Psychopaths in the C-suite | Fred Kiel | TEDxBGI
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0:07 - 0:10Thank you, Michael, and thank all of you.
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0:10 - 0:12I'm so excited to be here.
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0:12 - 0:16This is the first time that I will make
a public presentation -
0:16 - 0:20about the research that I've been doing
for the last six years. -
0:20 - 0:24Before I get into my subject
of the talk itself, -
0:24 - 0:28I want to ask each of you here
to stop and think for a minute -
0:28 - 0:32about someone that you might know
in a leadership position, -
0:32 - 0:34maybe in your own company,
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0:34 - 0:37and ask yourself: do they fit
any of these descriptors? -
0:37 - 0:39Are they maybe manipulative?
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0:39 - 0:40(Laughter)
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0:40 - 0:43Deceitful? Arrogant?
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0:43 - 0:46Easily pass blame onto others?
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0:46 - 0:47And, in spite of all of that,
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0:47 - 0:51they still are admired by people
in the senior management? -
0:52 - 0:53I thought you might.
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0:54 - 0:57Wherever I go, people instantly
recognize that description -
0:57 - 1:01in somebody that they know
that's in a leadership position. -
1:01 - 1:04Do any of these faces look familiar?
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1:05 - 1:06Bernie.
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1:06 - 1:08And Martha.
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1:09 - 1:11And another Bernie.
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1:11 - 1:16And the latest, who was just
convicted recently of insider trading, -
1:16 - 1:18Rajat Gupta.
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1:18 - 1:21Now, these four people
all have one thing in common, -
1:21 - 1:25and that is they've all been convicted
of white-collar crimes. -
1:25 - 1:27And, according to news reports,
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1:27 - 1:31they have ripped off a lot of people
financially and emotionally, -
1:31 - 1:33and I know, in some cases,
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1:33 - 1:37that people even committed suicide
because of their fraudulent behavior. -
1:39 - 1:43In 2005, I was the co-author of a book
called "Moral Intelligence," -
1:43 - 1:47and my co-author and I
simply made the claim in that book -
1:47 - 1:49that high-character leaders will get
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1:49 - 1:53better sustained long-term business
results than low-character leaders. -
1:53 - 1:55Now, we kind of thought it was obvious,
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1:55 - 1:58but, believe it or not,
we got a bunch of pushback, -
1:58 - 2:00and the pushback was this,
-
2:00 - 2:02"Don't tell me that,
you're a psychologist, -
2:02 - 2:05and all that soft stuff is nice to have,
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2:05 - 2:08but it's not really essential
as long as you stay legal," -
2:08 - 2:11that what really creates value
is the business model, -
2:11 - 2:14and that this is just
sort of frosting on the cake. -
2:14 - 2:18And I thought, "Well,
you know, fair enough. -
2:18 - 2:20I don't have the data."
-
2:20 - 2:24So, we set out to get the data,
and, over the past six years, -
2:24 - 2:29we've enrolled 100 CEOs
in a national research study -
2:29 - 2:31aimed at understanding
and researching the connection -
2:31 - 2:34between character and business results.
-
2:34 - 2:37We've enrolled CEOs
in Fortune 100 companies, -
2:37 - 2:39Fortune 500 companies,
-
2:39 - 2:41a lot of privately held firms,
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2:41 - 2:46and we actually have ten CEOs
of non-profits in our study. -
2:47 - 2:50Now, we didn't set out
to study psychopathic leaders, -
2:50 - 2:54and frankly we were mostly interested
in the other end of the continuum. -
2:54 - 2:56We wanted to understand
high-character leaders, -
2:56 - 2:59the impact that they have,
-
2:59 - 3:03but we encountered
a few of these bad actors as well. -
3:03 - 3:07But I'm here today
because I want to share with you -
3:07 - 3:11two results from our research
that I am most excited about, -
3:11 - 3:15and the first is
that high-character leaders -
3:15 - 3:19do in fact deliver
better business results. -
3:19 - 3:22There is a significant
return on character. -
3:23 - 3:26And the second result
that we discovered from our research -
3:26 - 3:28you might find a little surprising
-
3:28 - 3:31is that character is something
that can be taught. -
3:31 - 3:33So, I want to talk
about these two outcomes. -
3:33 - 3:37The first one: return on character.
