W11 power point

Transformational change and leader character

Gerard H. Seijts *, Jeffrey Gandz

Ivey Business School, Western University, 1255 Western Road, London, Ontario N6G 0N1, Canada

Business Horizons (2018) 61, 239—249

Available online at www.sciencedirect.com

ScienceDirect www.elsevier.com/locate/bushor

KEYWORDS Leadership; Leader character; Transformational change; Performance; Leadership qualities

Abstract Leader character is foundational to good leadership. We define character as an amalgam of virtues, values, and personality traits that influence how leaders behave in various contexts. Our research identified 11 dimensions of leader character and 60-plus character elements that are illustrative of those dimensions. We inte- grate two frameworks: John Kotter’s eight-step model of leading change and our framework of leader character dimensions and associated elements. Specifically, the objective of this article is to illustrate which dimensions of leader character come into play at various points in the organizational change process and how their presence or absence affects the outcomes of the change process. Beyond that, we draw inferences about how organizations might develop character among all leaders but especially those younger, less experienced leaders who will become tomorrow’s leaders of change projects. # 2017 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.

1. Transformational change

As educators, researchers, and consultants, we have worked with many organizations–—some suc- cessful, some not–—engaged in transformational change. We have been brought in at various junc- tures: the very earliest stages of change, after things started to go wrong and, occasionally, at the salvage stage when it was clear the desired change was not going to happen.

* Corresponding author E-mail addresses: [email protected] (G.H. Seijts),

[email protected] (J. Gandz)

0007-6813/$ — see front matter # 2017 Kelley School of Business, I https://doi.org/10.1016/j.bushor.2017.11.005

Throughout, our ideas about leadership have evolved and we have begun to place a strong em- phasis on leader character in our research, student programming, and outreach activities. Our interest in leader character emerged from the 2008—2009 financial crisis and a qualitative study we conducted that focused on why some organizations in the financial sector failed or had near-death experien- ces while others prospered, avoiding risks that they did not understand or could not manage (Gandz, Crossan, Seijts, & Stephenson, 2010). In the course of this study, leader character was a recurring theme in our conversations with leaders in the public, private, and not-for-profit sectors. Based on both qualitative and quantitative research since

ndiana University. Published by Elsevier Inc. All rights reserved.

240 G.H. Seijts, J. Gandz

that time, we have defined leader character as an amalgam of virtues, values, and personality traits that strongly influence how leaders behave in vari- ous contexts (e.g., Crossan et al., 2017; Crossan, Seijts, & Gandz, 2016).

Most recently, we have been thinking and writing about the connection between success in leading deep and comprehensive change and the character of those who succeed in change leadership roles. In this article, we integrate two frameworks. The first framework is John Kotter’s (1996) eight-step model of leading comprehensive change that, in one form or another, is the starting place for most executives, directors, entrepreneurs, consultants, or others charged with leading change or helping others to do so. The second framework (see Figure 1) is based

Figure 1. Character dimensions and associated elements

on our own research on leader character and is designed to give executives an accessible language as well as a set of relevant behaviors associated with character in the context of business organiza- tions (Crossan et al., 2017; Crossan et al., 2016).

The leader character framework is based on research with over 2,500 leaders from North Amer- ica, Europe, Asia, and Latin America. The frame- work postulates that there are 11 dimensions of leader character that influence individual and or- ganizational outcomes independently and interac- tively. For example, effective coaching and development requires the leader to act with integ- rity, courage, temperance, and humanity to get meaningful results; successful team decision making requires the leader to demonstrate collab-

Transformational change and leader character 241

oration, humility, accountability, and judgment; and delivering a compelling presentation requires the leader to display transcendence, drive, and integrity. Our research also identified a set of 60- plus behaviors or character elements, which help individuals unpack character in a way that makes character-related leadership behaviors observable, measurable, and actionable. We have been working with organizations that have built explicit recogni- tion of character in their leadership development processes and are taking actions to enhance and build stronger character in their leaders.

The objective of this article is to illustrate which dimensions of leader character come into play at various points in the organizational change process and how their presence or absence affects the outcomes of the change process. Beyond that, we draw some inferences about how organizations might develop character among younger, less expe- rienced leaders who will become tomorrow’s lead- ers of change projects.

2. Leading change

Kotter identified eight steps in leading successful organizational change. They are (Kotter, 1996):

1. Establish a sense of urgency; without this, the momentum for change will die far short of the finish line.

2. Create a guiding coalition–—a group of people with a shared objective, the credibility to guide the change process, and power. This is essential since no leader can lead the change process alone.

