Functional Leaders Drive Profits: Truth or Lie?

We often hear people making jokes about being “dysfunctional.” I’ve yet to meet a person who says they come from a “functional” family. Does the Brady Bunch really exist? Okay, I take that back; even they were dysfunctional. And the influx of reality TV provides a whole new model of dysfunctional being played out for future generations. Watching dysfunctional behavior on our favorite shows may be a great form of entertainment, but when the energy of a dysfunctional person seeps into our personal lives it’s not so fun. In fact, it’s absolutely exhausting, and sucks every ounce of energy out of us. Now take it a step further. When that dysfunctional person is the leader who controls our everyday work-life we become absolutely miserable. On the flip side, when we have a leader who is inspiring and leads from a place of integrity, we become energetically refueled and healthy simply by her presence. A business is only as healthy as the people who comprise it, regardless of tools or process.

To energize people, ignite action, and drive profit, all you have to do is create functional leaders who lead from a place of high character—putting healthy energy right back into the business. Voilá—everything is fixed! Easier said than done, right? Dysfunctional behavior is a leadership epidemic throughout the world. I get it. And that’s the exact reason why leadership functionality is Principle #1 in my book Fuel Your Business. If your business is to have any hope for successfully refueling human energy and driving future profits, you have to make the energetic health of your leaders the number-one priority of your business. You have to turn dysfunctional leadership behavior into functional leadership behavior driven by high-character values. And it’s not an all-or-nothing game—every incremental step by a leader is critical to attaining healthy energy in your business.

In January 2013, Fred Kiel, cofounder of KRW International, a leadership and team development company, presented his research in a TED Talk, proving that character matters in leadership, and high-character leaders achieve three times more than low-character leaders when it comes to ROA (return on asset) and employee engagement. The performance swing went from -0.57 percent in losses due to low-character leadership, to 8.39-percent gains from high-character leaders. The trend was consistent in both ROA and employee engagement levels. The study defined high-character leaders as having high integrity, responsibility, forgiveness, and compassion.

Kiel’s study was conducted throughout six years, on 100 CEOs from Fortune 500 and 1,000 companies, and sampled more than 8,000 employee observations—a ton of data that produced undeniable hard facts. Wake up, Corporate America! The question is no longer, Does character matter? The question now is, How do we make sure that high-character leaders are running the businesses that impact humanity and our world? The study also unearthed a remarkable data point: Character can be taught.

In June 2010, Brene Brown revealed her research findings on vulnerability. Brown’s six-year study yielded thousands of observation samples from people all over the world. Her research concluded that allowing ourselves to be vulnerable is the only way a human being will ever feel joy, love, purpose, and an intrinsic sense of “I am enough, I am worthy.” In the study, vulnerability is defined as the willingness to do something without a guaranteed result, having the courage to be imperfect, having the ability to be kind to ourselves first, and believing that the things that make you most susceptible and weak to the world are what make you most beautiful. The key to joy, love, and purpose is vulnerability.

Brown revealed that the missing component in our society today is our ability to be vulnerable. She also proved that vulnerability is a huge challenge in our society, a society that has been named the most in-debt, obese, medicated, and addicted in U.S. history—a society where shame and fear run rabid. As a means of survival and protection from fear and shame, our society has become expert in denial. We pretend things that are uncertain are, in fact, certain; we pretend we are what we’re not; we put ourselves on a conquest to perfect our existence. All the while, at the core of our human nature, we want to be vulnerable and feel connected—that’s why we are here.

So here’s the connection between Kiel’s study on leadership character and Brown’s study on vulnerability. The only way you can have a healthy energy in your business is by having functional leaders who lead from a place of high character. Yes, leadership character can be taught, but you can’t learn character without allowing yourself to be vulnerable. Until you allow yourself to be vulnerable as a leader, you will forever remain in a state of dysfunction—void of the true character that is proven to get business results. Now here’s the beauty: You can’t argue the data. High-character leaders get results—three times the return on assets of low-character leaders. Whom do you think employees want to work for? Whom do you think investors want running the business? And what kind of leader do you think will energize people, ignite action, drive profits, and move our world forward? If you said functional leaders, you are correct.

Gina Soleil, is a speaker and acclaimed author of Fuel Your Business: How to energize people, ignite action and drive profit. She blogs and speaks about how to create a business where people are energized, feel good and are happy. Visit Gina Soleil and follow her on Twitter.

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