What do I mean by that? -
3:37 - 3:41Well, first of all,
I need to define character. -
3:41 - 3:46Character is something
that other people notice. -
3:46 - 3:49You can infer what
a leader's character is -
3:49 - 3:51by how they treat other people
in the workplace. -
3:51 - 3:56And we concluded that there are
four moral principles -
3:56 - 4:00that, when leaders follow them, they will
be seen as people of deep character, -
4:00 - 4:03and there are two of the head
and two of heart. -
4:03 - 4:07When a CEO or a leader of any kind
demonstrates integrity, -
4:07 - 4:10it tends to generate trust
among the workforce. -
4:10 - 4:16And when they demonstrate responsibility,
it tends to be inspiring to the workforce. -
4:16 - 4:23When they see that a leader or a CEO
demonstrates forgiveness, -
4:23 - 4:26that's what generates innovation
in the workforce. -
4:26 - 4:29And finally, when they show compassion,
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4:29 - 4:32that's what drives up
workforce engagement -
4:34 - 4:37and talent retention.
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4:38 - 4:41So, that's what I mean by character.
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4:41 - 4:44When I say "return on character,"
I mean something else. -
4:44 - 4:46I'm talking there
about hard business metrics. -
4:46 - 4:49And so, we chose to study two:
the return on assets -
4:49 - 4:51and the level of workforce engagement.
-
4:51 - 4:54But, before you could really
proceed with our research, -
4:54 - 4:56we needed to come up with a way
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4:56 - 5:00of creating a single
character score for a CEO. -
5:00 - 5:01So, the way that we did that
-
5:01 - 5:05is that we asked random samples
of employees simply to rate -
5:05 - 5:08how well their CEO demonstrated
these four principles -
5:08 - 5:12of integrity, compassion,
responsibility and forgiveness. -
5:12 - 5:18And then, we took all of those ratings
and put them into one average score, -
5:18 - 5:20and that became the CEO's character score,
-
5:20 - 5:25which then allowed us to create
this character curve. -
5:25 - 5:27(Laughter)
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5:27 - 5:33Each dot on this character curve
represents one of the CEOs in our study. -
5:33 - 5:36And we ended up
with complete data sets on 79, -
5:36 - 5:40and we have almost
8,000 employee observations, -
5:40 - 5:42which gives them their character score.
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5:42 - 5:45So, this is a lot of data.
We have a lot of confidence in it. -
5:45 - 5:47Now, first thing you'll notice
-
5:48 - 5:52is there are no real
psychopaths in the study. -
5:52 - 5:55Well, how many psychopaths
do you think line up at the door -
5:55 - 5:59for a research study on integrity
in the workplace? -
5:59 - 6:01They just don't show up.
-
6:01 - 6:02But we did get a few that -
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6:02 - 6:04(Laughter)
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6:06 - 6:10We did get a few that could be called
"almost psychopaths," -
6:10 - 6:15and the only real difference between
an almost psychopath and a real psychopath -
6:15 - 6:16is that they're more functional.
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6:16 - 6:18The almost psychopaths are people
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6:18 - 6:21that often have outstanding professional
skills in one way or another, -
6:21 - 6:23but they still are the kind of people
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6:23 - 6:26that match that profile
I mentioned at the beginning: -
6:26 - 6:27deceitful, manipulative,
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6:27 - 6:30don't care about other people,
have no conscience, -
6:30 - 6:34have no remorse on the impact
that they have on other people. -
6:34 - 6:36We encountered one in our study.
His name was "Tom." -
6:36 - 6:40That's not his real name,
but the name I'll give him. -
6:40 - 6:42And the thing that most
impressed me about Tom -
6:42 - 6:45when I walked into his office
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6:45 - 6:48was that there was literally
no more room on the wall -
6:48 - 6:51for a picture of Tom
and some important person. -
6:51 - 6:53It was all filled.
