publica- tions including M. Crossan, J. Gandz and G. Seijts, ‘‘Devel- oping Leadership Character,’’ Ivey Business Journal, 2012, January—February, hhttp://iveybusinessjournal.com/ topics/leadership/developing-leadership-characteri and G. Seijts, J. Gandz, M. Crossan and M. Reno, ‘‘Character: The Essence of Leadership,’’ Developing Leaders, 2013, 10, 11— 20. Our research and writing is influenced by the work of Christopher Peterson and Martin Seligman, who have done some very heavy lifting in their 800-page book devoted to the classification and description of virtues and character strengths, Character Strengths and Virtues: A Handbook and Classification (New York: Oxford University Press, 2004).

We held workshops with over 750 directors of public, private and not-for-profit boards across Canada in 2013 and 2014 on board governance and the importance of leader character. The 2013 article by J. Gandz, M. Crossan, G. Seijts and M. Reno, ‘‘Leadership Character and Corporate Governance,’’ Ivey Business Journal, May—June, hhttp:// iveybusinessjournal.com/topics/leadership/ leadership-character-and-corporate-governancei, was used to set up the conversation and discussion. The article also outlines the 11 character dimensions.

There are several articles that focus on leader character development, including M. Crossan, D. Mazutis, G. Seijts and J. Gandz, ‘‘Developing Leadership Character in Business Programs,’’ Academy of Management Learning and Educa- tion, 2013, 2, 285—305; S. Hannah and B. Avolio, ‘‘The Locus

of Leader Character,’’ Leadership Quarterly, 2011, 22, 979— 983; and S. Hannah and P. Jennings, ‘‘Leader Ethos and Big-C Character,’’ Organizational Dynamics, 2013, 42, 8—16. These articles all emphasize that the development of character is a life-long journey. At the Ivey Business School we have com- mitted to the development of teaching materials, especially case studies and real-world based experiences that will encourage and enable business schools to develop their own, more comprehensive and stimulating character devel- opment programs. The book Good Leaders Learn: Lessons from Lifetimes of Leadership (New York: Routledge, 2014) highlights numerous character shaping events as part of leaders’ learning to lead process.

We have developed a leader character diagnostic — the Leader Character Insight Assessment (LCIA) — in both self- administered and 360-degree formats. The LCIA is a resource to help individuals unpack and discuss the dimensions and elements of leader character. Individuals who complete the LCIA receive a report that provides individual feedback on the character dimensions of leader character and their asso- ciated elements. The report also provides suggestions on how to strengthen character dimensions.

Much has been written on the contributing factors to career derailment. Three insightful publications include R. Burke, ‘‘Why Leaders Fail: Exploring the Dark Side,’’ Inter- national Journal of Manpower, 2006, 27, 91—100; D. Dotlich and P. Cairo, Why CEOs Fail: The 11 Behaviors that Can Derail Your Climb to the Top – and How to Manage Them (San Francisco, CA: John Wiley & Sons, 2003); and W. McCartney and C. Campbell, ‘‘Leadership, Management, and Derailment: A Model of Individual Success and Failure,’’ Leadership & Organization Development Journal, 2006, 27, 190—202.

Gerard Seijts is a professor of organizational behavior at the Ivey Business School at Western University in London, Ontario. He holds the Ian O. Ihnatowycz Chair in Leadership. He received his Ph.D. in organizational behavior and human resource management from the Rotman School of Management at the University of Toronto. His areas of research are leadership, teams, performance management, and organizational change. He is the author of two recent books: Leadership on Trial: A Manifesto for Leadership Development (2010) (with Jeffrey Gandz, Mary Crossan and Carol Stephenson) and Good Leaders Learn: Lessons from Lifetimes of Leadership (2013). (Ivey Business School, Western University, London, Ontario, N6A 3K7 Canada. Tel.: +1 519 661 3968; fax: +1 519 661 3485; e-mail: [email protected])

Jeffrey Gandz is a Professor Emeritus of strategic leadership at the Ivey Business School at Western University in London, Ontario. After completing his M.B.A. and Ph.D. in organizational behavior at York University, he joined the Ivey Business School and taught in all its degree programs, eventually becoming the M.B.A. program director and associate dean of programs. For the last 13 years he has focused on executive education, designing and delivering custom leadership programs for clients around the world and writing books including Leadership on Trial: A Manifesto for Leadership Development; and Cross Enterprise Leadership: Leadership for the 21st Century (2010) (with Mary Crossan and Gerard Seijts); many articles in academic and practitioner journals; as well as over 100 case studies. (Ivey Business School, Western University, London, Ontario, N6A 3K7 Canada. Tel.: +1 519 675 5505; fax: +1 519 661 3485; e-mail: [email protected])

74 G. Seijts et al.

Mary Crossan is professor of strategic leadership at the Ivey Business School at Western University in London, Ontario. She holds the Ivey Alumni Association Toronto Chapter Faculty Professorship in Business Leadership. Her areas of research are leadership character, organizational learning for strategic renewal, and improvisation. She has authored several books, and over 100 articles and cases. (Ivey Business School, Western University, London, Ontario, N6A 3K7 Canada. Tel.: +1 519 661 3217; fax: +1 519 661 3485; e-mail: [email protected])

Mark Reno is a former post-doctoral research fellow at the Ivey Business School. He conducts research into the nature of good character in business leadership, and also teaches in the areas of executive leadership and character development, business ethics and responsibility, and strategic management. Mark is an active member of the Globally Responsible Leadership Initiative, the Academy of Management, and the International Leadership Association. He completed his M.Ed. and Ph.D. in education from the University of Toronto, where he focused upon organizational transformation and learning, and managerial-leadership development, respectively. Mark has served for over 20 years in executive management roles, including CEO roles in both the for-profit and not-for- profit sectors.