When Boeing’s 737 MAX crisis unfolded, Volkswagen’s emissions scandal broke, or Lehman Brothers collapsed, we didn’t hesitate to judge the character of those at the helm. Yet leadership development programs tend to focus almost exclusively on technical competencies and “leadership skills” while avoiding conversations about character development.
This gap between what we judge in failed leadership and what we prioritize in leadership development creates real business consequences. Research by KRW International reveals that CEOs with high character ratings from employees achieved an average return on assets of 9.35% over two years, that’s nearly five times higher than the 1.93% ROA for CEOs with low character ratings. The evidence is clear: a leader’s character directly impacts business performance.
Character in leadership isn’t simply about ethics. It forms the foundation for all judgment, decision-making, and leadership behavior. Character-driven leadership encompasses key traits like humility, courage, integrity, responsibility, forgiveness, and empathy—qualities that drive organizational performance when deliberately cultivated.
Character development belongs at the core of our leadership strategies. By cultivating leaders whose moral foundation is as robust as their technical expertise, we create measurable business impact that transforms both culture and results. So, what is “character”? One perspective views character as one’s true self – who leaders are when no one is watching. Character reflects a leader who serves others; at its worst, it portrays one focused solely on self-interest. It’s that silent voice that guides decisions, sometimes loud in quiet moments but often too faint for the daily demands of leadership.
Character is a unique blend of beliefs, principles, and habits that influence both our individual selves and the world we inhabit. It comes down to a person’s ability and desire to do the right thing, regardless of how it affects them personally. We express our character through our behaviors. However, two key points must be clarified: character should not be confused with personality or equated with values.
Character can either enhance or undermine all other resources. A leader may possess knowledge, eloquence, attractiveness, and connections with those you aim to influence. However, if employees and colleagues detect flaws in your character, your ability to lead, and your influence will significantly diminish. Conversely, as Francis Bacon pointed out in the 17th century, being recognized as a person of strong character boosts your capacity to lead and influence others. This is because people trust your intentions, feel assured in your leadership, and view you as someone worthy of emulation.
Leaders must first establish a list of crucial character traits that align with strategic objectives.
Character-driven leadership encompasses more than just ethics or doing what is right. According to the International Labor Organization, more than one in five individuals have been affected by discrimination and harassment at work, and one in four does not feel valued in their workplace. Research from Amy Randel of San Diego State University and colleagues indicates that character-based judgment enhances the performance of superiors and elucidates instances of misconduct or poor decision-making. Character significantly influences individual well-being and sustained performance; consequently, it is pertinent from a leadership standpoint across all organizational tiers. Furthermore, according to Yoshie Tomozumi Nakamura of Washington University and Julia Milner of EDHEC Business School, leaders with humility, empathy, and courage are likelier to engage in inclusive leadership behaviors and communication.
We often assume that character is only linked to personality, not the foundation of judgment and decisions. Many leadership programs operate on the belief that technical skills alone are sufficient for effective leadership, rather than prioritizing mature character development. A common misconception is that character is a fixed trait rather than a quality that can be developed when we consistently show up with courage, honesty, and vulnerability. Character is about way more than ethics. It is the foundation for all judgment, decision-making, and leadership behavior. These misconceptions explain why character development remains undervalued in leadership programs. Yet research shows that specific character traits directly influence leadership effectiveness. The most crucial include:
- Humility means being aware of your limitations, recognizing that you don’t have all the answers and knowledge, and understanding that someone else on the team might. Humility is not thinking less of yourself but about yourself less, ensuring that it is “we” and not “I”.
- Courage means having tough conversations, creating constructive conflict, and generating high intellectual friction with low social friction. This is also about advocating for fairness. When leaders fail to address colleagues who have behaved inappropriately, they become part of the problem. As the saying goes, when we see a problem and don’t address it, we automatically become the problem.
- Integrity means matching words with actions. Leaders with integrity honor commitments, speak truthfully, and choose principles over convenience. They prioritize doing what is right over what is convenient or self-serving.
- Responsibility ensures that leaders take ownership of their decisions, acknowledge their mistakes (which we all make!), and strive to support others – aiming to improve the world around them. Ownership means going above and beyond, not blaming others, and committing to our goals.
- Forgiveness is crucial for leaders since it encourages them to focus on progress and learn from both their own and others’ mistakes, instead of placing blame. It allows individuals to take risks, express creativity, and foster personal growth in their leadership roles. When people let go of past grievances and resentment, individuals, organizations, institutions, and societies can advance.
- Empathy involves understanding others, empowering them, actively caring for them, and showing commitment to their development. This trait connects leaders to their teams on a human level, fostering psychological safety and innovation.
Of course, it is important to go beyond simply identifying these key traits. Developing character requires intentional effort. While delegation, conflict resolution, and business acumen can be taught, many contend that certain character traits—like courage, integrity, curiosity, and empathy—are not easily instilled. These traits can be nurtured, however, and enhanced through learning, feedback, accountability, setting key behavioral indicators (KBIs), and coaching. Given the strong link between character and decision-making, which significantly influences organizational success, companies should invest strategically in character development as they do in technical skills. Implementation requires a dual focus – organizational systems and individual practices – working in concert to embed character development into a company’s DNA.
At the organizational level, leaders must first establish a list of crucial character traits that align with strategic objectives. Successful companies are explicit about both performance and behavioral expectations, communicating not what results matter but how those results are achieved. This clarity helps everyone in the organization understand what is expected of them, which behaviors are unacceptable, and how character-driven leadership works at all levels.
Next, link these character traits to business objectives. When organizations connect traits like curiosity directly to innovation goals or integrity to customer trust metrics, character development naturally becomes strategic rather than aspirational. A practical framework includes (1) strategic objectives, (2) key performance indicators, (3.) KPI targets, and (4) behavior and character goals that support achievement.
Character development requires both formal and informal learning opportunities. While traditional training and coaching will always be valuable, today’s leaders often prefer development integrated into their workflow. Organizations should create an ecosystem of learning that includes mentoring relationships, reflection practices, and real-time feedback.
To that point, feedback and accountability systems that measure character development are essential because without measurement, character initiatives lose their strategic backing. By integrating character assessment into performance evaluations and leadership reviews, organizations can track progress and demonstrate the value and impact of character-driven leadership.
For individual leaders, the journey begins with setting the right tone and modeling the desired traits consistently. This, of course, takes substantial self-awareness and leaders can cultivate this by regularly asking themselves: “Does my intention align with my impact?” Combining self-reflection with feedback from multiple sources accelerates character development while building trust.
Leaders should also intentionally shape their team environment by deliberately discussing and recognizing character traits as a way to foster cultural norms and behavior in employees. Regular – and sincere – feedback from team members provides insight into both technical competence and interpersonal dynamics that allows leaders to customize their efforts to better align with the team’s goals.
Character isn’t a “soft” trait – it’s a competitive necessity. Today’s business challenges mean that leaders need a strong moral compass in order to succeed, and resilience to guide organizations through uncertainty and disruption. Character-driven leadership correlates directly with stronger financial performance, higher employee engagement, and greater innovation. Organizations that invest in character development aren’t just doing what’s right – they’re building sustainable competitive advantage.
The most successful companies recognize that developing character in leadership and throughout the workforce requires the same disciplined approach as developing an operational strategy. They define specific traits, measure progress, and hold leaders accountable not just for business outcomes but the behaviors that achieve them. This integrated approach creates organizations where integrity drives results. Perfection may be unattainable, but we can strive to become better individuals, leaders, teams, and organizations.
© IE Insights.