-
6:53 - 6:56And Tom spent the entire interview
trying to convince me -
6:56 - 7:01what a wonderful company he had,
and what a wonderful CEO he was, -
7:01 - 7:04and how everything was going
just wonderfully well. -
7:04 - 7:08Well, when we got the data
from his employees, -
7:08 - 7:10it told a different story.
-
7:10 - 7:13In fact, the employees said
that Tom lied to them about half the time. -
7:13 - 7:17They said that it was not safe
to tell the truth to senior management. -
7:17 - 7:20And, furthermore, the employees said
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7:20 - 7:24that all of senior management
would alter business outcomes, -
7:24 - 7:27they thought, if it was
to their advantage to do so. -
7:27 - 7:31Well, then, that crisis in 2008
came for that particular company, -
7:31 - 7:34and it exposed their weaknesses,
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7:34 - 7:37and, within a few weeks
after that crisis hit, -
7:37 - 7:40Tom and his leadership team were fired
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7:40 - 7:44and the company was broken up into pieces
and sold to its competitors. -
7:44 - 7:46That was one of my almost
psychopaths in this study. -
7:46 - 7:48Going up the character curve,
-
7:48 - 7:52you'll notice next the
low-character underperformers -
7:52 - 7:55and the average CEOs,
and, for sake of brevity, -
7:55 - 7:58today I've put them into one category.
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7:59 - 8:01These are not bad people.
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8:01 - 8:04They're so much as underdeveloped people.
-
8:04 - 8:07It's as if their level
of character development -
8:07 - 8:10was sort of arrested
at about the 9th grade. -
8:10 - 8:13They are people who are kind of fearful,
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8:13 - 8:17and that's their biggest agenda item,
to achieve security, -
8:17 - 8:20and that translates into pursuit of money.
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8:20 - 8:23So, these are CEOs
that are all about themselves. -
8:23 - 8:27their biggest objective is to make
as much money as they can. -
8:27 - 8:29And, of course, their employees
see through this as well. -
8:29 - 8:35Their employees say that these CEOs
also tell the truth about half of the time -
8:35 - 8:39and that they care for people as people
even less than half the time. -
8:39 - 8:42But that brings me to the top
of the character curve -
8:42 - 8:46and this amazing group of men and women
-
8:46 - 8:49that we've chosen to call
the "virtuoso CEOs." -
8:49 - 8:51These are men and women
I really come to admire and love -
8:51 - 8:54in the course of this study.
-
8:54 - 9:00When I read the open-ended comments
that their employees said about them, -
9:00 - 9:05my first responses were, "I wish I could
have found a CEO like that to work for. -
9:05 - 9:08I would have gone to work
for them in a heartbeat." -
9:08 - 9:13Now, one of the dots in that circle
is a well-known CEO right here in Seattle. -
9:13 - 9:18It's a name that I'm sure
you will all instantly recognize, -
9:18 - 9:23and that is the recently retired
CEO of Costco, Jim Sinegal. -
9:24 - 9:29When we saw the ratings that Jim got from
the random sample of Costco employees, -
9:29 - 9:31they were some of the highest we had seen
-
9:31 - 9:35on integrity, responsibility,
forgiveness, and compassion. -
9:35 - 9:38And, when I saw those ratings, I thought,
-
9:38 - 9:40"Huh, I go to Costco
warehouses all the time. -
9:40 - 9:44I think I'll see if I can find
a disgruntled Costco employee." -
9:44 - 9:45So, I have a new hobby,
-
9:45 - 9:49and that's trying to find a disgruntled
Costco employee in a warehouse. -
9:49 - 9:50(Laughter)
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9:50 - 9:52And so far, no luck.
-
9:52 - 9:54I kind of sidle up to them and I say,
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9:54 - 9:56"Tell me, what's it like
to work at Costco?" -
9:56 - 10:00And I always get the same response,
"Oh, I love it here." -
10:00 - 10:03And after, we talk about
their wonderful pay and benefits, -
10:03 - 10:05I say, "Well, anything else?"
-
10:05 - 10:09"Oh, yes, it's the way I'm treated.
It's my manager, my boss. -
10:09 - 10:13She always stands up for me.
