Linking a measurement of character to measures of financial return risks assuming leaders can produce a certain future and provides just another metric propping up a false belief, warns Tom Gibbons
In the aftermath of the 2008 semi-collapse of investment capitalism and the ensuing, and continuing, global recession, there is a growing trend calling for “more character” from those who we see as leaders in our organisations. Business schools around the globe have picked up on the need for character by emphasising and expanding curricula in ethics, sustainable growth, stakeholder value, community responsibility and a range of related topics. And, as would be expected when something is seen as necessary to lead successful organizations, research and metrics are being developed to measure character. Indeed there is already a growing body of work that ties measurements of character to measures of financial return.
Think for a moment what this may mean as this spreads out into a more general understanding of how we see organizations, success and leadership. It used to be that if your organisation did not produce the results expected of it, leadership was simply incompetent. Now, that leadership might be judged both incompetent and of questionable character. How would you like to carry that judgment around with you? Think for a moment further about what this may mean generally, not just for leadership. There is a virtual maelstrom of blame being thrown around now to avoid the judgment of incompetence in organizations. Add in the variable of questionable character and it will inevitably get worse. Few of us will escape the onslaught of avoidance techniques (including our own) and we can also expect greater consequences: higher turnover, lower engagement, greater stress and pressure, and perhaps worst of all, a turning away from accountability in its most basic form. I am not at all against a focus on character in our organisations. However, what I am against is how this focus on character is beginning to play out in our organizational lives. There are three critical areas that I consider to be highly problematic: character in the service of certainty; character being defined as owned by the individual; and the dumbing down of the concept of character by metrics. I have explained this in more detail below:
1. Character in the service of certainty.
How have we reached this point, this growing trend? The primary, fundamental and mostly unquestioned assumption regarding how we understand organizations is that those who lead can plan the future they want for their organisations. Leadership can create a future that is highly predictable/certain to happen; if leaders are sufficiently competent.
So how can the economic events leading up to 2008, and ongoing, be explained within the framework of this assumption? If you landed on a lack of competence as the reason for the financial crisis, you would be saying that there were an awful lot of incompetent people running large and important organizations. Many of these leaders were educated and trained in Western business schools. Many of them had the latest management gurus’ books on their office shelves. Many were coached or counselled by leading consulting companies. And prior to the 2008 economic crash, many were doing exactly what we wanted of our leaders: making a lot of money for their organizations and shareholders.
If you land on incompetence as the reason for the economic mess that has affected most of us, then there is an awful lot of incompetence in the entire realm of organisational life, likely including you and me.
So we tucked away the incompetence reason and landed on character as the explanation.
Interestingly, this is a very typical shifting of accountability in trying to explain why things don’t go as planned when the assumption of the ability to create certainty is unquestioned. This shift is one from perceived objective metrics to subjective ones. If, for example, as a leader of an organisation, you were to make an investment decision that didn’t succeed as planned, you could be accused of not analyzing with sufficient care or attention and objective reasons for this found.
If objectivity doesn’t produce a sufficient reason for failure, then the move is to something subjective, like character. No objectivity is needed here, no hard proof. If someone, especially someone in a position of power, accuses you of a character flaw it is very, very hard to refute this since the definition of character is subjective. You do have a character flaw from the perspective of their definition, and their definition is right if they have enough power.
Character in the service of certainty is painfully uncreative, it becomes simply another “thing” upon which we can hang our hopes for a certain future. Unfortunately, as noted above, the consequences when character does not produce certainty are even more painfully personal and destructive.
If we want to have productive discussions about the need for a different kind of character in organizations we must, at the very least, decouple it from our assumption that certainty can be created. It would be more effective to do away with this assumption in the first place. Then we could talk about character as the highly subjective and context-dependant thing it really is. We could talk constructively about character and power, character and the requirement for profit, character and personal compromise.
Are these not the discussions we should be asking our leaders to have; the debates that we should be having ourselves?
Tom Gibbons is managing director, sustainable development, at TMS Americas