New research suggests that to achieve the highest levels of performance, leaders need both character and competence.

What qualities does a leader need in order to impress his or her followers and to be effective in business contexts? Sharp judgment? Strategic thinking and planning? A results-focused mentality?

What about virtue? Does it make your list?

Is virtue a leadership asset or a leadership liability?

For many people, the word “virtue” has a high-minded, serene ring to it. It sounds nice, but not hard-nosed enough to help leaders make the tough decisions and difficult trade-offs they encounter every day.

Long ago, Niccolò Machiavelli expressed this same opinion. He argued that a leader "who wishes to act entirely up to his professions of virtue soon meets with what destroys him." Of course, he thought leaders should still try to look like people of character, when possible. But if they take virtue too seriously and treat it like anything more than window dressing, Machiavelli claimed, it will become a serious leadership liability.

It’s safe to say that Machiavelli has many adherents today, and most of whom aren't evil geniuses, ruthless dictators, or criminal masterminds. These everyday Machiavellians are our friends, bosses, and coworkers. They don’t believe leaders should be evil. They just think that when it comes to effective leadership, character doesn't count.

Are they right?

Character Counts: How and Why

Fortunately, we can prove that character does count—in part because we’ve become much better at counting it. In 2004 psychologists Christopher Peterson and Martin Seligman presented a comprehensive and measurable set of character strengths that they formulated after a thorough analysis of lists of virtues in cultures around the world.

In 2012, a study by John Sosik, William Gentry, and Jae Uk Chun was able to take the list Peterson and Seligman developed and use it to measure the integrity, bravery, and social intelligence of 191 senior executives. They sourced these ratings not from the executives themselves but from their direct reports. Then they surveyed the executives’ bosses and board members about the executives’ job performance. The researchers discovered that executives with more highly rated character strengths also had high performance ratings from the bosses and boards.

Sosik and his colleagues were not just able to prove that character matters, they were also able to prove that some character strengths matter more than others. Integrity, they found, made the most difference in executives’ performance ratings. “Without integrity,” they write, “executives are not likely to make sound decisions and receive the levels of trust, support, and communication from associates required to exert effective social influence within organizations.”

While “character may be grounded in integrity,” additional studies by Sosik and his colleagues have identified other virtues that help put character into action. A 2014 study affirmed the value of integrity both for a leader’s performance and image and also showed that courage was necessary in order for integrity to have an impact. Similarly, a 2019 study of over 200 U.S. Air Force officers found that self-control—which Roy Baumeister calls “the moral muscle”—serves as a catalyst: Only when officers possessed self-control as well as character did their character lead to improved leadership, performance, and psychological flourishing.

The conclusion is clear: Contrary to the idea that character is a leadership liability, character and competent leadership go hand-in-hand. In fact, one recent study by Rachel E. Sturm, Dusya Vera, and Mary Crossan proposes that the act of intentionally bringing character and competence together is the key to leadership development. Sturm and her colleagues write that although “leaders lacking depth of character may build on their current competencies to achieve (short-term) results, extraordinary performance is rooted in highly-developed character and competence that are entangled” like the two strands of a DNA double helix.

Of course, a leader’s character has a wide array of other benefits as well. Character helps leaders manage risk. It also translates into ethical outcomes and an improved reputation for his or her organization. And since ethical behavior has a tendency to trickle down, a leader’s virtues don’t just improve his or her decision-making; they also cascade down the organization’s hierarchy and can influence the decisions of employees at all levels.

Put it in Practice

Recruit and promote ethical people.

It’s not just the case that ethical people help your organization avoid the penalties and reputational damage that come from scandals. (Even Machiavelli could recognize that benefit!) Ethical people are also more effective leaders, and for this reason it makes sense to use ethics as one of your main criteria in the recruitment and promotion process, even—or especially—for senior leaders.

Tom Mendoza recommends asking the person you’re interviewing, “What is your biggest failure and how did you respond to it” to get a sense of their ethics and values. For more information, download our free guide to prioritizing integrity in the recruitment process.

Target character as you develop leaders.

Leadership development is a $366 billion industry. But many organizations fail to make ethics an explicit part of the process. (They tend to focus instead on things like strategic planning, business acumen, emotional intelligence, innovation, and coaching ability.)

Nevertheless, character strengths are malleable. We can improve them over time. So leadership development can and should include character development. Although studies reveal that developing moral character is not a top priority for most people, it can become one. Start by identifying your character strengths and reflecting on your progress toward developing just a few at a time.

Grow character in “crucible moments.”

In one recent survey, more than two thirds of executives reported that coronavirus has presented them with the biggest challenge of their career. The tragedy of the crisis notwithstanding, it's important to remember that “crucible moments” are a key way we forge our moral character. Although our current crisis is causing considerable moral stress for leaders, it can also provide them an opportunity to develop the qualities that will help them and their organizations emerge from the crisis with new strengths.

In fact, a recent increase in remote work may bring us the chance to boost integrity by bringing our “home selves” and “work selves” together. As Sturm and her colleagues put it, “leadership is constructed in both economic life (i.e., the workplace) and in social life (i.e., non-work arenas, such as in a marriage) [...] In this sense, life experiences, interpersonal relationships, and communities of practice, provide opportunities to develop and bind the habits of character and competence.”