‍0:00:02.0 Producer: Welcome back, Culture by Design listeners. It's Freddie, the producer of the podcast. In today's episode, we're talking about leading with character and competence. At LeaderFactor, we view leadership as an applied discipline. It's a learnable skill. It's something that you can improve with good information and a lot of effort. I guarantee that if you approach this episode with the intent to get better, you'll have at least one light bulb moment. This episode will kick off a leadership series where Tim and Junior will dive deep into the character and the competence you can develop to make the biggest impact in your organization and in your personal life. These are not going to be fluffy episodes, but extremely practical frameworks and resources to help you take your leadership to the next level. This series will last for the next several weeks. So if you're not subscribed, I encourage you to do that so you don't miss a single one. As always, links to this episode show notes can be found at leaderfactor.com/podcast. Enjoy today's episode on Leading with Character and Competence.

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0:01:13.0 Junior: Welcome back everyone to Culture by Design. My name is Junior, and I'm here with Dr. Tim Clark. And today we'll be discussing character and competence, two must haves for every leader and every person. Tim, how are you? 

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0:01:25.0 Tim: I'm doing great. How are you, Junior? 

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0:01:27.2 Junior: I'm doing well. I'm excited about today's episode.

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0:01:29.2 Tim: Me Too.

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0:01:30.4 Junior: Almost 10 years ago, Tim wrote a book Leading with Character and Competence. In my opinion, it's one of the most practical, straightforward, synthesized leadership books of all time and I've read my fair share. And we're going to spend the next few episodes talking about leadership. We call it the most important applied discipline, and its essence is our name LeaderFactor. The most important variable in any outcome is the leader. So Tim, any thoughts on that? Our name LeaderFactor? 

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0:02:00.8 Tim: Yeah. I think that, I believe that because if you think about leadership, it's a factor in every decision and every outcome. So you gotta make the decision. How do you make a decision? Well, there's gotta be some leadership somewhere along the line to make a decision. And then what becomes the outcome? It could be a good outcome, it could be a bad outcome. We might execute well, we might execute poorly. It's gonna be a factor. So at the front end, it's a factor in the decision, at the back end, it's a factor in the outcome. I don't know of another applied discipline that can make the same claim. That's pretty important.

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0:02:37.7 Junior: It's pretty important.

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0:02:38.1 Tim: Yeah.

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0:02:38.7 Junior: And we're gonna dive into its essence today. Character and competence. That's the premise that there are two big pieces of leadership that will frame everything that follows, character and competence. Achieving or becoming better are perhaps you never truly achieve them. These two things is the journey of a lifetime. And there's a Thomas Paine quote that's in the book that I absolutely love, he said of freedom, "What we obtain too cheaply we esteem too lightly. It is dearness only that gives everything its value. Heaven knows how to put a proper price upon its goods." So what does that mean? Why would we share that? The journey of leadership is a difficult one, and in my opinion, our progress will be commensurate with the effort. And so, we invite everyone to join us in this discussion as our thought partners. And we're going off on a little bit of a leadership side road here. And we are interested to see what you all think. If this is something that you'd like us to continue to do, because we're going to be doing, this is a pretty substantial series. Isn't it, Tim? 

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0:03:44.1 Tim: [chuckle] Like nine episodes or something like that? 

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0:03:46.5 Junior: Yeah, give or take.

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0:03:47.8 Tim: I wanna come back to what you said. It is an arduous journey. Junior and I don't think you can negotiate or cheat your way through it. Sometimes, people will use proxy indicators as replacements for leadership and they'll say, "Oh, I achieved this position, so therefore I've gone through the journey." You can't cheat. You can't cheat that way. You can't negotiate with the principles of leadership. They're exacting and they're demanding. We're gonna talk about that. It is an arduous journey, and it does require character and competence. We'll talk about how the two of those come together and the synthesis between those, the skill side and the will side. I'm excited for it.

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0:04:33.6 Junior: So what is leadership? You mentioned a few of the things that it's not, it's not title, it's not position, it's not authority. We did an episode on the 10 misleading leadership theories, and we concluded that leadership is not about charisma or eloquence, power, seniority, scale, popularity, fame, winning wealth and education. So those are the 10 things that it isn't. So what is it? It's influence. And you mentioned that our primarily primary lever of influence is modeling behavior. Tell me about that.

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0:05:06.1 Tim: No, maybe it was Charles Dickens that said, Don't tell me, show me." Same thing is true in leadership. Don't tell me, show me. Modeling is the most important way that we teach leadership, because what is the most important way that humans learn? They learn through imitation. They've gotta have a model. They've gotta have some reference, some embodiment to look to copy, to follow, to emulate and that's where modeling comes in. So the leader has to model and then others can imitate. They can learn through observation and then imitation. It's the most important way that we learn and pass that discipline on down.

