The promise of elevating character alongside competence in organizations is significant, as Fred Kiel highlighted in his 2015 book “Return on Character,” and my colleagues and I discussed in our 2022 MIT Sloan Management Review article “Make Leader Character Your Competitive Edge.” However, few people recognize that character can be a double-edged sword, serving as either a competitive edge or a strategic liability. Five factors can make the difference.
Diagnosing Character In Success And Failure
Following the 2008 Global Financial Crisis (GFC), my colleagues Gerard Seijts, Jeffrey Gandz, and I conducted focus groups with executives worldwide to identify overlooked leadership failures, as detailed in our 2009 book, “Leadership on Trial.” Leaders cited character flaws, not competence, as key to the crisis, often believing highly skilled individuals with questionable character made poor judgments. However, there were different opinions about what character was, whether it could be developed, how it influenced success and failure, and how systems promoted flawed character.
Although diagnosing character’s influence in failure is essential, it is also critical to understand its role in success. Too often, the story reduces to a single leader as a heroic figure, with little insight into their true character. In our character workshops, we use many examples from the movie Invictus, which helps to reveal Nelson Mandela’s leadership character. His strength of character and ability to influence others are clearly visible; however, history shows that these effects are not enduring. His story is not unique. The success of many organizations is overly dependent on a few key people, with little understanding of how their character strengths can be replicated within the organization and sustained. Without a clear understanding of what character is, how to develop and embed it in organizations, leaders are unprepared to lead. Boards are unprepared to oversee effectively. Regulators are unprepared to identify and address the systems that create risk. Investors are unprepared to recognize what drives both success and failure. Essentially, when character is not understood or intentionally managed, it becomes a liability.
These issues motivated a significant research effort, drawing on centuries of philosophical ideas and recent advances in education and psychology to define and identify the dimensions of character that influence sustained excellence and well-being. The research culminated in the Character Wheel, shown in Figure 1, and described in the book “Developing Leadership Character,” which I co-authored in 2015 with my colleagues, Gerard Seijts and Jeffrey Gandz. As Corey Crossan, Bill Furlong and I summarize in our 2023 article “Cracking the Code: Leader Character Development For Competitive Advantage,” researchers at the Ivey Business School have revealed important differences in weak and strong character including a 14% difference in leader effectiveness, a 16% difference in psychological safety and a 10% different in leader resilience, job satisfaction and job related well-being. Although the case for character has gained momentum, as seen in Stanley McChrystal’s 2025 book “On Character,” there is a significant danger in treating character too simplistically and underestimating its impact.
Embracing Complexity and Strength of Character
The ‘Leadership on Trial” study showed that treating character simplistically—either as something you have or don’t have, or as subjective—leads to misunderstandings. Some see character as solely about integrity, while others focus on drive or courage. In a world where things are simplified to a two-by-two matrix or “the rule of three,” many people have a superficial understanding of character. Even when shown the evidence-based character wheel, there is a tendency to want to simplify it. A common refrain is that people won’t grasp or be motivated to engage with something that seems complex.
Oversimplifying character is a mistake, and arguably what has made it a liability, as seen in the GFC. Character isn’t about picking and choosing the dimensions that individuals and organizations believe to be important. Character should not be confused with values. Having a limited set of values is not problematic, as these are often aspirational in nature. Even though values may include a character dimension, such as integrity, valuing integrity is akin to asking someone to run a marathon without training. Developing integrity requires exercise. In my 2025 Forbes article, “Midnight Approaches: Living The Character Our Values Demand,” I highlight the urgency of moving beyond aspirational values and good intentions to develop and embody the strength of character needed to bring values to life.
Because the dimensions of character are universal, they are relevant personally and professionally, across sectors and contexts. One of the key benefits, therefore, is its scalability. However, organizations often focus on a few dimensions, such as integrity, overlooking how it can manifest in both deficiency and excess, as revealed in this linked table. Leaders may perceive themselves as principled but can become dogmatic if other essential dimensions, such as humility or humanity, are lacking. Imbalances are common and accepted, but they impair judgment. Since character can be developed, addressing imbalances—such as high drive with low humility—is possible and beneficial. Overemphasizing a few behaviors can make character a liability, compromising judgment and overall well-being.