3. Develop a vision and strategy, helping to break through the myriad of internal and external forces that support the status quo and encourage individuals to initiate coordinated actions that are necessary to move in the desired direction for change.

4. Communicate the change vision, ensuring that people in the organization both understand and eventually accept the vision.

5. Empower employees for broad-based action. This is intended to remove barriers to implemen- tation of the change as well as build their en- gagement and commitment to seeing the process through. These barriers may include structural barriers, the lack of needed skills, and personnel and information systems as well as managers who discourage actions aimed at implementing specific initiatives.

6. Generate short-term wins to help build the cred- ibility needed to sustain the efforts to bring change to the organization. Visible, unambigu- ous wins create the necessary momentum that propels the change forward.

7. Consolidate gains and produce more change to prevent leaders from declaring victory too soon and moving on. For example, deep and compre- hensive change often involves multiple change projects–—HR systems, reporting structures, in- tegration of systems, and so forth.

8. Anchor new approaches in the culture so that new practices can grow deep roots, including newly desired behaviors. Absent deep roots, these practices will be fragile and people may revert to their old routines.

3. Leader character

Recent studies have shown that character is foun- dational to the quality of decision making and hence an avenue through which organizations can enhance performance (e.g., Bright, Cameron, & Caza, 2006; Crossan et al., 2017; Sosik, Gentry, & Chun, 2012). As we look back on major transformative changes, we can see clearly the character dimensions iden- tified in Figure 1 and how they played out in the actions of those who led these changes. Below, we describe the 11 dimensions of leader character and their importance for change.

3.1. Drive

The leader strives for excellence, has a strong desire to succeed, tackles problems with a sense of urgency, and approaches challenges with energy and passion. Without drive, leaders would not even tackle change since, as Machiavelli said in The Prince more than 500 years ago: “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.” This certainly is what large-scale, transfor- mative change is all about.

3.2. Collaboration

The leader values and actively supports the devel- opment and maintenance of positive relationships among people, encourages open dialogue and does not react defensively when challenged, and is able to connect with others in a way that fosters the productive sharing of ideas. While there are exam- ples of change that are driven by individual leaders

242 G.H. Seijts, J. Gandz

who act alone, most complex organizational change requires teamwork, the formation of coalitions, and acceptance of change by those affected by it. Real collaboration is a prerequisite for acceptance.

3.3. Humanity

The leader demonstrates genuine concern and care for others; appreciates and identifies with others’ values, feelings, and beliefs; and understands that people are fallible and offers opportunities for individuals to learn from their mistakes. Inhumane change such as ‘slash-and-burn’ tactics may be powered through and may even be effective in the short-term. However, it leaves a toxic and corrosive culture that makes it more difficult to generate and implement subsequent change ef- forts.

3.4. Humility

The leader understands the importance of thought- ful examination of one’s own opinions and ideas; does not consider oneself to be more important or special than others; is respectful of others; and appreciates others’ strengths and contributions. Even the best change plans encounter problems in their execution. Leaders who do not have the humility to recognize their own errors and omissions will not make the necessary course corrections to ensure success.

3.5. Integrity

The leader holds oneself to a high moral standard and behaves consistently with ethical standards even in difficult situations, is seen by others as behaving in a way that is consistent with their personal values and beliefs, and behaves consistently with organizational policies and practices. When people feel misled, manipulated, or sandbagged into accepting changes, they will be lukewarm in their support or could turn from supporters to resistors of the current and future change efforts.

3.6. Temperance

The leader conducts oneself in a calm and com- posed manner, maintains the ability to think clearly and responds reasonably in tense situations, com- pletes work and solves problems in a thoughtful manner, and stays grounded. Seldom does every- thing planned meticulously in a complex change effort actually happen. Change sometimes requires more patience, calmness, and preparedness to

adjust to myriad actions and schedules . . . all of which require a degree of temperance.

3.7. Justice

The leader ensures that individuals are treated fairly and that consequences are commensurate with contributions, provides others with the oppor- tunity to voice their opinions on processes, provides timely and candid explanations for decisions, and seeks to redress wrongdoings inside and outside the organization. When change is viewed as unjust by those affected by it, their support may turn into overt or covert resistance.

3.8. Accountability

The leader willingly accepts responsibility for de- cisions and actions, is willing to step up and take ownership of challenging issues, reliably delivers on expectations, and can be counted upon in tough situations. Promoters of change must be prepared to bear the consequences–—good or bad–—if they are to be viewed as effective leaders.