I know I can depend on her." -
10:13 - 10:18So, obviously, Jim honoring these four
moral principles we talked about earlier -
10:18 - 10:20has made that a part of the culture.
-
10:20 - 10:25He has insisted that all the managers,
and leaders, the entire company, -
10:25 - 10:27behaved in that way, and it shows.
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10:28 - 10:34Now, we asked ourselves, "If all we knew
about a CEO was their character score, -
10:34 - 10:36would that allow us in any way to predict
-
10:36 - 10:39what business outcomes
or business results would be?" -
10:39 - 10:41And we thought an interesting way
of looking at that -
10:41 - 10:45might be to divide this curve
in half, at the median, -
10:45 - 10:47and let's look
at the hard business metrics -
10:47 - 10:50for CEOs above the median on character
-
10:50 - 10:53versus those below
the median on character. -
10:53 - 10:58And we managed to get complete
financial statements for two years -
10:58 - 11:01on 40% of our sample,
-
11:01 - 11:03and here's what we discovered.
-
11:03 - 11:06It's that the CEOs above the median
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11:06 - 11:13create almost three times the return
on assets as those below the median. -
11:13 - 11:16And the only difference
between these is their character score. -
11:16 - 11:20Now, we had hoped that we would find
a difference that was significant, -
11:20 - 11:23but I didn't expect that it would be
three times as much. -
11:23 - 11:26And then, even more compelling is that -
-
11:26 - 11:29Let's look at the results
of the virtuoso CEOs at top circle -
11:29 - 11:32compared to the ones at the very bottom.
-
11:33 - 11:39The virtuoso CEOs contribute an average
of 8,4% return on assets, -
11:39 - 11:43and those at the bottom of the curve
lose money for investors. -
11:43 - 11:45This was pretty compelling evidence.
-
11:45 - 11:49So, we looked next at levels
of workforce engagement, -
11:49 - 11:55and they tracked exactly the same
with these figures on return on assets. -
11:55 - 11:59So, high-character CEOs
create these wonderful, -
11:59 - 12:03high-energy, positive work environments
where people love to come to work. -
12:03 - 12:07The low-character CEOs create these
painful work environments for people. -
12:07 - 12:11They don't even want to be there
and try to leave as soon as they can. -
12:11 - 12:17So, we concluded from this hard data
on two metrics business results -
12:17 - 12:19that character does matter,
-
12:19 - 12:22that we were right
when we wrote that first book. -
12:23 - 12:26So, I'd like to talk now about the second
outcome of our research, -
12:26 - 12:30and that is that character can be taught,
because people generally don't think that. -
12:30 - 12:31And, as I said before,
-
12:31 - 12:34a measure of your character
is how you treat other people. -
12:34 - 12:37And, you know, the most clear
indication of that -
12:37 - 12:39is when there's no apparent gain for you.
-
12:39 - 12:44So, think a minute: how do you treat
the person that cleans your office? -
12:44 - 12:48Or the checkout clerk
at the grocery store? -
12:48 - 12:50That reveals your character.
-
12:50 - 12:54The other thing that we discovered
that was really fascinating for me -
12:54 - 12:58is it dawned on us
about halfway through this study -
12:58 - 13:01that character is mostly
a matter of habit. -
13:01 - 13:04It's not a kind of a thing
you do a lot of thinking about. -
13:04 - 13:08These are character habits that you've
acquired through life experiences, -
13:08 - 13:11that you don't stop and think,
"Now, how should I treat the person?" -
13:11 - 13:14You just automatically treat them well.
-
13:14 - 13:18If you have a well-ingrained
integrity habit, -
13:18 - 13:21your first response will be to tell
the truth and to keep your promises. -
13:21 - 13:24If you have a well-ingrained
responsibility habit, -
13:24 - 13:27your first response will be
to own up to your own mistakes -
13:27 - 13:29and be concerned for the common good.
-
13:29 - 13:31It's like muscle memory.
-
13:32 - 13:34So, once we understood that, we thought,
-
13:34 - 13:38"Well, habits can be changed.
People do it all the time." -
13:39 - 13:42So, developing character
is about strengthening moral habits -
13:42 - 13:44more than anything else.
