Editor’s note: Kelly Campbell is president and co-founder of Interface Technologies in Raleigh and vice president for technology of the Association for Corporate Growth’s Raleigh-Durham chapter.

RESEARCH TRIANGLE PARK, N.C. – Dr. Peter Rea, featured speaker at the May meeting of the Raleigh Durham Chapter of the Association for Corporate Growth (ACG) and co-author of two books on leading and growing companies with integrity, sees many similarities between the military and businesses.

Tthe director of Baldwin-Wallace College’s Center for Innovation and Growth began his presentation with a military acronym: VUCA. VUCA describes Volatile, Uncertain, Complex, and Ambiguous conditions or situations.

The military faces a real challenge: they can’t control young officers from Washington. Officers are picked carefully. They need to be innovative and team builders. Most importantly, according to Rea, the military has to trust its officers because they can’t control them.
Rea asserts that businesses face similar situations and challenges.

Executives often bring in strategists to help change a company. Rea maintains that by focusing on the classical virtues you can change the leaders. In his experience, the quickest way to change a company is to change the way its leaders view the organization.

To illustrate his position that the classical virtues are relevant in today’s organizations, Rea described how human capital accounts for 70 – 80 percent of the expenses in a typical knowledge based company. Yet in many companies only 20 percent of its employees are engaged. Likewise, the book value of a company is typically only about 25% of its market value. Most of the economic value of a company is intangibles: brand, reputation, leadership, ability to innovate, and so on.

For Rea, classical virtues are key growth drivers because the greatest asset of companies – its people – and the bulk of companies market value are driven by intangibles that can be influenced by the classic virtues of prudence, temperance, courage, justice, love, hope, and faith.

Take faith for example. The root of the word fiduciary is faith. The business role of a fiduciary is to look out for the interests of others as if they were you own. Faith can also be equated to trust. With the emergence of social media channels, companies can no longer control the discussion around their brands. Rea believes that for companies to have a social license to operate, they have to integrate performance with purpose.

As trust in a business or industry drops, regulations go up. And while a balance is needed, Rea stated that a lack of trust is costing companies a lot of money in regulatory overhead.

In terms of managing a brand, look at what you do well. Be authentic. Rea maintains that people are more likely to trust and believe your brand if you admit the good and the bad. Trust goes up when you are open about what you don’t do well.

Rea described how ethics in business has been equated with compliance. According to the classical definition, ethics means character. The goal for companies today is to create a culture that encourages people to behave as they know they should. How do you encourage people to do what’s right when they are scared? How do you drive the fear out of an organization?

Rea defined courage as leading through and adapting to change, and taking risks. Courageous leaders must also come to grips with their own weaknesses and vulnerabilities.

Rea asserts that is fairly easy for companies to define a strategy. The more challenging part is getting people on board with the new direction.

Passionate people are more likely to take on a challenge, more likely to have a broader social structure, and more likely to persevere.

Engagement occurs when:

• The values of the company and the people are aligned,
• Then people take pride in being a member of the organization,
• And step up and go above and beyond the call of duty.

Rea believes that people are looking for more than just success. They want significance, as in “What am I doing to make the world a better place, not just make a buck.”

Why is engagement so important? Rea shared how studies show that:

• 40% of people are disengaged when they are ignored
• 20% are disengaged when they only receive feedback on their weaknesses
• 1% are disengaged when their leaders focus on their strengths

Rea closed with a challenge to the audience. Think about your own culture and leadership responsibilities, how do you think integrity could increase employee engagement and lead to more intelligent risk taking?

(c) Kelly Campbell