3.9. Courage

The leader does the right thing even though it may be unpopular or actively discouraged, or even result in a negative outcome for him or her personally; shows determination in confronting difficult situa- tions; and rebounds quickly from setbacks. Not all resistance can be turned into support and not ev- eryone will be happy with the change. Hence, it takes courage to lead change.

3.10. Transcendence

The leader is generally appreciative of excellence, whether in design or implementation, in a variety of areas: the arts, literature, sports, public policy, or business. Striving for excellence in both the sub- stance and process of change means setting sights high and taking the risk that the result may fall somewhat short of the aspiration.

3.11. Judgment

The leader makes sound decisions in a timely man- ner based on relevant information and a critical analysis of facts, appreciates the broader context when reaching decisions, shows flexibility when confronted with new information or situations, and reasons effectively in uncertain or ambiguous situations. Judgment is required in every stage of

Transformational change and leader character 243

the change leadership process, from envisioning the change to celebrating its achievement.

4. Leader character and leading change

More than one of these character dimensions may be involved in each phase of the change process. In the following examples, we have picked out those dimensions that–—in our own experience and pub- lished reports and studies of change–—appear to have been most important at each of the eight stages of Kotter’s change model. Figure 2 summa- rizes the relative importance of each character dimension in the change process.

4.1. Establishing a sense of urgency

Drive is essential to tackle challenges with a sense of urgency. Leaders with drive approach challenges with energy and passion and display a strong desire to succeed. For example, Bill Gates has argued repeatedly that the world needs a better warning and response system for infectious diseases. His calls for such a system intensified after the Ebola epidemic that ravaged the lives of thousands of people in Guinea, Liberia, and Sierra Leone. He firmly believes that a major outbreak of an infec- tious disease, taking the lives of more than 10 mil- lion people per year, has a 50% chance of happening in his lifetime. In a 2015 TED Talk, he demonstrated such forward thinking–—transcendence–—and argued

Figure 2. The relative importance of each character dim

that time is not on our side and that we have to get ready for the next epidemic that lies ahead.

Creating a sense of urgency also requires the leader to be truthful and straightforward and to be transparent even in the most challenging situations–—to demonstrate integrity. For example, in 1992, Arthur Martinez joined Sears as head of the merchandising group. The company had lost billions of dollars the year prior. He made dramatic changes within the first few months in his new position as incremental improvements were going to be insuffi- cient. For example, among his first decisions was to terminate the Sears catalog, which had been in exis- tence for over 100 years. Martinez was quickly nick- named “the man who killed the catalog” and “the Ax from Saks” because of the deep cuts he made in store operations (Martinez, 2001). Few employees truly understood the dire situationthe company was facing in part because of poor communication–—lack of candor–—from the prior leadership. The many misconceptions that employees held were addressed through candor in communications in town halls and other forums that created a sense of reality and urgency for change throughout the company.

4.2. Creating a guiding coalition

Collaboration is an essential ingredient to make the guiding coalition work. Those involved need to be open-minded, flexible, and collegial in their inter- actions. Antoni Cimolino is the artistic director of the Stratford Shakespeare Festival in Stratford, Ontario. One of his main objectives is to define a

ension in the change process

244 G.H. Seijts, J. Gandz

compelling vision for the play he directs. He insists that theatre is a collaborative art form. He tells his colleagues what kind of world he wants to create on the stage. He then invites everybody into the con- versation. In his words (Seijts, 2014, p. 282):

We want to be stars of our own movies. The great gift for me was to realize there are many people here, each carrying a different piece of the jigsaw puzzle to the table and, if you really want to make it work, each person plays a part . . . I then realized that by enlisting peo- ple’s support and getting them to really want to come to the table, we would ultimately have a much better product—a better play.

However, recognizing that you can benefit from other people’s insights is not enough. Many individuals simply will not risk disagreeing with the leader in high-stake situations. The leader needs to create channels for feedback and keep them open. As Nar- ayana Murthy, co-founder of Infosys, said: “The day a leader closes those feedback channels . . . is the day when a leader’s power starts diminishing and he or she starts doing things that are completely wrong” (Seijts, 2014, p. 36). Leaders have to be reflective and respectful as well as demonstrate an interest in continuous learning (i.e., remain humble). Every night when Murthy goes home, he makes a point of helping to clean the bathrooms at his home. Why does he pick up a toilet brush? Taking a lesson from Gandhi, he tries to perform tasks that might be considered beneath his elevated station in life as a reminder that all contributions to the organization and society should be valued.

