Human Capital

Many employees in companies across the country do not feel very engaged in the work they do.  As a result, they don’t feel inspired to do their best, and they do not provide the most value possible to the companies they work for.  Fred Kiel argues in his book Return on Character that this is because employees know when they are truly being treated with respect and when they are simply being treated as “human capital”.

 

Kiel’s book focuses on morals, ethics, and how leaders who display strong moral character habits shape the companies they oversee. By creating teams that match their values and support their moral goals, a company’s top leaders can create a system that better engages the workforce. When describing a common feature of workforces that engage their employees, Kiel writes, “They treat their employees with respect.  Employees experience the culture as one that cares for them as people—where they are not treated as “human capital.”” What he is showing is that those who we expect to work for us and provide value for us need to know that they are valuable as human beings and individuals, and they need to feel a sense of purpose and appreciation from their leaders.

 

When a leadership team or a supervisory team does not expand respect to all levels of the workforce, then the work that each individual does will not become a sense of pride and will suffer.  The employees become disengaged causing productivity and quality to diminish.  If a leadership team broadcasts strong moral values and guides supervisory teams to truly respect and value their employees as more than warm bodies, then the employees can develop meaningful relationships with their leadership and with each other. These relationships will stem from respect and encourage everyone, not just the employees but management level workers as well, to commit to their work to maximize their potential.
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Organizational Structure

In his book Return on Character author Fred Kiel addresses ways in which a business leader’s strong moral character can boost the bottom  line for the company they work for, and how their strong moral character can have a meaningful and positive impact on the lives of the employees working for them.  Part of the way that strong character can translate into a more engaged and fulfilled workforce and a better bottom line is through an organizational structure which supports the employees of the company, and helps them do their best work with the ethos of their virtuoso CEO. A strong structure can help guide a company by allowing everyone involved to act in a morally defined manner, helping everyone do better work.  Kiel sets up the idea that a great business structure depends on a strong moral ethos developed by the leadership team and the CEO:

 

“Even an ideal structure offers no guarantee that the dynamics will be positive, harmonious, and energized.  As the ROC [Return on Character] data revealed, this is where the character habits of the executive team come into play.”

 

Kiel is explaining that an efficient organizational structure within the business is not enough for great business success.  His argument is that CEOs need to develop moral habits and characteristics that help build people up by treating them as more than just extra hands on deck.  When the CEO is able to truly live through this idea and create and shape a leadership team that can spread this idea, then everyone within the company will be taken care of, and they will feel as though they work in an environment where people truly care about them and want to help them do their best work.

 

The opposite end of this scale would be a self focused CEO who displays character habits of a dog-eat-dog, success hungry individual. This type of character will show that what is most important is personal growth, even at the expensive of others. They likely will not develop strong leadership teams that can put the interests and goals of employees at the same level of importance as their own. As a result, employees feel disconnected and have no reason to demonstrate strong moral habits within their own work.

 

By voicing, living up to, and building a leadership team that is focused on strong moral goals, a CEO can create a structure in which all actors of the company are able to make positive moral decisions and feel encouraged to do their best work.  The strong moral values of the company will be reflected beyond the work space and into the world in which the company provides value to those with whom they serve.  Reinforcing this structure and maintaining it requires more than just a keen eye for efficiency, and requires a true respect for human beings.

Expectations and Boundaries

Fred Kiel addresses the importance of leaders and how they transmit their values and beliefs throughout their leadership teams in his book Return on Character.  He explains that it is important for leaders to hold strong moral values and principles, but he also explains the importance of leaders sharing those values and building them into the ethos of a company in a way that is clear and concise, and easy to connect with for everyone in the company.

 

Kiel explains the importance of leaders being able to clearly communicate their values and expectations in the following quote, “While most people are well intentioned, they also need to have clarity about expectations and boundaries.  If a leader claims that “integrity is the cornerstone of our culture” but fails to spell out exactly what that means in practice, then the claim has little weight or purpose.” What this shows that we must take lofty ideas and connect them back to the basic and every day actions of those within our teams.  Connecting the core values back to the basic process of every employee becomes vital so that the culture and the key values that the leader wants to develop within an organization can manifest in everything that a team does.  Having a leader who can demonstrate how those core values relate fit in with the business can help an organization in a trickle down manner.  The CEO can build those values into the decisions and actions of his leadership team, who can distill those values in practical manners to management levels throughout the company, and those team managers can build those values into the actions of those who they guide and work with.

 

While explaining this process Kiel admits that rules and core values do not fit nicely into a black and white dichotomy, but that there are wide gray areas. He argues that developing character throughout the company will help leaders make decisions that better align with the core values of the company when situations fall within these gray areas.  Having leadership and management teams that display character habits that are in line with the companies core values can help everyone from the CEO to the newest employee understand what is expected and how to act in a way that bolsters the company’s core values as opposed to feigning to adhere to company values.

