Risk, Character & New Year Resolutions

Posted on | January 15, 2010 | 3 Comments

Happy New Year 2010 It’s January 2010. Welcome to the second decade of the third millennium!

To those of you who made New Year resolutions this year, good wishes and good luck achieving your goals. Given that only two weeks has passed since we sang Auld Lang Syne, I trust you still are keeping diligently to all the pledges you made. If you are, great. But do you have what it takes to make these promises come true? Many, dare I say most, don’t. And the reasons why may surprise you.

What’s The Relationship of Resolutions to Business?

Let me suggest to you that there is an important relationship between New Year’s resolutions and business. What links the two is: Character.

Character is a multifaceted window that allows observers a glimpse into a person’s psychology and motivation and you can learn much about the strength or weakness of a person’s character from how they deal with making commitments, not matter if they are trivial, personal ones, or important business ones. Such knowledge is really important and helpful when deciding who deserves to be on your company’s management team and who does not. And I for one think that character, particularly when companies are looking for new executive talent, is something that is too little considered in new hire decisions.

The character a person shows in respect of making and honouring commitments gives great insight into that person’s integrity, something that is a really important quality for everyone in management, from ownership on down first line supervisors.

Why is Character Really Important In Business

New Year Resolution - Dont Get Caught Jim Collins’ best-selling book Good to Great is one of the most important, successful and respected business books of the last ten years. It’s first two chapter deal with critical human resource issues. Chapter one describes how companies can go about ‘Getting the Right Leader’ and chapter two describes how companies can go about “Getting the Right People on the Bus.”

Collins’s point in these sections is that if your company hopes to go from good to great, you better have to have the the right type of leader ‘driving the bus’ and the right people “on the bus”. And in his view, finding the “right people” is rare, so you best look diligently for and hire the right people as your first priority and then figure out where to put them once you have them ‘on board your bus’.

As to how to identify the “right people,” Collins writes about the importance of gauging a person’s character. And he declares that, in hiring a person for your company, character should be considered more important than experience, education and qualifications. He advocates that no matter how qualified a person is in terms of experience, credentials, or knowledge, if they have a character deficiency, such as dishonesty or a lack of integrity, don’t hire them.

What Really is Character?

The acclaimed Greek philosopher Aristotle gave us the following profoundly simple description of character: “character is how we act when no one is looking.”.

The Good The Bad and The Ugly Character is that inner essence of us as a person that determines what we believe and importantly how we behave and will behave. One can have good character or bad character. When a company hires an employee and gives him or her responsibility, authority and access to confidential and private information, the company needs to have absolute trust in this person’s character. The company really requires as much assurance as possible that this person will have the company’s best interests at heart, even when no one is around looking at what they are doing or when no one dares question what they do. The higher the person is in the company, the more critical this issue is.

The legendary US football coach Vince Lombardi knew that many athletes have similar athletic skills — most of them are tough, strong and fast and athletically gifted, but not all of them would be winners. What separates a winner from the rest of the pack, Lombardi taught, is character. “For it is character that is the difference,” he once said. In management, the same principle applies – when times are tough in business, it is character that separates the winners from the rest of the pack – character composed of perseverance, honesty, integrity and an absolute rock-solid commitment to doing what’s right and needed in order to achieve ultimate success.

The ancient Greeks had the idea that character is formed very early in life and for the most part people’s actions will always be consistent and in keeping with their character. Thus, if we can identify a person’s character, we can predict with a reasonable degree of accuracy how a person will react under any given set of circumstances. For example, a brave person will be courageous, an honorable person will act honorably, an appreciative person will be grateful, a loyal person will be faithful, a dependable person will be reliable; and . . . a liar will lie, a thief will steal, a selfish person will be ungrateful, an angry person will lose his temper and a person who lacks integrity will be duplicitous. These are all character issues, which is why there is much truth in Greek philosopher Heraclitus saying, “A person’s character is his fate.”

Judging The Character of Potential New Hires

When considering candidates for employment, the 3 areas where management can best measure an applicant’s potential suitability for employment are:

Past Performance – The best predictor we have of a person’s future performance is their past performance. If they have been successful on the job in the past, the odds are pretty good that he or she will be successful in the future if the new job and the circumstances stay much the same as the old. Similarly, if a person has had a checkered past at work, the odds for future success in your company will be very low. As Shakespeare had Antonio tell us in The Tempest, “. . . what’s past is prologue.”

Working Style – Management experts recognize there are 4 principal working styles or temperaments. Most of us use two in combination where we have one dominant style and a second less dominant style.

Driving/Ambitious: focused, goal-oriented types energized and motivated by accomplishment and achievement (can be either the classic hard charging ‘Type A’ personalities or the less bombastic but often more successful quieter types); these are often those who found in top management.
Happy/Social: motivated and energized by being around other people, often found in customer relations, patient care and sales.
Inhibited/Restrained: motivated and energized by “getting along” with others on the job and being highly dependable, often found in lower level management.
Thoughtful/Considered: motivated and energized by “getting it right,” often found in jobs requiring close attention to detail, such as information management, accounting, finance and many medical positions.

