Canadian HR Reporter

STRATEGIC CAPABILITY NETWORK'S PANEL of thought leaders brings decades of experience from the senior ranks of Canada's business community. eir commentary puts HR management issues into context and looks at the practical implications of proposals and policies. CANADIAN HR REPORTER December 12, 2016 EXECUTIVE SERIES 15 www.scnetwork.ca PANELLISTS: • Ian Hendry, president of the Strategic Capability Network and vice-president of HR and administration at Interac in Toronto • Jan van der Hoop, president of Fit First Technologies in Toronto • Tracey White, owner and managing director at Strategy in Action in Toronto • Paul Pittman, founder and president of the Human Well in Toronto Ian Hendry Paul Pittman Jan van der Hoop Tracey White Character has been codifi ed. Now what? Four SCNetwork members engage in a back-and-forth on Gerard Seijts' presentation Ian Hendry: On the basis that Western University's Ivey Business School research appears to have been constructed, and subsequently validated largely by the corporate world, I think it sheds an interesting perspective on character. I wouldn't waste a lot of time quibbling over whether 11 (char- acter traits) is the right number, but there is no question a lack of certain attributes has been at the core of numerous corporate im- plosions. Perhaps Wells Fargo is the latest, but the United States election will demonstrate how important character is seen as in- tegral to leadership, albeit in some minds, the best of two evils. e importance of character is not new, but has it been under- valued? With today's need for quarterly results, unless charac- ter is brazenly dishonest, isn't it just convenient to overlook its importance? Paul Pittman: Character is front-of-mind because of two well-known political fi gures fi lling our news platforms, both of whom are characterized as bad. We seem increasingly drawn to behavioural traits as a means of predicting out- comes and, in business, the cre- ation of enterprise value. First there were strengths, then values, and now character, and many of us have been screening candidates to assess "character" using other terminology for years. More information is always better, but I and several folks at our table struggled to see a major distinc- tion between these techniques. e takeaway for me is that by no means is this the simple tool that was portrayed. Behaving in the right way (doing the right thing) as opposed to being bad, is a subtly layered, complex response depending on the circumstance. For example, what is perceived as the "right thing" is going to change as the makeup of the workforce changes. Strength of character is judged by stakehold- ers in the moment, and while we all agree on the basic tenets of good behaviour, the degree may be subject to circumstance. It's not absolute and companies need to agree on their base defi nition before they start testing for it. Most organizations strive to be good, despite there being no box to tick in the checklist provided by shareholder advocacy groups. Bankers behaved badly in 2008 and, in retrospect, we have deter- mined they demonstrated poor character, but what about those who created the system that per- mitted — nay, encouraged — them to behave in the way they did? Time changes perception, as does circumstance, and targeting good character may be a moving target. Jan van der Hoop: It was inter- esting that the topic of "character" was such a draw — a full house, with oversubscribed, big players in the room. It clearly strikes a chord. This thing called "character" has always been elusive and hard to defi ne. And yet, as human be- ings, we generally "get it" at a sub- jective, almost instinctive, level… an individual or a culture either resonates with us in a pleasing way, or it does not. I can only imagine how hard the initial work was for these guys to codify character — to put lan- guage and metrics to it. e model Seijts presented makes sense. For me, the face validity is strong. e real question in my mind is, now what? Gerard Seijts was upfront about how heavily the results of a self-assessment are dependent on an individual's self-awareness and candour, and even a 360-degree approach cap- tures perceptions that are fi ltered through the character and biases of the rater. But even if data can be "normed" somehow against an ex- ternal benchmark (say, the general population or some generally held ideal), I wonder about the practi- cal applications. e vision is ap- pealing — some high-principled future state — but I'm missing the steps that will get us there and I'm unconvinced the world will be a diff erent place. Ian: But if it has to start some- where, is it not at the board or CEO level? A values-based culture is more easily driven by a founder who is principled, rooted in the "character" Seijts has identifi ed, but then instilled in her actions and lived through the behaviours (think Marriott). In a for-profi t organization, it's the principal shareholders who determine what success looks like and what sort of person can achieve those goals. Tracey White: In society and business, we get leaders who are motivated by the prevailing values and rewards. If we value material gain more highly than, say, social equity or environmental sustain- ability, then we will get people in positions of leadership who seek material rewards. We have lived in a world, since the Ronald Reagan-Margaret atcher era, that told us corpo- rations exist to maximize share- holder value and nothing else. Milton Friedman famously said a focus on anything else is social- ism. ese values launched a gen- eration of leaders for whom greed was good — from Enron to Wells Fargo. I agree with Paul — organiza- tions have been on a quest for an easily administered, scalable tool to identify "leaders" from the wid- er population. Leaders defi ned as those who will maximize whatever outcome is sought. In corpora- tions, this means shareholder val- ue or profi t, but these values have been mirrored in the public sphere, too. I fear "character" will simply be another chapter in this quest. At the same time, I have a strong feeling we are off course in terms of the types of behaviours we reward in leaders. is thing we call "character" does seem to have been lost — my grandpar- ents' generation would have called it "moral fi bre." So, I left the pre- sentation with a sense Seijts was on track. Paul: At the risk of sounding obvious, no company, at least with public shareholders, targets bad — but we create environments that encourage or allow certain character traits to come to the fore and that overzealousness, left un- checked, tips into bad. Murder is bad and charity is good but the subtleties in cor- porate life are not so clear. Bank- ers are now deemed bad, but at the time, they were creative and driven and loved by shareholders. EpiPen manufacturers, testing what the market would bear for their product, it seems now, be- haved badly. e CEO at Wells Fargo, now deemed bad, probably knew noth- ing about what was going on — his employees lacked the "moral fi - bre" to not use a system that mo- tivated them to earn more money. Cable companies that force us to buy products we don't want in order to enjoy those we do — hmm, not so bad. Canada's banks who give many millions of share- holders' money to various causes are of good character (they saved us from the banksters, but not the good causers). Is atcher turning in her grave? Seijts has got us talking, which is a good thing. "High moral turpi- tude" is highly desirable and we all seek what we think is right, but the constant ebb and fl ow in corpo- rate life changes with the mood in society, the economy, the business we are in, etcetera. ere are no absolutes but a process of continuously striving. Like diversity and sustainability, good character is something we need in leaders, and while indi- vidual successes may be hard to pin down, they all, over time, will produce better results. I shared our session with a CEO prepared for a rant about esoteric HR ritual. e drive for dividends and capital value clearly motivates the behaviour of boards, with in- dustrial relations and public rela- tions providing a governor, but strength of character in a CEO was essential in enabling the ex- ercise of judgment over the "right thing" for all stakeholders. Jan: Indeed. Perhaps the great- est value here is that this has us talking. In my experience, con- versations about character in or- ganizations have usually been in whispers, with clicking tongues and shaking heads. Even when it was in the open, say, in the succession planning cycle, the language to describe aspects of character was elusive and prone to misinterpretation. Join our professional community of Canadian HR & Organizational Leaders: • Connecting @ monthly events • Collaborating with peers • Challenging conventional thinking The Power of Human Capital CULTIVATING LEADERSHIP FOR 35 YEARS Great Leaders GROW www.scnetwork.ca FRAMEWORK > pg. 16 is thing called "character" has always been elusive and hard to defi ne.

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