Confirmation Bias: A Hindrance to Quality Decision Making

Fred Kiel addresses his ideas about disciplined decision making processes in his book Return on Character which focuses on the ways in which leaders with strong moral character make greater impacts on the companies they lead than do leaders with weak moral character.  Part of Kiel’s idea regarding these strong moral leaders is that they have worked on processes of self reflection, and they are able to control the quick emotional side of their brain in favor of the slow, deliberate, and rational part of their brain.  By understanding that their immediate reaction may provide valuable intuitions and by slowing down their decision making process to use reason over emotion, these leaders can make better decisions that help improve the lives of everyone, not just themselves.

 

While discussing this decision making process Kiel also mentions the idea of confirmation bias. He hits briefly on the idea that we find information that confirms thoughts and ideas that we had already developed which in our mind proves our thoughts correct.  Rather than seeking information that challenges our preconceived notions, we look for news stories, data points, and other people who see things the same way.  When we succumb to confirmation bias we begin to build a capsule of likeminded individuals around us that shields us from opposing thoughts and ideas.  The danger here is that our ideas could be wrong, impractical, morally shallow, or just not as advantageous for growth and progress as we think they are.  If we can become comfortable with shifting perspectives and learn to discuss other view points, then we will become a more well-rounded individual.

 

By striving to avoid confirmation bias leaders can make better decisions and be more connected to their employees, customers, and competition.  They can become more adaptive and better predict how the world in which they operate will change, giving them an advantage in moving forward. When leaders succumb to confirmation bias they have only one option for success, and if it does not pan out they will not have the flexibility and varying perspectives to turn the situation around.

 

When we incorporate multiple perspectives we can actually better develop our own perspective.  We can begin to add new parts and pieces to our ideas helping them become more robust.  The goal of finding new perspectives should not be to stockpile our own ammunition against those perspectives, but to better understand why others see the world in those differing manners so that we can better connect with them and better adapt to suite not just our own needs, but everyones.  To truly avoid confirmation bias you must seek out other information which conflicts with your thoughts, and you must digest that information from multiple perspectives.

Mental Complexity

“The term mental complexity refers to our ability to perceive the subtle nuances that separate similar ideas, issues, and events in the world around us—the gray areas that replace the strictly black-and-white understandings of the world that most of us have when we’er young.” Fred Kiel uses this quote to introduce us to the ways in which he believes great leaders think about the world.  For Kiel, a strong leader needs to have well developed moral ideas, an evolving and profound sense of self-awareness, and an ability to think of others as much as they think of themselves.  By introducing the idea of mental complexity Kiel is able to show how thorough our leaders’ though processes should be. They cannot adhere to simplistic guidelines or principles and they cannot apply blanket statements to all facets of life when so much of what happens in our life takes on a new meaning when you shift your perspective.

 

Kiel quotes psychologist Robert Kegan  and his idea of the self-transforming mind to continue his thoughts on mental complexity, “According to Kegan, the self-transforming mind is continually aware of not knowing everything—of understanding that every worldview is incomplete and that we can never know everything there is to know about anything.” This quote fits with Kiel’s idea of living life in more of a gray are as opposed to living in a dichotomy.  Life in this way can be frustrating and sometimes clouded, but learning to better think through the events and ideas surrounding us will allow us to live more dynamically and open to changes.  Rather than shutting anyone or any event out of our lives we can adjust to situations and people as situations change. Understanding that we all approach the world from our own perspectives and being able to see that we will not all thrive by approaching life from the same angle will give us a better grasp on how to create real progress in not just our own lives, but in the lives of those around us as well. Kiel argues that this is a necessary quality for a strong business leader because so often our leaders are faced with decisions that have many implications and conflicting interests for various groups of people such as shareholders, employees, local communities, and global customers. By thinking dynamically a leader with a strong moral backbone can help navigate these decisions in a way that will add value to the lives of more people than just those in the boardroom.

 

In the United States I think we do a particularly poor job of approaching the world with the type of mindset that Kiel describes.  In our politics we have seen our two major parties diverge from moderate and centrist ideas to become more extreme and more polarized, and I think a big part of this shift has to do with a lack of developing mental complexity in our world views’.  For some reason our country highly values strong and unwavering view points on everything from abortion, taxes, sports teams, and music. We have begun using our preferences for seemingly minor parts of our lives as cornerstone concepts of our identities, and this has pushed us to a place where we understand the world through dichotomies. Rather than living in the black and white and doing our best to think through and understand various points of view, we have tied ourselves to specific though processes on which we lean on to create our identity.  This is dangerous because it limits our ability to see nuances in thought processes, and it creates winners and losers in areas that cannot simply reduced to good or bad. When a leader, political or in business, ties themselves to a set identity and refuses to think of the world through multiple perspectives, they risk alienating others and preventing growth by failing to truly understand the choices available to them.