-
13:44 - 13:46It can be a little more
complicated than that, -
13:46 - 13:50I don't have time to go into it, but it's
mostly by strengthening moral habits. -
13:50 - 13:53So, that we thought was good news.
-
13:53 - 13:57So, we wondered,
back to our virtuoso CEOs, -
13:57 - 13:59"Do they have a particular set
of moral habits -
13:59 - 14:01that are different
from those at the bottom? -
14:01 - 14:06And, even more, do they all have
a set of habits in common?" -
14:06 - 14:09And we found, in fact, that they do,
-
14:09 - 14:12that there are three habits
-
14:12 - 14:17that the high-character, virtuoso CEOs
all seem to have in common. -
14:17 - 14:20And the first is what I call
the empathy habit, -
14:21 - 14:24and the empathy habit is kind
of what is sounds like, -
14:24 - 14:29it's immediately being able to sense
what other people are feeling. -
14:29 - 14:33Now, virtuoso CEOs,
this is a core competency for them. -
14:34 - 14:38You were born with
a perfect skill in doing this, -
14:38 - 14:42but, growing up in our culture, it's
probably often been trained out of you. -
14:42 - 14:48You've probably been also told
in our culture that business is business, -
14:48 - 14:51and, "Don't get personally involved
in business decisions", right? -
14:52 - 14:54Well, wrong, if you're a virtuoso CEO.
-
14:54 - 14:58They do get involved
in personal relationship -
14:58 - 15:00to the decisions they are making.
-
15:00 - 15:03The first thing they think about when
they make a difficult business decision -
15:03 - 15:07is, "How is this going to impact
the people that are involved?" -
15:07 - 15:12The second habit
that the virtuoso CEOs have -
15:12 - 15:15is what I call the other first habit.
-
15:15 - 15:17When they're making
a significant business decision, -
15:17 - 15:21the first thing they think about is,
"How is this going to impact other people? -
15:21 - 15:24And what's best for other people?
What's best for the business?" -
15:24 - 15:29And it's never about "me,"
and "my salary," or "my status." -
15:29 - 15:31Now, the paradox of that, of course,
-
15:31 - 15:36is that the high-character CEOs
enjoy a lot of career success -
15:36 - 15:38and make a lot of money.
-
15:38 - 15:41So, that's kind of interesting.
-
15:41 - 15:46The third habit that they have
is what I call the "I screwed up" habit, -
15:46 - 15:48and that's admitting
to their own mistakes. -
15:48 - 15:51One of the CEOs in the study said
that, early in his career, -
15:51 - 15:55when he was still a young man in his 30s,
-
15:55 - 15:57he was already reporting to the CEO,
-
15:57 - 16:01and one day the CEO called him
into his office and said, say, -
16:01 - 16:03"We have a crisis on our hands.
-
16:03 - 16:06I made a bad decision.
I really screwed up." -
16:06 - 16:08And he said he almost fell off his chair.
-
16:08 - 16:12He'd never ever heard a senior leader
ever say something like that before, -
16:12 - 16:14admitting to his own mistakes.
-
16:14 - 16:18But he said, "It had a wonderful impact
on me because it freed me up." -
16:18 - 16:21He said, "From that point on,
I knew I could do that as well." -
16:21 - 16:26So, more than anything else, when a leader
admits to having made a mistake, -
16:26 - 16:31yet communicates trust and respect for the
people in the room that you're talking to, -
16:31 - 16:33it says to them, "I'm just like you.
-
16:33 - 16:36We're all in the same playing field,
we're all in this together, -
16:36 - 16:38we're all coequal as people."
-
16:38 - 16:42It's very energizing to people
when a leader does that. -
16:42 - 16:45So, I have a three-point map for you.
-
16:45 - 16:50If you want to try to increase
the strength of your moral character, -
16:50 - 16:53practice empathizing,
move from "me first" to "others first," -
16:53 - 16:56and start owning up to your own mistakes.