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0:05:52.6 Junior: Breaking it down that way is really helpful for me because I think about, if I call myself a leader, what does that mean? It's easy to say, "Oh, I'm a leader, or this person's a leader." But if leadership is influenced, then you're saying that I influence. I influence others. So if I do that, what do I have to have? We say that every leader has to have these two things, character and competence. In the way that you've described this in the past, really resonated with me the first time that I heard it. You talked about the core and the crust. So for all of the listeners, picture a model of a sphere. Think of the earth. In the center, you have the core, the core of character. On this outer layer, you have the crust, the crust of competence. So the core is character, who you are, who you are, the truth of who you are, what you stand for. It's a measure of your moral makeup. You say it's values, self-imposed, ethical creed. It has nothing to do with technical expertise, charismatic arts, strategy, or other professional things. So tell us a little bit more about core. Why is this core? 

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0:07:04.3 Tim: It's core refers, Junior, to the way that you govern yourself from the inside out. This is the unenforceable aspects of who you are. You're not waiting to be regulated. You're not waiting to be governed. You're not waiting to be controlled or coerced. You're not waiting... You are acting as an agent using your agency. You're making decisions and you're choosing to influence people toward worthy goals, worthy ends. And you're not using manipulation and you're not using coercion, right? You're staying away from those on the spectrum of influence and you're focusing on the tools of persuasion so that you can influence people legitimately using those tools. That's the essence of leadership as an applied discipline. So the concept is pretty simple at its essence. Doing it, developing that skill and will to be a great leader is not easy, as you said earlier.

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0:08:11.1 Junior: So in the book, there's a quote, "Name a large fall from grace," that was about a lack of competence. I was thinking about this and I couldn't name one. And this speaks to just how integral the core is and how consequential the core is. You mentioned that when leaders go down, they go down from the inside out, a collapse of character or what you call a core meltdown. That was a really interesting way to put it.

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0:08:38.9 Tim: Yeah. Think about the stories that come along, the scandals that come along. Think about when leaders really fail and it's published and publicized and we learn about it. Do they ever talk about a failure of competence? Almost never. It's almost always a failure of character. It's really interesting. So it shows that how important that is, and that raises a question. Would you rather go into battle with a charismatic leader, with a liquid core, a liquid core, or even a dull leader with a titanium center? It really makes you think, what would you rather do? It shows you how important that core is because if the core's not there, then there's a good chance that we can predict that you're gonna let us down. We just don't know when. That's how that works.

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0:09:38.2 Junior: I was thinking about that ask, name a large fall from grace, that was about a lack of competence. And as I started to dig into this and think more about it, it helped me understand why the core is the core, and the crust is the crust. And I think one of the differences between the core and the crust is that when you're talking about character, you're talking about ethics, it's easier for an organization to have a single point of failure that's ethical than competence based. And I thought this was really interesting because if you look from a risk management perspective, is it riskier for the organization to have a person in a position of power who is immoral or unethical or incompetent? If you are incompetent, there are other things that can catch the fall. It seems to me that you have a bigger safety net that can be covered through other people, other areas of the organization whereas the ethical piece doesn't have that same sort of safety net.

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0:10:39.3 Junior: And I just wanted to call that out as a distinction, because at least for me, that's what helped me really solidify the logic of why this is core. And it may seem obvious at face value, right? Oh yeah, of course, the core is going to be character. But if you really have to defend that point and point to a few pieces of logic, that at least to me was one of them, and it's not of moral origin either. It's a pretty tactical, pragmatic way to look at it. If as an organization you're trying to optimize for the health and growth of the organization, then the ethical risk presents a massive, massive, massive downside.

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0:11:14.8 Tim: Here's another question to ask. Think about how frequently we talk about, and we read about toxic culture and a toxic workplace. When we say toxic leader, are we referring more to character or are we referring more to competence? Just think about that. I would suggest that we're talking much, much more about character. If you have a failure of character, if the character's not there, that's pathological and you are spreading that pathogen. And this goes to your point, Junior, you can fix a competency issue. You can train the person, coach the person, correct the person, replace the person. It's okay. We can overcome that. It doesn't spread like a pathogen. It's not viral. It doesn't have that viral quality that toxicity has. So just ask yourself, when it comes to toxic culture, what are we really talking about? We're really talking about a failure of character. So hopefully, that creates more clarity as we talk about the difference between these two aspects of leadership.

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0:12:30.6 Junior: Here's a quote from Thomas Macaulay that I think is really good. "It is not necessary to my happiness that I should sit in parliament, but it is necessary to my happiness that I should possess in parliament or out of parliament the consciousness of having done what is right." The question that I think about here is, can you sleep at night regardless of the position that you occupy, regardless of how skilled you are, regardless of how other people think you are skilled, can you sleep at night? Because at the end of the day, you have to be at rest with your behavior. So here are some stats that I think are pretty interesting, and then I wanna go into the overlap between character and competence, but here are some stats. A global survey by EY found that 42% of employees had observed misconduct in their workplace over the past year. And I'll define what that is.

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0:13:22.8 Junior: With 10% reporting that they had personally engaged in unethical behavior. 42%. So what is this misconduct that they're talking about? This is how they categorized it. Misuse of company resources, such as using company equipment for personal purposes, abusive behavior such as bullying or harassment, discrimination such as bias against a particular race or gender, lying to employees or customers. Conflicts of interest such as favoritism or nepotism, bribery or kickbacks, theft or fraud. So, that's a list of seven things that 42% of employees said that they had observed in their workplace over the past year. And 10% of them saying that they had personally done those things. How about that? 