Leaders also need to demonstrate temperance when the guiding coalition is dealing with the myri- ad of challenges at hand. They remain disciplined and stay on track in defining the shared objective and the ways in which it can be achieved. They control strong emotions like anger or disappoint- ment, especially when obstacles and setbacks are encountered. For example, Germany’s Chancellor Angela Merkel has been in charge of Europe’s big- gest economy since 2000 and sets the political tone on the continent. She led Germany and Europe through a succession of daunting political, financial, economic and, most recently, human crises and throughout the years has been the epitome of calm- ness and self-control.

4.3. Developing a vision

Steve Jobs, co-founder of Apple, was widely seen as one of the greatest visionaries and innovators in our lifetime. Minda Zetlin (2015) wrote that “while everyone else was living in the present, he had

uncanny insight into how market forces and social trends were changing the world around him. That vision made Jobs, and Apple, virtually future- proof.” Jobs explained that vision is often the product of a broad education (Wolf, 1996):

Creativity is just connecting things . . . When you ask creative people how they did some- thing, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while. That’s because they were able to connect experiences they’ve had and synthesize new things. And the reason they were able to do that was that they’ve had more experiences or they have thought more about their experiences than other people.

This observation speaks to the dimension of tran- scendence and the elements of creativity and ap- preciation for experiences that are outside one’s own area of expertise, as well as the dimension of humility and the element of reflection.

A key requirement of any vision is that it reflects a purpose that inspires employees on a personal level. Daniel Akerson, former CEO of General Mo- tors, led the company through dramatic change after the automotive bailout. Employees were shak- en when the company came out of bankruptcy. Many feared for the long-term viability of the company and hence their jobs. Akerson explained (Seijts, 2014, p. 57):

We lost our way and strove to ‘meet the mar- ket’ . . . That’s a flawed strategy, a poor vision. Employees see that; they are not inspired by ‘average’ and start to disengage. Today’s Gen- eral Motors exhibits greater energy and enthusi- asm because they see the efforts, and initial success, to take our game to greater heights.

Good leaders have figured out that determination is the fuel that makes success happen. It takes tran- scendence, drive, humility, and courage to formu- late, communicate, and execute a bold vision for change. Our own experience suggests that visions proclaimed from on high are less effective than those that are developed with the engagement of those who will be affected by them, thus placing great value on leaders who are willing to collabo- rate in the process of creating and promulgating compelling visions (Gandz, 2009).

4.4. Communicating the vision

Communication is essential in any leadership role and its importance is elevated during organizational change and crises (e.g., Gilley, Gilley, & McMillan,

Transformational change and leader character 245

2009; Kotter, 1996). For example, leaders have to keep employees informed in order to get their views and input in developing specific ideas as to what needs to be done further. Leaders also need to communicate progress and the positive steps taken, both to employees and external stakeholders. Any leader who has difficulty in being truthful and straightforward with others in trying situations is at a disadvantage. Employees and the public expect their leaders to be open and honest in relationships and communications.

In 2010, Steinthor Palsson became the CEO of Landsbankinn in Iceland. He left a senior position with the pharmaceutical company Actavis and signed on to build a bank worthy of respect out of the ashes of Iceland’s oldest full-service financial institution. Among his first priorities was to build trust outside the bank by holding public meetings. He did so despite the anger over what had happened in the community, which posed a real threat to the safety of bank employees. Many citizens had lost their homes, their jobs, and all of their life savings. This led them to vent their frustration at any banker they encountered. Palsson explained that the bank’s new management team had to show the public that it was strong and ready to do what was needed to regain trust. Hiding in the office would not have accomplished this. The media cov- ered the meetings; the end result of the broad consultation was that Palsson and his colleagues gained credit from the public (Watson, 2014).

Furthermore, after numerous meetings with em- ployees of the bank and citizens, Palsson and his management team took out a two-page ad in Ice- land’s newspapers listing 28 promises they were making to their customers and the country. The objective of the ad was to be transparent and to hold the bank accountable for its actions over the coming months. Palsson showed integrity, account- ability, and courage.

4.5. Empowering others for broad-based action

Change is greatly enabled when those who will be affected by it are involved, engaged, and empow- ered to determine both the content and the process of that change (e.g., Seijts & Roberts, 2011). Lead- ers need to have the courage to relinquish power to others while retaining accountability for the out- comes of the change. A fire at the head office of MDPSI, the financial services arm of the Canadian Medical Association with more than $30 billion of physician’s investments under administration, forced an evacuation. Within a couple of days, the people who normally worked in the head office

had either been relocated to other offices in Ottawa, its parent organization’s office building across the street, or–—in the case of more than 400 people–—had been asked to work from their homes, often in less-than-ideal circumstances.

