- 27 May 2015
Leadership Program | Book Presentation and Discussion: “Return on Character. The Real Reason Leaders and Their Companies Win”
On 27 May 2015, Kelly Garramone, Managing Partner at KRW International, presented the book “Return on Character: The Real Reason Leaders and Their Companies Win” on behalf of author and colleague Fred Kiel at the Aspen Institute Germany. The book is the product of their joint research into the connections between the character of a CEO and his or her company’s bottom line.
They identified integrity, responsibility, forgiveness, and compassion as the four main aspects of character. They make the argument that a company’s business results are the sum of macro-economic factors, their business model, and the leadership effect.
From 2006 to 2013, they surveyed 84 Northern American CEOs and over 8,500 of their employees and identified two types of CEOs. Whereas the first group uses head and heart to orchestrate a high-performance team (so-called virtuosos), the second group is much more self-absorbed and out for their own gains. Interestingly, many of the second group over-estimated their reputation with their employees while many of the first group under-estimated theirs.
The average self-absorbed leader’s return on assets (net operating income as a proportion of total assets) was 1.93%, whereas the average virtuoso’s was as much as 9.35%. - meaning that virtuosos’ financial performance was about five times higher than that of self-absorbed leaders. The employee engagement in their companies turned out to be 26% higher and their corporate risk lower.
The study concluded that a company's success depends largely on its leader: Character exponentially magnifies skills