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0:14:09.3 Tim: It's astonishing. So what that helps us understand is that, a big proportion of the leadership population is what we would call venal. That means that they can be bought, right? And so, at some point, they're a human vending machine. Put in your money and get what you want. Now, I know that's crass. I know that doesn't sound very good, but essentially that's what we're saying is that you're for sale, you're venal. But what you have to get to as a leader is, you have to get to a place where there are some things that are simply not for sale. They are not negotiable, they're non-negotiables. That only if you get to that point can you achieve that combination of character and competence that we're talking about. And Junior, I wanna talk about how, we have the character side, we have the competence side, but at some point, those become complimentary.

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0:15:06.0 Tim: There's a synthesis between the two and certain attributes of leadership, certain leadership traits or attributes or characteristics are actually a function of both character and competence because they have bled into each other. I'll give you three that I wrote down. Now think about this. This is so fascinating. Take judgment as an example. If you're a leader, you get paid for judgment. To a large extent, that's what we pay you for. But where does judgment come from? Does it come from character, the character side of leadership? Or does it come from the competence side of leadership? The answer is yes. Think about it. Judgment is a combination of integrity and knowledge. But what if you are a leader and you're driven by your personal ambition and your self-interest? It's unbridled personal ambition. Is that going to get in the way of good sound judgment? Of course, it will. So can you see how the integrity has to combine with the knowledge and experience to produce the attribute of judgment? Judgment lives at the intersection of character and competence. Isn't that amazing? 

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0:16:30.7 Tim: I'll give you a second one. A second one, productivity. Think about productivity. Productivity is a combination of discipline, which is largely a function of character and skill, which is a function of competence. So you're bringing discipline and skill together to produce productivity. Again, there is a leadership attribute that lives at the intersection of these two domains. I'll give you one more. Here's the third one, collaboration. What we all know, especially in the 21st century, in this decade, that we need collaborative leaders. If you're not collaborative, you're not gonna get very far. Well, how do you become collaborative? Collaboration is a combination of humility and communication. Isn't that interesting? 

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0:17:28.1 Tim: Humility on the character side, communication on the competence side. So again, it lives at the intersection where there's a synthesis between character and competence to produce effective collaboration in a leader. It's not one or the other. So they become, to use the phrase of, I think it was [Stephen Jay Gould, the great biologist at Harvard, "They become overlapping magisteria." They overlap his domains. And that's where the magic happens. When you bring those two together and you've developed enormous character and enormous competence, and you bring them together, watch out, you're going to be quite an effective leader. Those are just some examples.

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0:18:15.6 Junior: Well, if you take those traits and you remove the character, they become dull. They become lifeless. They become colorless and dry. It's the core, the character that give them that vibrance, that give them that color, that give them the motivational component. If I think about people who exhibit those behaviors, they're people that you wanna follow and it's not artificial. It's not just charisma. It's something that's deeper than that. You can feel that. And so often would bereft of those things. So let's continue with a couple of these numbers to help prove that point. So a study by the Institute of Leadership and Management found that 57% of managers had witnessed unethical behavior by senior leaders in their organization.

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0:19:07.7 Tim: It's a big number.

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0:19:08.0 Junior: Talk about modeling behavior. Talk about tone at the top, talk about patterns, talk about normalization. Again, why do we say the leader factor? Because that's where so much of this lives. It's at the level of leadership, and the higher you go, the more impact you have, the more scalable your influence needs to be, or is by nature of your role for better or for worse, depending on how good we are in core and crust. So here's another. The EY survey that I referenced originally also found that 56% of employees talk about venal, said that they would be willing to compromise their personal ethics in order to advance their careers. Just let that sink in for a second. Over a half.

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0:19:55.9 Tim: And do you wanna follow those leaders? Would you be motivated to sign up, to follow them, to trust them? It's pretty incredible.

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0:20:06.4 Junior: Here's another one, if that weren't incredible enough. According to a study by the Association of Certified Fraud examiners, organizations lose an average of 5% of their annual revenue to fraud. That's pretty big.

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0:20:19.4 Tim: Yeah.

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0:20:20.4 Junior: Accenture found that 54% of consumers, so talking about the consumer angles, have stopped doing business with a company due to concerns about its ethical behavior. So these are just the first order consequences. This is what we can observe inside the institution. Then to that last statistic, we can start talking about the second and third and fourth order consequences that eventually affect the bottom line. And so, these behaviors that are sometimes small and sometimes big, that are motivated by self-interest often put the entity itself at risk over a long enough time horizon. And what's interesting to me about that is that often these short-term sacrifices and sacrifice is probably the wrong word, mistakes that people make, immoral choices, put them in a position to ascend the organization based on whatever short-term metric we're optimizing for, then what happens? They move up the ranks in the organization because that's often what's incentivized.