-
16:56 - 16:59Now, I know this is easier said than done,
-
17:00 - 17:04but you can change habits,
it's not impossible to do by any means. -
17:04 - 17:07And I would suggest that perhaps
-
17:07 - 17:12you take a page out of the virtuosos'
playbook, and do it the way they did it. -
17:12 - 17:13They have a particular strategy
-
17:13 - 17:16for acquiring and strengthening
their moral habits, -
17:16 - 17:21and that is that every one of them had
one or more important mentors -
17:21 - 17:22in their career.
-
17:22 - 17:25They often had multiple
mentors in their career. -
17:25 - 17:27They started early at getting mentored,
-
17:27 - 17:30sometimes before they got
even into their career. -
17:30 - 17:33And I'm sad to say that the CEOs
at the bottom of the character curve -
17:33 - 17:36had hardly any mentors, or none.
-
17:36 - 17:40So, my advice to you is,
do it like the virtuoso CEOs do. -
17:40 - 17:43If you want to strengthen
your moral character, -
17:43 - 17:47find yourself a good mentor,
but remember it should be somebody -
17:47 - 17:51that's higher up on the character
curve than you are. -
17:51 - 17:54You would not think
about trying to climb Mount Rainier -
17:54 - 17:57with a guy who had not
climbed it before, right? -
17:57 - 17:59So, that would be my advice to you.
-
17:59 - 18:02In closing, I have three dreams,
-
18:02 - 18:06and one is that, in the near future,
-
18:06 - 18:10character development will be
part of the core curricula -
18:10 - 18:15for next-generation leaders in companies
in leadership development programs. -
18:16 - 18:20The second dream I have is that executive
search firms and recruiters -
18:20 - 18:26will find a set of tools
that can accurately assess for character, -
18:26 - 18:28and that they'll use it to screen out
-
18:28 - 18:33the superficially warm, friendly,
manipulative psychopaths, -
18:33 - 18:36so that they don't even
get into leadership positions, -
18:36 - 18:39because, when they do, they destroy
so much value and cause so much pain. -
18:39 - 18:44And the third that I dream about is what
Michael mentioned at the beginning, -
18:44 - 18:48that business schools will embrace
character development -
18:48 - 18:50as the core of their curricula,
-
18:50 - 18:54and maybe put all that other stuff
online - well, just kidding - -
18:54 - 18:55(Laughter)
-
18:55 - 18:58but that it'll be the core of the
curricula, instead of how it is now. -
18:58 - 19:04It's mostly ignored or it's bolted on
as an ethics course. -
19:06 - 19:08So, that's my dream for the future,
-
19:08 - 19:11and, in closing, I just want to point out
-
19:11 - 19:15that high-character CEOs
do produce better financial results, -
19:15 - 19:18they do enjoy higher levels
of workforce engagement, -
19:18 - 19:22and you can increase the strength of your
character habits, it's not too late. -
19:22 - 19:24That's what star performers do.
-
19:25 - 19:29So, return on character is significant.
The data is in. Thank you. -
19:29 - 19:31(Applause)
- Title:
- Psychopaths in the C-suite | Fred Kiel | TEDxBGI
- Description:
-
Fred Kiel talks about his research that uncovers the most effective personality characteristics in leadership.
This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx
- Video Language:
- English
- Team:
closed TED
- Project:
- TEDxTalks
- Duration:
- 19:39
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Leonardo Silva edited English subtitles for Psychopaths in the C-suite | Fred Kiel | TEDxBGI | |
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Leonardo Silva edited English subtitles for Psychopaths in the C-suite | Fred Kiel | TEDxBGI | |
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Leonardo Silva edited English subtitles for Psychopaths in the C-suite | Fred Kiel | TEDxBGI | |
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Leonardo Silva edited English subtitles for Psychopaths in the C-suite | Fred Kiel | TEDxBGI | |
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Leonardo Silva approved English subtitles for Psychopaths in the C-suite | Fred Kiel | TEDxBGI | |
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Mile Živković accepted English subtitles for Psychopaths in the C-suite | Fred Kiel | TEDxBGI | |
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Mile Živković edited English subtitles for Psychopaths in the C-suite | Fred Kiel | TEDxBGI | |
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Leonardo Silva edited English subtitles for Psychopaths in the C-suite | Fred Kiel | TEDxBGI |