When it became obvious that the organization would not be able to rebuild, renovate, and move back into the head office, the CEO and other members of the executive team decided on a bold move–—to give employees the option of not having offices but, rather, working from home and using a variety of meeting rooms equipped with the very latest in technology for tele- and videoconferenc- ing. Each employee could make this decision as well as decisions about working hours, breaks, vacation schedules, and time off from work. When they worked in teams, either within their function or cross-functionally, the teams themselves had to ratify any proposed working arrangement. Further- more, employees could change the amount of fixed versus flex time provided they could organize their work properly and get the approval of their teams.

The decision to empower employees to make the fixed or flex decision was made following numerous employee interviews, focus groups, and surveys in which employees at all levels–—from first-line work- ers to senior executives–—were engaged and re- quested to give their views about the fixed- versus-flex system as well as indicate their personal preferences.

Based on these inputs, the company pushed ahead with designing a refurbished building with work spaces, lounges, mini-dining areas, advanced telecommunications systems, and shared document management systems. Because employees knew that they would have choices about where, when, and how to work, they threw themselves fully into the task of designing their own workplace of the future. It took just over a year for the new facilities to be built and equipped.

Two years after the fire, employee engagement scores had surpassed the very high levels they were at prior to the event and approximately 40% of the employees had elected a flex arrangement. While productivity was very difficult to measure, the CEO believes it had gone up and felt that it was easier to recruit new people to the organization. Most impor- tantly, the elimination of physical zones based on departments or functions had produced the kind of cross-functional collaboration that was spawning client-focused innovation and creativity.

4.6. Generating short-term wins

Our experience has shown that failure of a change initiative can often be attributed to the lack of early

246 G.H. Seijts, J. Gandz

wins despite significant efforts of those tasked with implementing the change. Employees would like to see unambiguous improvements as a result of the change if they are to remain engaged. The setting of short-term goals and the associated wins are the rallying points that the leader and the guiding coalition should focus on. For example, Meg Whit- man, who served as President and CEO of eBay, strongly believes in metrics: “If it moves, measure it” (Galbraith, 2011). For such measurement to happen, the leader needs to demonstrate the char- acter dimensions of drive, integrity, and account- ability. That is, the leader needs to communicate the goals and progress in an open and honest man- ner as well as take accountability for the execution of the plan and the outcomes.

Of course, the leader also has to demonstrate humility and be prepared to change the game plan if the results prove to be disappointing. Last, the leader has to show temperance. Wins should be celebrated. However, one of the pitfalls of leading change is to declare victory too soon. For example, in an interview, former U.S. president George W. Bush reflected on his speech aboard the USS Abra- ham Lincoln in which he announced an end to major combat operations in Iraq (Mooney, 2008):

They had a sign that said ‘Mission Accom- plished.’ It was a sign aimed at the sailors on the ship, but it conveyed a broader knowledge. To some it said, well, Bush thinks the war in Iraq is over, when I didn’t think that. But nonethe- less, it conveyed the wrong message.

The message that was sent to moms and dads was that their sons and daughters stationed in Iraq would be home soon. This did not prove to be the case for many families as the vast majority of deaths of U.S. military personnel occurred after the speech during the Iraqi insurgency. To many people, it appeared that Bush and his administration had been overconfident about the situation in Iraq. The mes- sage for organizational leaders is that they need to be aggressive in the objectives they set for the transformation yet demonstrate patience because it typically takes years before the new practices are firmly grounded in the organizational culture that is envisioned.

4.7. Consolidating gains and producing more change

Leaders accelerate the change plan to further in- crease momentum because doing so counters any continuing resistance to change by employees. The search for continuous improvement tackles the structure, systems, and people that obstruct the

full implementation of the change initiative. Leaders bring not only drive to consolidating gains and pro- ducing more change, but also transcendence. For example, Ted Rogers was the founder, president, and CEO of Rogers Communications Inc. He engaged in numerous initiatives to improve the company’s reputation for customer service. Rogers held the belief that every day you wake up, you have to improve, because “if we don’t change . . . [and] improve . . . [and] fix things, we’re going to be killed” (Avery, 2009). Leaders must launch multiple projects that help to drive the change deep in the organization.

4.8. Anchoring new approaches in the culture

The new values and the associated behavioral prac- tices must grow deep roots so that the change is sustainable. Change initiatives often fail because leaders underestimate the challenges of changing an organization’s culture to support the change. The culture, therefore, must be aligned with the change that is envisioned.

