The enormous advantages of ethical leadership
Does a leader’s character really contribute to the organization’s bottom line, or are strong business results simply a reflection of a solid business model and positive macroeconomic forces? That is one of the questions asked by Fred Kiel in his book Return on Character: The Real Reason Leaders and Their Companies Win. The findings of the book are based on a large number of surveys of employees of substantial organizations, concerning their leaders, as well as interviews with the leaders themselves, and also financial information relating to those organizations.
So do organizations whose leaders show high levels of integrity and moral character do better or worse financially than other organizations? According to the key research findings, character-driven leaders deliver nearly five times the return on assets delivered by leaders near the bottom of the character curve. Moreover, it is possible to develop the habits of strong character and unlearn the habits of poor character.
The research methodology used in the study necessarily relies on subjective interpretation, so the outcomes are unlikely to impress a hardened statistical skeptic. Nonetheless, the book does create a persuasive argument for the business benefits of integrity, responsibility, forgiveness and compassion, and the surprisingly high correlation between those attributes and effectiveness in decision making, strategy, and other leadership skills.
As the author says, people are hungry for information that allows them to believe that we can and in fact must demand more from our leaders. This book is an excellent step in that direction.