Identifying the primary and secondary working styles of the candidate under consideration will help you better fit a person to the position open and help you predict the odds of future success on the job.

Character – Of the 3 personal dimensions discussed here, character can be the toughest one to measure. This is because it takes time to discover it.. While you can find out about past performance through background checks, and you can identify working style through psychological profiling, discerning character requires a certain keenness of judgment which we mostly exercise through observation, experience and being open to the opinions of others who know the person. For example, a recommendation from a person that you respect and admire could carry great weight, and your own personal knowledge of a person’s background or your observations of their behaviour can be very incisive. A word of encouragement here. As with cows and leopards, a person’s ‘spots’ don’t change. Character is something that is deeply ingrained, so if you find something of disturbing, don’t dismiss your concerns. It is better you avoid a making bad hire for the costs of those can really be high if you make the wrong new hire or promotion up the ladder call.

Judging Character of Those Already on the Payroll

When someone is already on board, you have lots more opportunities to judge their character if you pay attention and have a sense of what to look for.

Here is an example of what to look for that comes from the Pat Morely book The Man in the Mirror. A business traveler on an airplane orders a $2.00 drink and the waitress, who was very busy, tells the traveler to leave the money on the tray and she will come back to pick it up later. Minutes pass, and it becomes obvious that the hostess has forgotten, so the traveler quietly picks up his money when no one is looking or notices and puts it back in his wallet. What’s the result? The business traveler has just shown their lack of integrity in stealing the $2.00 they owed rightfully to the waitress and the airline. Is that the type of person who you should promote or even keep on your payroll?

New Year resolutions can provide another opportunity to gauge employee character, and judging that should be a part of your human resource management policy.

Keeping to Resolutions is Tougher than Making Them

Commitment Do you know that in the January 2010 edition of the Report on Business Magazine they report how a year ago more than 60% of Canadians resolved to diet and exercise more in 2009? These statistics come from a poll done by Angus Reid. That is a big number but it should not surprise you because apparently the same proportion of urban Canadians are overweight or obese. However, what is surprising is that the survey found those same people made the same vow on at least three previous occasions. Presumably they did not do this because they were looking to achieve more success. No, what these repetitive resolutions likely reflect is the habitual failures in goal accomplishment in all previous attempts made.

Why People Often Fail Keeping to Their Resolutions

In descending order of concern, there are 6 reasons why people fail to keep their commitments, and all have character implications:

No commitment
No effort
No perseverance
Ill considered objective
Lack of support or cooperation from others
Unfortunate or uncooperative circumstances

What you really want to be on the look out for is trying to catch employees who deal with commitments using any one or all of first 3 approaches. Because character traits are pervasive and rarely change no matter if the issue at hand is significant or seemingly trivial, watch out for those who make or made New Year resolutions. Consider the why, how and with-how-much-ongoing-commitment-and-effort those resolutions were made. It can be revealing and very insightful into the resolution maker’s character.

The 3 Things Needed to Be A Successful Resolution Maker

Your typical New Year resolution (when you make a promise to yourself and/or others) is one of the most difficult things to successfully deliver on. If you don’t believe me, just ask any fitness gym operator. They will tell you how yearly memberships sold in early January are consistently the most profitable because they get least used.

To be a successful New Year resolution maker takes 3 things:

Commitment
Effort, and
Self-control

It turns out that item number 2 ‘effort’ is, not surprisingly, the most important. Here’s why.

Most sane, respectful, and reasonably rational people don’t go making any commitment to themselves or to others if they know they have little or no expectation of success or even intention or ability to follow through. So, commitments made by those with integrity are hugely dependent on the person’s perception of their ability to make the required effort and exercise the required self-control necessary for success. And exercising the required self-control is relatively easy when a person makes an effort. Which is why resolutions, like all business performance commitments, really rest on the strength the person’s effort expended to achieve the goal. What is surprising is what it takes for people to make the require effort.

Resolution Success or Failure: How to Gauge It Ahead of Time

It turns out that applying reverse logic is the best way to gauge ahead of time who is more likely to be a resolution maker success or failure, and you can use this approach in business situations too. Let me explain.

Tasks that are easy to achieve, or outcomes relatively certain to happen, do not require special commitments like resolutions to be made in order to be accomplished. That is why those that do make a New Year resolution, or give their boss or coworkers an important commitment in business, all know full well they are dealing with an uncertain outcome situation.

A recent study, published in the journal Psychological Science, found that those who have an inflated sense of impulse control are more likely to expose themselves to their temptations and ultimately fall into the trap of giving in to those temptations. Which is why, surprisingly, it is better to trust those who show some doubt or uncertainly about achieving their goals because they are much more likely to make the required effort to accomplish their goals. And those who show high or unusual confidence about achieving positive, optimistic outcomes are really just demonstrating (a) how reckless they likely will be for they do not recognize or respect the potential risks of failure involved and (b) how lacking in commitment they are for they are unlikely to think they need to exercise the self control necessary to ensure they do what is and will be required to achieve success.