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0:21:24.4 Junior: And then you get higher and then you get higher and then you're at the top. And this isn't the way to ascend every hierarchy, but certainly there are unethical hierarchies that we've created or that have devolved into unethical hierarchies. And we find that the people at the top of those, I mean sometimes we end up all the way in Watergate. And that is a preventable, predictable thing based on what the organization is incentivizing based on what it is the institution thinks about how important core is.

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0:21:55.5 Tim: Well, that's really true. I think we have to realize Junior, that every time there's an ethical breach, every time there's ethical misconduct, it's traceable to the original ethical conflict, that original carnal. It was a moment of truth when a leader said, "I'll go this way, or I'll go this way." And then it goes from there. And then we have, as you said, first order and then second order, and then third order consequences, we have reverberating implications. It goes from there. But if we trace it back to its origin, it always begin, it always does begin with a simple choice at that moment of truth where there's a conflict. And usually, it's a conflict between personal interest and the interests of the organization. There's a collision. If you yield to self-interest, you have failed the leadership test. But if you put the institution's interests above your self-interest, then you have committed an act of leadership and you have passed the leadership test.

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0:23:17.7 Tim: And this is going to happen to you again and again and again. And what's interesting is that the big ethical breaches, when we get into big trouble, they still started small. No one could have forecasted the magnitude of what eventually happens when we have a big problem. It always started with that very small ethical conflict in that moment of truth. And that individual was trying to figure out, what should I do in that moment? And then we go from there.

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0:23:53.9 Junior: That makes me think about the mechanisms of accountability that exist inside organizations. And some of those are well developed, and some of those are very immature, depending on the organization and the tolerance. And we like to say that you'll get what you tolerate organizationally. But at the end of the day, as it relates to the core, the accountability needs to shift from the infrastructure of the organization to the ethics of the individual. And we each need to hold ourselves accountable because it could be that there's a scenario some time in which the organizational infrastructure is too immature to prevent or respond to that type of ethical breach such that it would become systemic if we went down that route. And so what... You get what you tolerate is true on a personal level. And if you tolerate unethical behavior yourself, that's what you'll get in yourself and you can predict that that's going to be your own behavior.

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0:24:54.2 Junior: And so that tolerance needs to live at the level of the individual. And that's a very difficult thing to do to scale. But certainly inside the organization, we need to have measures in place to one, disincentivize that type of behavior because there are often always really strong incentives that we need to look at and consider. And then two, there need to be consequences when those sorts of things happen. Because if they don't, then we need to average out the ethics of the organization, and chances are, well, you saw the statistics. 56% say they're willing to compromise their ethics in order to advance their careers. So obviously there needs to be some sort of institutional accountability.

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0:25:36.5 Junior: But this is a very interesting topic to me because we have these two domains of the institution and the individual, and there can be dissonance between those two things. And I also wanna call out to your previous point that often, it's a collision between personal incentive and an organizational incentive or a personal interest and an organizational interest. But which one is ethical can change. It could be that the organization's interest is unethical and you as an individual inside the organization at large or a department or a team need to stand up and say, "Hey, you know that's not okay." And so, the dynamics can change, the incentive structure can change but what doesn't change, this idea of core.

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0:26:24.9 Tim: I'll give you a case study Junior.

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0:26:26.8 Junior: Please.

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0:26:27.3 Tim: There's an organization that we've worked with for more than a decade. It's an organization that I admire very much. I think it's one of the best run organizations in the world. It's a Fortune 500 corporation. I won't name the corporation out of the interests of confidentiality, but they have a DNA, an ethical DNA that says there's never a wrong time to do the right thing. And they repeat this again and again and again. And it comes down from the top, it comes down from the chairman of the board, it comes down from the CEO, and they reinforce it. And so, when there's a little problem here or there and someone says, "Well, I was just trying to get it done and we're always gonna make it happen, no matter what," they're always stopped mid-sentence. And the leader will always say, "Well, hang on a second. What did you say?" That's not how it works.

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0:27:29.1 Tim: Sometimes, ethical behavior is expensive. Sometimes, it's going to cost you something. It's going to cost you in profitability, it's going to cost something, but you're going to do the right thing. So in this culture, the DNA is, don't even think about a shortcut. We don't do shortcuts. We don't do shortcuts. We don't do anything to deceive or manipulate or exploit or take advantage of the customer or any stakeholder and certainly not any shareholder. That's not who we are. That's not what we do. But that DNA has to be modeled and it has to be reinforced again and again and again. It's perishable, the job is never done. But that's the DNA. So you may wanna ask yourself, for listeners out there, what is the ethical culture of your organization? How ethical are you? And what ethical norms and standards do you reinforce? Do you hold people accountable against, what are they, right? And is it, hey, we'll make it happen at any cost? Is that the mentality? 

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0:28:49.4 Tim: Because if it is, you are tacitly, implicitly motivating your people to cut corners, that's what you're doing, and they will. If there's enough pressure brought to bear, right? Why do people engage in ethical breaches? Well, there's a lot of reasons. There's pressure, there's stress, there's career advancement, there are metrics, there are all kinds of interests, right? There's compensation, there's your socialization, there's peer pressure, there's the example of your boss. There are all these factors at work. People are highly, highly influenceable. They're highly influenceable when it comes to ethical behavior. And so if you can pull the clarity out of the ambiguity and say, "This is how we do it here. There's never a wrong time to do the right thing. And we don't negotiate and we don't cut corners, we don't take shortcuts and we keep reinforcing that," most people will adjust and adapt and adopt that ethical standard and they'll be proud of it. That's just an example.

