The Character of a Leader and Organizational Success in the Age of Complexity

It is very common to hear that character is an essential attribute of a leader. An affirmation invoked with so much surety in both professional and personal settings. However, when we ask anybody about the meaning of this virtue, people deflect their responses to specific personality trades and, normally, these answers normally follow particular beliefs of an idealized world. Because of this ambiguity, it is not surprising to see a vast amount of management articles about ethics, moral issues and the enhancement of personality traits in the workplace, yet character seems to be somehow a neglected topic, especially in contemporary business literature.

Debates to come up with a formal definition of character have existed since Aristotle’s times, and are still ongoing. However, we need not to engage in a deep philosophical debate to define the character of a leader in an organizational context.

In practical terms, we can define character as the level of adherence to one’s personal values when making decisions and interacting with the context. From a leader’s perspective, it is the standard he/she will be judged against when responding to a specific situation. Modern research [1] defines character in a leader as a set of attributes that include:

• Respectfulness

• Fairness

• Cooperation

• Compassion

• Spiritual respect

• Humility

• Courage

• Passion

• Wisdom

• Competence

• Self-discipline

• Loyalty

• Selflessness

• Integrity and

• Honesty

This is quite a lengthy list of attributes for a concept considered commonly understood (and the list is far from being complete!). On the other hand, the turbulent, competitive and changing nature of modern business environments obligate leaders to react quickly and, most of the time, with partial information. Unavoidably, these unique situations will expose some of his/her attributes that, as expected, will only be reflected in the results of his/her decisions.

“Complexity in modern economies permanently test a leader’s character…

In traditional, production-based economies of the industrial era. Managerial and governance systems are standardized and authority is mostly centralized. Success is normally the result of a linear relationship between inputs and outputs. In these controlled environments, emergence is rare and there are not a lot of situations that require the testing of a leader’s character.

On the other hand, we are currently living in are knowledge-based era that is complex in nature. With the advancement of technology, a myriad of variables constantly materialize in the form of emerging information, uncertainty and fast-paced, turbulent economies. All this set the pace of competition, collaboration and decision-making and creates an immense potential for the erosion of a leader’s character; the need for rapid adaptation to survive in modern settings makes challenging the reconciliation of actions and values.

Modern organizations are in essence network-based adaptive systems in permanent transformation and expansion, and contemporary business environments offer plenty of opportunities for the manipulation of information and actions. Furthermore, the expansion of boundaries (e.g. geography, digital settings) makes it more difficult to distinguish what is ethical and what is legal. From Enron and WorldCom in the 2000s to Wells Fargo and Volkswagen in the last few years, a myriad of examples presented situations where leaders’ characters failed in multiple forms, from information and influence peddling to the artificial manipulation of social systems.

In a knowledge-creation era, with numerous choices and adaptation modes, organizational subsistence require unique solutions. This challenges, and some times invalidates, formal organizational structures in a similar way new strains of a virus compromise the effectiveness of a new vaccine. Furthermore, formal organizational systems normally do not foster internal dissemination of innovation. Instead, they tend to inhibit them. New ideas require leaders to champion actions that would most likely challenge existing paradigms. Often, leaders face situations that require unconventional approaches, such as enacting the use of informal networks and exerting social and/or political efforts, in order to effectively manage conflicts and enhance competitiveness. In these situations, only a strong adherence to personal convictions will enable leaders to successfully overcome these challenges in a sustainable and ethical manner.

… but organizational culture can calibrate the personal traits of a leader.”

In today’s economy, organizations evolve through iterative and spontaneous interactions of individuals. These processes occur at local levels and induce mutual adaptation [2]. On the other hand, leaders must make fast decisions in uncertainty, with incomplete information and, at the same time, demonstrate adherence to “good business practices”. As a result, it is not difficult to see that the strategic growth and sustainability of organizations strongly depends on the characters of their leaders. Knowing that character is intrinsic to each person, how can we then enhance and, ultimately, capitalize on a leader’s attributes to ensure a successful growth of a corporation? The answer lies within the organizational culture.

The culture of an organization frames the behaviour of the leaders and sets the way to do business by establishing rules of collaboration, competition and capabilities cultivation, in both internal and external contexts. It is important to highlight that organizational design, defined as the set of parameters to create accountabilities and drive personal interactions, is a crucial element for success: in essence, the structure and processes in a organization are the vehicles to disseminate the organizational culture. Evidently, organizational design is unique to each corporation, and will be based on the economic realm the organization operates in.

The robust definition and successful deployment of the culture in an organization is a crucial element for sustainability, especially in today’s business environments. A solid organizational culture will set self-reinforcing set self-defence parameters that enhance the effectiveness of the organization and protects it in the presence of internal and external threats respectively. This calibrates the way a leader reacts in critical situations, when individual traits will naturally emerge to address situations and solve problems. It is precisely within the leader’s problem-solving strategies, actions and behaviours where values become visible and the adequacy of his/her decisions is tested. As a result, in environments of high uncertainty and rapid change, a leader’s character and decision-making process are critical elements that set the course and existence of the organization.

“Without a sign, his sword the brave man draws, and asks no omen, but his country's cause”

Homer

Notes:

[1] Cooper, Sarros, J. and Sattora J. (2007) The Character of Leadership [Online] Available at: https://iveybusinessjournal.com/publication/the-character-of-leadership/

[2] Tain, D. (2021) "Capitalizing on Complexity in Modern Business Environments: A Network-Based Approach for Projects and Organizations", Journal of Applied Business and Economics, 23(1), pp. 29-41

Available at: https://www.septentrionglobal.com/post/technical-paper-capitalizing-on-complexity-in-modern-business-environments