Beware the Over Confident

Confidence Consequently, whether you are considering how someone deals with their New Year resolutions or how they deal or will deal with their business commitments, beware the unusually or unreasonably confident.

Just as you have been warned to steer clear of shady types who promise you a free lunch or offer you a deal too good to be true, don’t fall for those of suspect character with unreasonable (unwarranted) confidence. Better you choose someone who recognizes the need for some reasonable caution and has an appreciation of the uncertainly faced. What the over-confident others are telling you if you care to critically listen is how they don’t really respect the task they faced, the uncertainty inherent in achieving the outcome needed or how others have a reasonable need to have their expectations responsibly managed. To my mind, that makes people like that no-go candidates for being on your team.

Recommendation

So, given all of the above and how we’re now into a New Year and a New Decade, I propose we resolve to emphasize the importance of developing, maintaining and promoting those of good character in our personal lives and within our companies, at least until the 2020’s come along. I’m sure we’ll all be better off of it if we do.

Related Articles:

Think you have self-control to keep resolutions? Then you won’t

How to Make a New Year’s Resolution

The Importance of Keeping Your New Year Resolutions

The Importance of Character in Employment

© Blog.TonyJohnston.biz & Compass North Inc. 2009

Article by –

Tony Johnston, CMC, CGA, MBA, BA (Econ)
President
Compass North Inc.
18 Balding Court
Toronto ON
M2P 1Y7
Office: 416-342-5652
Mobile: 416-346-4140
www.CompassNorthInc.com
www.CNiRapidResearch.com

Tony Johnston is a business results specialist, top level executive and management advisor. Having successfully led 4 turnarounds and with many significant operations, deal making and finance oriented accomplishments to his credit, Tony helps companies drive:

› top line growth (revenue)
› bottom line improvement (profits)
› cashflow management (credit line control)
› growth strategy (more / new)
› financing & stakeholder relationship management (debt / equity)
› enterprise value maximization (mkt price)
› acquisition planning & execution (find / close)
› divestiture preparation & execution (prep / negotiate)
› information gathering (competitive intel / market research)
› crisis control (turnarounds & wind-downs)
› enterprise leadership (CEO / CRO / CFO)

Compass North Inc. is a management & advisory services firm that helps companies achieve important, challenging operational, financial and transaction oriented goals. Examples of what we do include helping companies and their owners:

– make better decisions by providing customized competitive intelligence,
– grow by crafting strategic plans and implement them,
– get turned around by dealing with their debt or other business problems,
– borrow more money and/or raise more equity, and
– plan, prepare, negotiate and close acquisitions, divestitures and ownership
transitions.

Bottom-line: The benefit that Tony and Compass North Inc. deliver is helping company owners maximize both what they earn while they own their business and what they bank when they sell.

> Follow me on Twitter @CompassNorthInc

Comments

3 Responses to “Risk, Character & New Year Resolutions”

BizSugar.com
January 15th, 2010 @ 1:44 am

Risk, Character & New Year Resolutions | Biz Money Matters |…

Like business commitments, the making and keeping of New Year resolutions is a test of character. This is something too little appreciated today. But it shouldn’t be if you want your company to be great. Read why….
Tony
January 19th, 2010 @ 6:55 am

Great analysis and advice on the importance of character in the work envionment…as well as social! This is especially valid for our organisation where everyone works from different locations around the globe…the avoidance of doubt is essential and the need to identify sound character types is critical.
Well done and thanks for a very interesting read. Best regards,
Tony Tesar
Tony Johnston
January 19th, 2010 @ 10:35 pm

Tony,

Thank you for your comment. I am really pleased to hear you found value in my article and I hope it helps you and your company do better business, which is and has been my whole intent behind my blogging.

Cheers & Best Wishes for Much Success,

Tony Johnston

September 2010
M	T	W	T	F	S	S
« Apr
	1	2	3	4	5
6	7	8	9	10	11	12
13	14	15	16	17	18	19
20	21	22	23	24	25	26
27	28	29	30

Posts by:

Tony Johnston
President
Compass North Inc.

Tony provides executive management and advisory services that help companies get MORE !!

sales / profits / cashflow
financing / exit valuation

Tony delivers the leadership or leadership support needed that can make remarkably outstanding results happen operationally, economically, financially and in the eyes of customers, lenders & transaction counterparties.

If you are a decision maker in a company that wants MORE, give him a call at 416-342-5652 or check out the Compass North Inc website [click here].

Tony's ability to help companies achieve important/challenging goals is well demonstrated by his long record of success, which includes:
- 4 successful turnarounds lead
- $66 mil+ increase public
  company's value
- $34 mil value harvested
  from biotech cofounded & lead
  as CEO
- $12 mil/3x investment gain
  in 2 years delivered for
  VC partners
- $2.5+ bil in public & private
  market debt, equity and
  M&A deals done
- 1 successful company IPO
- 4 new businesses organized &
  grown: Biotech; Securitization /
  Mortgage Servicing; Third-Party
  Logistics (3PL); & Consulting