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0:30:06.0 Junior: Well, I want to take a second on the point of what we encourage. And as far as what I would consider to be most useful, it's less useful to communicate what's ideal, what's encouraged, what's allowable and more useful to communicate what's unacceptable. And if you want a litmus test for the organization, how ethical are you? Go and find an unethical act that didn't result in termination and you find enough of those in the degree of those, and that will tell you how your organization is doing.

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0:30:45.8 Tim: That's kinda the litmus test, isn't it, Junior? 

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0:30:48.0 Junior: It is. Okay. So we could go on and on in ethics, but we're gonna move to crust, competence, what you do. And this is on top of the core. This is technical skill, it's expertise, it's talents, it's aptitudes. And we're gonna talk about all of those skills. So if we take those definitions of core and crust and leadership, an alternative to the book title could be based on what we've defined influencing through who you are and what you do. That's really what we're talking about and that's what this series is. And I think that that's an appropriate frame. Is that something that we want to get better at? Do we want to improve our influence? Yes. How do we do that? Well, there are two levers. We have who we are and what we do. So we talked about the fact that not all of these are ultimately developed in every person.

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0:31:37.8 Junior: We don't always have perfect competence and perfect character. There are four main combinations that we wanna lay out. So we're gonna take the next few minutes to talk through those. And then we're going to talk about solution. What are four things that we can do to improve across these areas? So to the combinations, we have what we first call the failed leader, low character and low competence. So these are people that refuse to hold themselves accountable. They ignore feedback. They have virtually no delayed gratification. They have almost no earned achievement. And the one thing they do have, which Tim pointed out, is entitlement. That's the one thing. So any status or position they gain is through favored trading and flattery. I love the way that you put that. So tell us a little bit about these failed leaders, this combination of low, low.

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0:32:31.7 Tim: Yeah, low, low is a very dangerous place, you can't be successful. But you haven't yet got to a place where you're willing to pay the price, right? Leadership, as we'd like to say, Junior, find the price, pay the price. There's a price on leadership and it's not free. And it's a very challenging discipline. So you have to be willing to make that journey. If you are afflicted with entitlement, that's gonna work against your ability to make progress as a leader. Entitlement is a pernicious thing. It's very dangerous to the applied discipline of leadership because you've got to develop capability on the character side and on the competence side and then bring those together. And over time, there's got to be development. There's got to be progress in both of those areas.

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0:33:31.8 Tim: So if you're low, low, you've gotta figure out how to gather within yourself, some influence to put forth some effort. I really don't know what else to say about it, right? But Junior, we see leaders who crave rank, they crave it, they crave rank, why? They wanna hide behind it. They don't wanna pay the retail price of leadership. They wanna get it free. So if they can somehow get some rank, then they might be able to hide behind that and enjoy the benefits and the rewards and the glittering path of leadership or so they think.

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0:34:14.9 Junior: So here are a few more patterns. They crave rank so they can hide behind it. We've talked about that extensively before. They advocate for privilege based on position and connections because they can't claim leadership on merit. So when you pay attention to what these leaders say, they're very easy to snuff out. Counterfeits, imposters, they can be bought. And I like to think they're not usually very expensive. Number two, ineffective leaders, high character, low competence. So this is a good person who lacks skills and usually it's a lack of drive, not intellect. They can be procrastinators, they can refuse to leave their comfort zone. If you do solve for drive though, these leaders get better and better and better over time. It's almost impossible not to if you add the effort piece. So this is an interesting combination to me, and a combination of tremendous potential.

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0:35:13.6 Tim: It is, Junior. And if you can't find the drive, then you end up leading a rhetorical career where you just try to get everything done by talking, 'cause what else can you do? You haven't developed the skills, you haven't paid the price. So you become a rhetorical leader. You've probably met leaders like this, many of you listeners, where it becomes all about talking. That's what it is. It's about connections, it's about networking, it's about rhetoric, but that's not, that's a pretty sorry substitute for leadership.

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0:35:53.1 Junior: One of the patterns that I also see is that they're fascinated by historical achievement. And they'll talk about the good old days and they'll talk about the golden era and they'll talk about this one time we did this one thing and we achieved this thing 30 years ago because nothing's happened since then. And to me, there's a distinguishing characteristic of the leader of 2030. And that will be those who have the drive to keep their learning pace high enough to stay afloat amidst these technological changes. So what does that mean? In my opinion, it means that a lot of leaders are going to be found out in the next five years that we will then lump in the ineffective leader box of high character, low competence, 'cause they cannot keep up because it is a whirlwind right now.

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0:36:44.4 Tim: I love the connection that you've made between drive and learning. Without the drive, you're not going to achieve the learning. And if you don't achieve the learning, you're going to fall behind. And that's just happening faster now, right? 