In 2007, Michael McCain, the CEO of Maple Leaf Foods, a Canadian food processing company, real- ized that the whole of his business needed a funda- mental restructuring if it was to be cost- competitive with U.S. competitors going forward. This meant closing low-volume, technically obso- lete plants; reorganizing distribution networks; closing or selling off business units that could never be turned into profitable and world-class opera- tions; and making many other tough decisions af- fecting employees, customers, shareholders, and other stakeholders.

To lead the change successfully required McCain to draw upon every one of the 11 dimensions of character:

1. Integrity to recognize what needed to be done and to report candidly on the progress to stake- holders through the long transformation peri- od;

2. Transcendence to visualize the end goal;

3. Drive to make it happen despite objections from a major shareholder;

4. Courage to pull the plug on business units that couldn’t be turned around and to invest virtu- ally all of his net worth in the transformation;

5. Humanity to do this while caring about, and taking steps to assist, the many employees who

Transformational change and leader character 247

would be losing their jobs as a result of the transformation;

6. Justice to recognize their claims on the organi- zation for past service and success;

7. Humility to go seek the very best business practices for leading a deep and comprehensive transformation;

8. Temperance to understand and accept that the transformation would take 5—7 years to com- plete;

9. Accountability to the shareholders for the re- sults of a long-term investment;

10. Collaboration with a large and diverse group of people and parties too numerous to list; and

11. Judgment to bring all these dimensions togeth- er into an effective, efficient, and principled change process.

In May 2016, McCain (2016) was finally able to declare that “our transformation, one of the largest in the North American food industry, is delivering the finan- cialgoalsthat wesetbackin 2010.”Arguably,without the breadth and depth of character displayed by McCain and his leadership team, the successful trans- formation would never have happened.

5. Judgment rules

We positioned judgment in the center of our frame- work because it plays a critical role in leader char- acter (Crossan et al., 2017; Crossan et al., 2016). Judgment is the character dimension that channels and melds the other dimensions into contextually informed behaviors. We need leaders with strong judgment that enables them to consciously or un- consciously activate each dimension of character at the right time and in the right amount, as well as to bring forth the right behaviors in the right situation at the right time. For example, leaders should not empower everyone–—there are many things to con- sider. They have to assess whether that power will be used in the furtherance of change or to subvert it; patience cannot be inexhaustible in the pursuit of change and hence sometimes bold action is required; it may not be possible to be fair and equitable to everyone in all changes; sometimes collegiality, open-mindedness, and striving for co- operation will hamper the change effort, especially when time is tight; and so forth. Leaders cannot

simply pick and choose which dimensions they want to embrace and which ones they want to ignore because each of the dimensions is essential to lead change effectively.

Kotter (1996) does not explicitly identify judg- ment but it permeates throughout his model. Suc- cessful transformational change requires real-time judgement. The leadership of the late Robert Ben- mosche is a good example (see Crossan et al. (2016) and Norton (2012)). Benmosche came out of retire- ment in August 2009 to head a company that was on the brink of disaster: American International Group (AIG). AIG, a globally entrenched business, was one of the ‘too-big-to-fail’ companies. Failure, many people thought, would bring the global financial system to its knees. The U.S. government approved a $182 billion bailout for AIG, in return for a 92% stake in the company.

Benmosche agreed to take the job, but only on his own terms. He was a man who had a roll-up-your- sleeves ethos. He was known for his willingness to say what was on his mind. He let it be known that if he encountered any obstacles from government officials, he would quit, and state publicly where the obstacles had arisen. He also made it clear that he was no diplomat. People observed that he “makes more enemies than friends because he does what needs to be done” (Norton, 2012). Yet, Jim Milstein, the former Chief Restructuring Officer of the U.S. Treasury department, opined that “Bob’s emotional intelligence is unrivaled. He is by no means short on analytical strengths, but he’s a very shrewd evaluator of people” (Norton, 2012, p. 15).

Benmosche’s first line of defense was to go on the offense, rallying the demoralized employees to once again take pride in the company. This was a risky tactic because, most likely, Washington ex- pected the new CEO of the humiliated company to be humble. But Benmosche knew that as long as people had their tails between their legs, AIG could not rebound. Thus, having made certain that he had a board chair who could be the resident diplomat–—Harvey Golub–—Benmosche was able to defend his company and his workforce aggressively.