As with anything new, character can seem foreign and complex at the start, but experience reveals a different perspective. Ted MacDonald, Technical Director, Financial Markets Standards Board in the U.K., relayed his experience:
“Some people have expressed the concern that keeping track of 11 dimensions of character is rather a lot, and wondered if boiling it down to five or just focusing on that many would be enough. I had this very thought myself when I first looked at the character wheel. It reminded me of that initial feeling I’d get when looking at the jumble of a 500-piece crossword puzzle after dumping it out of the box onto a table. You have a bit of confidence but feel daunted, nonetheless. Then you see a few straight edges, assemble some bits of a border, and you’re off! It is quite natural to wander around, focusing on different parts of the picture you are assembling. It gradually takes shape, and it is an enjoyable exercise. It was quickly evident that 11 was easy to work with. Then there is the matter of 62 elements of behaviour; after more than 10 years of engagement, I would struggle to list them, but I can now feel them. Being able to sift through various impressions and perhaps label what’s going on within as an act of discovery is what satisfies. I might have the character wheel in my hand as I do so.”
Having worked with thousands of leaders who find the character wheel, and the insights about deficient and excess vices to be profound, a key difference between character being an asset or liability is moving beyond awareness of what character is and why it matters, to actually developing character.
Treating Character As Habit Development
Moving beyond awareness of character to actual development is challenging because character is shaped by habits and heavily influenced by systems such as organizations, communities and society. During the GFC, reward systems seemed to override good judgment. Forbes writer Nuala Walsh wrote a 2024 article, “Why Good Judgment is Getting Harder,” citing that people are distracted and experience data overload, leading to a state of tuned-out thinking. The fast-paced lifestyle and performance pressures are promoting short-term thinking and a lack of attention to detail. People are distracted and confused by conflicting interpretations and polarized mindsets. Add in social media and AI, and there is a toxic cocktail of factors undermining judgment.
Although Walsh does not make the connection, all these factors shape and undermine character. A quick review of the deficient vice column in the linked table shows behaviors such as negligent, irresponsible, directionless, disconnected, unprincipled, lazy thinking, and oblivious. With a context that is conspiring to undermine character, there is a greater need than ever to develop it intentionally.
While programs like the Virtuosity Character Development app, which I co-created with Corey Crossan, exist, the main challenge is consistent action—going to the character gym. Organizations need a shift from training to habit formation. Just as developing good health habits are challenging but essential, character development is also challenging yet essential. Ultimately, character development is vital for achieving lasting personal and organizational change, as well as the next step—system transformation.
Cultivating Character Aligned Organization Systems
In contrast to how systems shape character, we need to consider how character can shape organizational systems, such as toxic workplace cultures. In 2022, Donald and Charles Sull, along with Ben Zweig, wrote an MIT Sloan Management Review article, “Toxic Culture Is Driving the Great Resignation,” revealing that more than 40% of employees in 2021 were considering leaving their jobs. Missing from the analysis was the fact that toxic cultures reflect the character of their members. In my 2025 Forbes article, “How Character Eats Culture For Breakfast,” I build on the work of Corey Crossan and Bill Furlong to describe how character imbalances contribute to toxic cultures. Repairing an organization’s culture starts with understanding and developing the character of its members. Furthermore, character imbalances are perpetuated in human resources practices, such as hiring, performance management, reward, and promotion, that neglect character, or only focus on a few dimensions, typically drive. Character will be a liability if not understood, developed, and intentionally embedded within organizational systems.
Natacha Prudent, now an Executive-In-Residence at Ivey’s Ian O. Ihnatowycz Institute for Leadership, described her experience in embedding character in a Canadian federal Agency.