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0:37:00.2 Junior: Yeah. And if you ask yourself the question, if the drive doesn't go towards learning, what does it go towards? 

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0:37:04.1 Tim: Yeah.

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0:37:04.7 Junior: I don't know. You can go bang your head against the wall forever and you're not gonna learn that that's the wrong wall or that there's a ladder or that you should go around it. And so that's a dangerous, dangerous thing to do. So let's say 40, 50 years ago you get an MBA and you're more or less set for a professional lifetime. And depending on your industry, maybe two lifetimes, that's all you needed. You're set, you got the tools that are relevant and you can just go to work and do your thing forever. And you don't have to learn much more than that. Not today.

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0:37:38.4 Tim: No.

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0:37:38.8 Junior: And some industries, more or less than others, but a long time ago, you don't have to worry about the technological advancement at this rate. You don't have to worry about globalization at this rate or the lens of inclusion and cultural impact and all of these other nuances that have been added to leadership, which in the past was maybe almost purely competence based. So it becomes really interesting to me that the nature of where we are today has an effect on leaders that in the past it absolutely has not. So this one I think we need to really pay attention to. And here's an operating assumption for you that I think is an appropriate lens. Just assume that you're in this box. If you know that you're high character, just assume that you're low competence, because what's the other assumption? The other assumption is that you're high competence. And that's a good assumption, I think for confidence, for taking that next step into the fog. There's some utility there.

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0:38:38.0 Junior: But it's probably better to approach it from the expectation that there's more that I can learn and maybe it's not that you have low competence, that's not maybe the appropriate expectation, but just understanding that there's a deficit always between where you are, your current skillset and where you could be and where you arguably should be in order to achieve whatever it is you're after.

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0:39:02.2 Tim: Yeah, I agree with that, Junior. There's a gap, and you should always be working to close the gap.

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0:39:08.8 Junior: So here's the next one. Dangerous leaders, low character, high competence. Here's a quote, Teddy Roosevelt, "Courage, intellect, all the masterful qualities, serve but to make a man more evil if they are merely used for that man's own advancement." And Buffet, "In looking for people to hire, you look for three qualities: Integrity, intelligence, and energy. And if they don't have the first, the other two will kill you."

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0:39:30.3 Tim: I love that quote.

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0:39:31.5 Junior: These two quotes are amazing. They're amazing. And in the Buffet quote, if you don't have the first, integrity, the other two will kill you. Intelligence and energy. So how do we get killed by the other two? Because the first one can be hard to screen for. It's a lot easier to look at energy, right? To get a sense for someone's energy than it is to get a sense for someone's integrity. And if they are highly intelligent and have high energy and they're incentivized to move up, they can probably hide the integrity a little bit better than people can hide the energy or intelligence if they have the integrity. So this one, I think is very fascinating and obviously that opinion comes from some experience, some perspective.

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0:40:19.7 Tim: Right, right.

‍0:40:20.9 Junior: So we talk about the dangerous hires, and I just wanted to call out to the charisma hire. We talked about this in a couple of LeaderFactor notes and podcast episode here and there. But these can be high EQ folks relative to the awareness and influence skills, but with poor intent. So the charisma hires often lurk in this category of dangerous leaders. It's not causal, and it may not even be correlated, but I've seen a little bit of a pattern here that I think is worth calling out, that often that charisma can hide some of what's underneath that they don't want you to see. Not always the case, but worth calling out I think.