Even as he was rebuilding morale, he was cutting costs dramatically. The payroll shrank from 97,000 to 57,000 employees. At Benmosche’s urging, his managers backed off the credit-default swaps that had caused the trainwreck and, drawing on the company’s enormous database and analytical skills, began designing new products that were profitable and sustainable. At the same time, AIG was under enormous pressure to liquidate holdings, the big- gest and most valuable of which was the Asia Life business. Golub was an advocate of hurrying divest- itures. Benmosche disagreed with this strategy. He

248 G.H. Seijts, J. Gandz

decided that an auction environment would reduce the liquidation values, and that the company had to demonstrate that it was in control and in no hurry. This visible point of conflict was a clear line in the sand: someone had to go. Golub resigned just a year into his chairmanship. Benmosche was firmly in control. The bottom line? By 2012, AIG had not only repaid the entire $182 billion in bailout money, but had also given the U.S. taxpayers a $22 billion profit on their loan to AIG. Benmosche stepped down in September 2014, and succumbed to cancer 4 months later.

Benmosche clearly had drive, humanity, integri- ty, justice, accountability, courage, and transcen- dence. For example, his candor was unparalleled even if, at times, he was exceptionally blunt. He fought for the employees and showed understand- ing and compassion for their struggles–—humanity. And in the realm of judgment, he showed incredible situational awareness and insight. He had strong powers of analysis, and was comfortable with com- plex cognitive issues. He was decisive yet showed temperance–—he made sound decisions in a timely manner. He had to show confidence yet remained humble throughout the transformation. In sum, Benmosche exercised effective judgment near the very heart of the catastrophe that threatened the global financial system.

6. Measuring and promoting leader character

How do leaders ensure not only that a specific change project is implemented but that the residual impact on the organization is a culture in which further changes are expected and widely wel- comed? In this respect, the character of change leaders is critical. Where leaders are perceived as having integrity, humility, humanity, temperance, justice, and collaboration, the chances are that those who might resist change will be encouraged to support the current change and will feel good about the change process in ways that will open themselves up to further change initiatives. If, on the other hand, leaders appear to be deceptive, unfair, inequitable, arrogant, disrespectful, and lacking in empathy or compassion to those for whom change is painful, they will raise the bar of hostility toward future change even if the current one is successful. In an era in which change is the new normal, it is the character of leaders that will create a supportive change culture that will con- tribute to organizational success and sustainability.

Beyond that, however, we think there is a gath- ering body of evidence to suggest that leader char-

acter is something that can be assessed and evaluated in current and potential leaders and hence should be taken into account in decisions about how organizations develop and deploy lead- ership talent. For example, the senior leaders in an organization play a critical role in promoting the development of leader character in next generation leaders. They should actively model those charac- ter dimensions and elements they want to see more of throughout the organization. Any character- associated behaviors enacted by the senior leaders tend to be perceived by others as the behaviors that are valued in the organization. This may, in particular, be applicable to those individuals early in their careers (Seijts, 2014). Bandura’s (1997) social cognitive theory explains that behavior is learned from the environment through the process- es of observation and imitation. For example, George Cope, president and CEO of Bell Canada Enterprises stated (Seijts, 2014, p. 351):

I was 25 years old then and overnight became president of a subsidiary of Bell. I learned how boards operate and closely watched the behav- ior of people in leadership roles. I gained valu- able insights into the business world and leadership concepts at a really young age. This was an important learning experience.

Senior leaders can also coach and mentor individu- als on the leader character dimensions and ele- ments. For example, they ought to coach individuals when they encounter teachable mo- ments or crucible experiences so that the lessons embedded in these experiences are not lost on individuals. A character dimension that is challeng- ing for many leaders is temperance. Individuals have to be able to demonstrate self-control, pa- tience, and restraint. They need to learn that every decision has a clock on it–—5 seconds or 1 day or 6 months. Senior leaders can teach individuals that at times, it is more effective to pull people into a conversation rather than to push the change on them. Such coaching and mentoring requires signif- icant dedication–—for example, time and financial resources to send individuals to leadership devel- opment–—on the part of senior leaders.

Furthermore, senior leaders can assign individu- als challenges that require them to display one or more leader character dimensions to successfully complete the assignment. For example, putting individuals in charge of leading the implementation of an organization-wide information technology sys- tem or leading a departmental turnaround provides significant opportunities for them to develop the requisite competencies and character-related be- haviors. The development of character dimensions

Transformational change and leader character 249

such as drive, collaboration, humanity, temper- ance, courage, and accountability may be crucial to the effectiveness of the leader and the success of the change initiative.