“In 2018, Leader Character was introduced by the head of a Canadian federal Agency as central to an organizational culture transformation occurring to foster a more positive and respectful workplace. I was charged with leading the implementation of the Ivey Business School Leader Character Framework within this organization of 14,000 full-time equivalent employees and decentralized into eight geographical regions.
Leader Character was integrated into all organizational areas, including selection, rewards, recognition, performance management, and development, to ensure senior leaders align with agency values and priorities. A Leadership Development Strategy was created to train and guide both new and existing leaders. As part of this, 91% of executives and 62% of middle managers completed self-assessments, with workshops held across regions. The framework was incorporated into new Manager and Leadership Development Programs for equity groups. Character leadership also supported the Agency’s Equity, Diversity, and Inclusion (EDI) initiatives and the Anti-Racism Strategy to promote these priorities.
As stated by the head of the agency, the ‘accessible, practical and universal language of Leader Character makes it perfect for applications.’ From coast to coast, corporate and front-line leaders found it to be relatable and easy to incorporate in day-to-day management practices and front-line operations.”
A key insight from Prudent’s experience is that character leadership can be effectively embedded in organizations; however, doing so requires the support of senior leadership. One of the major challenges is to embed it so deeply that what might have been an asset is not eroded when the leader leaves, as was the case with the government department when the leader retired, or with the departure of Nelson Mandela. Although these four differentiators will go a long way to ensuring character becomes an asset, not a liability, a broader ecosystem needs to be taken into account.
Strengthening The Character Ecosystem
Moving beyond the organization, there is a broader set of systems that influence organizations and their character. For example, Boards of Directors and Regulators should provide character oversight, meaning that they can positively influence how organizations in their purview operate. Having worked with boards and regulators, they are often reluctant to wade in on character because they don’t understand what it is, how it operates, and therefore what they can do about it. However, Peter Routledge, Superintendent of Financial Institutions for Canada’s banking regulator, pointed out in a May 2024 speech to the C.D. Howe Institute that, “We thought that solvency was king, but that mindset has proven to be overly simplistic because we underappreciated the fact that non-financial risks can produce financial risks, often suddenly and abruptly. Solvency and liquidity risks are critical to focus on and manage, but as I stated earlier, they are usually lagging signals of financial instability. Experience teaches us that inadequate assessment of non-financial risks is usually the root cause of financial instability at an institution.” Our findings from the Leadership on Trial study support that it is the non-financial risk of character that requires oversight. Routledge describes expectations that boards will provide oversight with key principles they are expected to uphold, including character: “Responsible persons and leaders are of good character and demonstrate integrity through their actions, behaviors, and decisions.” Although the prescription is in place, good intentions are not enough. Character will continue to be a liability if the five differentiating factors are not addressed.
Additionally, education is part of the larger ecosystem. Competence, in the form of knowledge, skills, and abilities, has been a dominant focus in education. Elevating character alongside competence will help equip individuals with the qualities they need to lead in their personal and professional lives. When students with strong character enter the workforce, organizations benefit from their enhanced overall effectiveness. This signals that organizations must be prepared to embrace and support individuals of strong character. In turn, it reinforces the reality that students of character are becoming the new norm—driving and sustaining character development initiatives within education.
Returning to the Leadership on Trial study, we aimed to understand what we had been missing in leadership education and development. The need to develop character is even more critical today. Unfortunately, many negative systemic forces undermine and influence character. In my 2025 Forbes article “Why Artificial Intelligence Needs Character Based Judgment,” I rely on Shannon Vallor’s work to describe how AI is a mirror of our collective character. I also draw attention to the dangers of more intentional and nefarious influence that shape character through cognitive warfare in my 2025 Forbes article “3 Ways Cognitive Warfare Exposes Character And What To Do About It.” For character to be an asset, not a liability, there is a need to invest in the broader ecosystem that shapes character.
In summary, work remains to ensure character is an asset rather than a liability. The roadmap is clear, and unfortunately, there are no shortcuts. Although it may seem overwhelming, the key is to start the journey. The five differentiators provide guidance on the factors that will influence effective and transformative impact.