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0:41:01.5 Tim: Junior, I've done this twice in my career where I made two big charisma hires. And I can't tell you the buyer's remorse that I had after. I can't tell you how painful it was to go through the process and then finally move these folks outta the organization. The charisma was blinding. It was intoxicating to the point that we, I was no longer being truly objective and dispassionate and impartial in looking at them as candidates. And I allowed myself to be influenced by the charisma. And wow, did we pay a price? So that one hits close to home for me.
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0:41:43.6 Junior: Finally, the category of great leaders, high character, high competence. This is what I think we should all aspire to be. Healthy intent and skills to make an impact. We should be trying to improve in both of these categories all the time. So how do we improve? I mentioned at the beginning that we'd give some tools, some tips, some perspective. And we wanna start off with the iron law of personal development. This comes from Tim. All sustainable personal development is based on a transfer of
ownership to the individual. So this is something that we have to do for ourselves, sometimes by ourselves, and we can't wait for institutions to help us along, for coaches to help us along, bosses, friends. At the end of the day, the onus lies with you, with me to be able to recognize these gaps and then move forward. So the gap leads into the first, which is self-awareness.
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0:42:42.1 Junior: This is the first trait of the three that we're going to talk about that we believe to be very important, if not the most important. So self-awareness, what's the definition? The capacity for introspection and the ability to recognize oneself as an individual separate from the environment and other individuals. So this speaks to that gap. We need to be able to perceive that gap. If you don't perceive a gap between where you are and where you wanna go, then there's almost nothing that you can do at that point. So this is the most upstream trait in my opinion, that you could possibly develop. Because at some
point, even when you're a child, you recognize, "Oh, I'm crawling, that human over there is walking. I'm not, they are. I'm gonna do that," right? They're feeding themselves, they're using these words, they're communicating. And that's obvious all the way to today where we need to be able to do the same thing with more nuance. "Hey, there's a gap between where I am, where I wanna go, what do I need to do to close that gap," right?
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0:43:49.9 Tim: It's very true, Junior. If you don't have some bearing points to comprehend your position, you can't get better. You have to understand your current state, and you have to understand it honestly, clearly, truthfully. And then you can say, "Oh, I have an aspiration to get better," as you say and then we can get on that journey. But it all begins, that entire journey does begin with self-awareness. And then we can go from there.
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0:44:23.3 Junior: Once we develop that self-awareness, there are a couple other traits that we want. The next one I wanna call out is continuous learning, and then we'll get to the third. Continuous learning, what is that? It's acquiring new knowledge, skills, and competencies throughout life, and not just informal educational settings. So we talked about this learning disposition. Tim, what do you think about this one? Continuous learning.
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0:44:49.7 Tim: Oh, I feel so strongly about this. I had a professor at Oxford and he gave me the best single piece of advice that I ever got in school. He said, "The most important thing you can learn in school is how to learn when you get outta school." And that piece of advice has been true. There's been confirming evidence over time. What that translates into at an individual level is that, I have to become, you have to become an aggressive self-directed learner. Your learning disposition and your learning habits
should indicate this continuous learning. But often we don't see that. We see people who are on learning welfare. What does learning welfare mean? It means that you're waiting around for the institutional machinery of the organization to carry you along. The locus of control is outside of you. Well, how can you manage a career on that basis? It makes no sense. But you're transferring your agency and you're transferring ownership to an institution to carry you along. Sometimes, you're going to get a lot of support. Sometimes you're gonna have a good boss. You'll also be exquisitely blessed with the opposite, guaranteed that's going to happen. And so you have to take full ownership for that continuous learning. Don't go on educational welfare. That's what I've learned.
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0:46:19.9 Junior: Well, each of us has our own learning trajectory, and we want that to be up and to the right where we've got learning in time. And at some point, you can see this, there's an arc for every human. Think about everyone you've ever met and think about their historical learning trajectories on that path. And you can see that some people peg out at like 20 or maybe 30, or maybe they go all the way to 70 and then it goes down. Ideally, that's up and to the right and then you die. But sometimes, and often, it's a tragic thing. It stalls out way too early and you have this tale that lasts like 50 years. And to me, that's a tragedy. And so, what can we do to keep that thing going up? And it's not gonna be a straight line, and we might have some stagnation and we might need to unlearn some things, and we need to just continue.
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0:47:16.1 Junior: And so what does that mean? There are so many things that we can do every day. Access is unlimited. And if you think about the curve of people's learning, at least in terms of pure information, there's a reason for that. Now, there's no reason for that because access is better than it's ever been. So there's really no excuse when it comes to competence and skills. It's an open book. You need an internet connection, and you're good to go. And so reading, workshops, online courses, feedback from other people, there are so many things that we have access to today. So there's really no excuse here. And so, think about your own curve, your own trajectory. If you're in a stall, what can you do to just get a little bump? Start that up again. Keep the engine going and moving, moving, moving. Especially in a professional setting, if you don't, as I said, over the next five years, a lot of those leaders are gonna get found out whose learning trajectories have stalled out.
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0:48:14.2 Tim: Junior, let's frame that out a little bit. You mentioned that the biggest single obstacle to education and learning for all of the previous centuries was what? Access. Access was the biggest single obstacle. Today, that obstacle is not access, it's motivation. Motivation is the biggest single obstacle to learning in education. What a change.
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0:48:38.8 Junior: I won't even say motivation, I wanna disagree with you. It's just action. And yeah, there needs to be some motivation that like just motivation is a flash burn, right?

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0:48:51.2 Tim: Yes.

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0:48:51.4 Junior: And it can get you going maybe one time or two times, but we're talking about an entire lifetime. What can motivate you such that you would act every day deliberately to keep that curve moving? It's that just step to open a browser... I mean, think of the AI tools you have at your disposal today that didn't exist six months ago.

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0:49:16.6 Tim: Yeah, its unbelievable.

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0:49:16.8 Junior: It's unbelievable.

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0:49:18.3 Tim: As a learning tool.

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0:49:19.7 Junior: As a learning tool.

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0:49:21.0 Tim: Yeah, it's absolutely incredible.

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0:49:22.4 Junior: Think about how that's progressed in six months, the last six weeks. Extrapolate that rate of change into the future, and there really will be no excuse. So that one's huge, continuous learning. So the last one, authenticity. This might sound weird. In a group of three things, why would we choose authenticity? And I wanted to end here. So what is authenticity? It's the quality of being genuine, true to oneself, and not pretending to be someone or something that you're not. You're comfortable in your own skin. This one I think is so important for leaders because humans are so good at smelling intent. And so, if this isn't there, if you're tryna fake something, if you're tryna be duplicitous, even surface, you're gonna lose people.