Most importantly, senior leaders can make ex- plicit in the role-requirements for leadership posi- tions the character dimensions they want leaders to demonstrate (e.g., through the development of leadership profiles) and actually hire and promote individuals who demonstrate the leader character dimensions and elements associated with leading deep and comprehensive change (e.g., Seijts, Crossan, & Carleton, 2017). Part of this process is to discuss with the candidates the character- associated behaviors leaders expect to see in the role. This requires senior leaders to elevate char- acter in importance alongside competencies. In our experience, it is relatively rare for senior leaders to discuss character dimensions and supporting elements they expect to see in the successful can- didate as well as to focus on character deficiencies when reviewing on-the-job performance. There are many potential explanations for the absence of such character-related conversations in the workplace. Leaders may feel they lack the vocabu- lary to have constructive discussions. The research we conducted offers a specific vocabulary that allows leaders to have developmental leadership conversations in the workplace and to infuse leader character into HR systems and processes to enable excellence in the workplace.

References

Avery, S. (2009, May 29). For Rogers’ CEO, happy customers top of list. Globe and Mail. Available at http://www. theglobeandmail.com/globe-investor/ for-rogers-ceo-happy-customers-top-of-list/article1202176/

Bandura, A. (1997). Self-efficacy: The exercise of control. New York, NY: Freeman.

Bright, D. S., Cameron, K. S., & Caza, A. (2006). The amplifying and buffering effects of virtuousness in downsized organiza- tions. Journal of Business Ethics, 64(3), 249—269.

Crossan, M., Byrne, A., Seijts, G., Reno, M., Monzani, L., & Gandz, J. (2017). Toward a framework of leader character in organizations. Journal of Management Studies, 54(7), 986—1018.

Crossan, M., Seijts, G., & Gandz, J. (2016). Developing leader- ship character. New York, NY: Routledge Publishing.

Galbraith, S. (2011, October 24). Meg Whitman takes charge to help HP find its way. Fortune. Available at http://www. forbes.com/sites/sashagalbraith/2011/10/24/ meg-whitman-takes-charge-to-help-hp-find-its-way/ #3077db841897

Gandz, J. (2009). Compelling visions: Content, context, credi- bility, and collaboration. Ivey Business Journal. Available at http://iveybusinessjournal.com/publication/ compelling-visions-content-context-credibility- and-collaboration/

Gandz, J., Crossan, M., Seijts, G., & Stephenson, C. (2010). Leadership on trial: A manifesto for leadership develop- ment. London, ON: The Richard Ivey School of Business.

Gilley, A., Gilley, J. W., & McMillan, H. S. (2009). Organizational change: Motivation, communication, and leadership effective- ness. Performance Improvement Quarterly, 21(4), 75—94.

Kotter, J. P. (1996). Leading change. Boston, MA: Harvard Busi- ness Review Press.

Martinez, A. C. (2001). The hard road to the softer side: Lessons from the transformation of Sears. New York, NY: Crown Business.

McCain, M. H. (2016, May 6). Building a sustainable future. Available at http://www.mapleleaffoods.com/ mapleleafview/112431/

Mooney, A. (2008). Bush: ‘Mission accomplished’ a mistake. CNN. Available at http://www.cnn.com/2008/POLITICS/ 11/12/bush.regrets/index.html?_s=PM:POLITICS

Norton, L. P. (2012, August 11). The man who saved AIG. Bar- ron’s. Available at http://www.barrons.com/articles/ SB50001424053111904239304577575214205090528

Seijts, G. (2014). Good leaders learn: Lessons from lifetimes of leadership. New York, NY: Routledge Publishing.

Seijts, G., Crossan, M., & Carleton, E. (2017). Embedding leader character into HR practices to achieve sustained excellence. Organizational Dynamics, 46(1), 30—39.

Seijts, G., & Roberts, M. (2011). The impact of employee per- ceptions on change in a municipal government. Leadership and Organization Development Journal, 32(2), 190—213.

Sosik, J. J., Gentry, W. A., & Chun, J. U. (2012). The value of virtue in the upper echelons: A multisource examination of executive character strengths and performance. Leadership Quarterly, 23(3), 367—382.

Watson, T. (2014). The Ivey interview: Steintho’r Pa’lsson. Ivey Business Journal. Available at http://iveybusinessjournal. com/publication/the-ivey-interview-steinthor-palsson/

Wolf, G. (1996). Steve Jobs: The next insanely great thing. Wired. Available at https://www.wired.com/1996/02/ jobs-2/

Zetlin, M. (2015). Steve Jobs was a master at looking into the future: You can be too. Inc. Available at http://www.inc. com/minda-zetlin/steve-jobs-was-a-master-at-looking- into-the-future-you-can-be-too.html