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0:50:18.5 Tim: Yeah. You're gonna lose people and they're not gonna hang with you today.

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0:50:20.8 Junior: No. You need to be able to present yourself in all your imperfect glory, all of your
flaws.

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0:50:26.6 Tim: That's right. And I think Junior, the reason that we're putting this forward as the final recommendation is because we already know that insecurity is the universal condition of the human family. We know that. But if you're in an environment that's so dynamic and changing all of the time, how can you be comfortable as a leader in that environment? You're not going to be on top of everything all the time. You can't subscribe to the leader as expert model. You can't be the oracle, you can't be the
repository of all the answers. And so, how can you be effective? You're not gonna be on top of it. Somehow some way, you've gotta figure out how to be accessible, how to be relatable. People have to be able to connect with you. And if they can't, they're going to disengage and you will not have their hearts and minds. I think that's why it's so important at this point.
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0:51:33.9 Junior: Part of what helps me understand authentic is what isn't authentic. It's any sort of pretense. So think about the word pretense. Think about being pretentious. What does that mean? It means that we're tryna put pre before, we're tryna put all this stuff out into the universe to like shift people's perceptions a certain way, right? There's all this stuff, this fluff that we try to put out to like shift the way that people are perceiving us. Instead, what if you just showed up and said things like, "I don't know the answer to that question. It's a great question. Hey, I realized that I'd absolutely messed that up. I'm so sorry. I'm tryna get better in this area, and I made a mistake. Can you help me out with this? Hey, I had a really... Last night was tough. I was working on this project and this thing happened and I wasn't sure what to do about it." Think about those. Think about how you're responding. Even to me just saying those things, you're probably thinking like, "No, it's okay. Like, hey, we can figure this out. Hey, thanks for telling me that. Hey, I appreciate that. Hey, let's do this."

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0:52:42.0 Tim: Yeah, it's ironic, Junior, that the courage of vulnerability makes you a more powerful
leader.

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0:52:48.8 Junior: Yeah.

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0:52:49.2 Tim: So lose the hubris, right?

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0:52:52.0 Junior: Yeah.

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0:52:52.4 Tim: Let's lose that.

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0:52:53.0 Junior: Yeah, it's a hard thing to do.

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0:52:54.9 Tim: Yeah, it can be hard because the insecurity is there and we all have it. We're all insecure. But I think that step by step, we can overcome that and present ourselves with all of our flaws and our weaknesses. But it's okay because people can see the strengths as well, and they can relate to us, and they're willing to go into battle together.

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0:53:24.8 Junior: So those are the three. Self-awareness, continuous learning, and authenticity. Now, our invitation to you is to take these three things into the subsequent episodes as you join us in this series. And if you do those three things, if you come with some awareness with whatever you have, and hopefully the intent to develop some more and a learning disposition to try and pull some things out of these episodes that you can go apply, and then the lens of authenticity to go and apply them, which is going to take some vulnerability, then I think we will all come out better leaders. So as we mentioned at the beginning, this is part one of a series on character and competence. So in the subsequent episodes, we'll be taking this frame that we've kind of built out today of core and crust, character and competence, and diving deeper into each.

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0:54:18.6 Junior: So the core is made up of four cornerstones, and this is the next layer, integrity, humility, accountability, and courage. We're gonna be talking about each one of those. And then in crust, there are also four cornerstones, learning, change, judgment, and vision. So you can see we're talking about character, these core components and then we're gonna get into some skills which are very, very important. And if we can develop, get even marginally better in each of these four cornerstones across core and crust, we're going to be better leaders. We'll be able to have a better, healthier influence, and we'll be able to do that at better scale. So if that's something that you're interested in, then join us in the subsequent episodes. I'm really excited to kick off this series. Tim, any final thoughts?

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0:55:06.3 Tim: I'm really excited for this series. As you mentioned at the beginning, Junior, leadership is the most important applied discipline in the world. It's a factor in every decision and every outcome. No other applied discipline can make that same claim. So I think it's worth our attention. It's worth our effort. It's worth wrestling with this and trying to get better.

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0:55:29.8 Junior: Well, we're excited for this to join you in this journey on the mini journey across a few podcasts, and that's great. But on the macro journey of becoming a better leader over years, over a very long period of time. So thank you everyone for your time, for your attention. We appreciate you and your listenership. We're thankful for all that you do in the world, and we're here to support you. You can always reach out to us at leaderfactor.com. If you'd liked today's episode, please give us a like, a review, share it with someone who might find it valuable. And with that, take care everyone. We'll see you next time. Bye-bye.

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0:56:12.7 Producer: Hey, Culture by Design listeners, this is the end of today's episode. You can find all the important links from today's episode at leaderfactor.com/podcast. And if you've found today's episode helpful and useful in any way, please share with a friend and leave a review. If you'd like to learn more about LeaderFactor and what we do, then please visit us at leaderfactor.com. Lastly, if you'd like to give any feedback to the Culture by Design podcast or even request a topic from Tim and Junior, then reach out to us at info@leaderfactor.com or find and tag us on LinkedIn. Thanks again for listening and making culture something you do by design, not by default.

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