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The term “growth companies” conjures up the image of highly focused, driven leaders, unwavering in their commitment to the organization, holding others accountable and making no exception when results fall short. It would be a mistake to say those driving qualities don’t matter to growth. What we discovered though, is that these qualities are not the differentiators. In a phrase, those harder-driving execution qualities that we assume will get the job done are table stakes. The growth formula is better defined by the human side of leadership – qualities of a leader’s credibility and character.

Why Many Leaders Struggle to Drive Growth

Growth requires change, leaders must make choices, and often, all of this creates a measure of chaos. To navigate this uncertainty, leaders with a mandate for growth tend to call on others to push forward. They expect more, demand more, and sometimes resort to a tough leadership style that punishes people when results fall short. In the extreme, hard driving leaders who do not demonstrate other qualities of Character we’ll talk about here can foster an environment that prompts unethical behavior. There are too many news accounts of overly exuberant, competitive executives who’ve turned their back on ethics to achieve short-term gains. Rationalizing unchecked hard-driving behavior is putting the end ahead of the means, and will get a company in trouble.

Yet, unethical behavior isn’t the only consequence. Organizations that don’t understand the human leadership qualities that it turns out are linked with growth are doomed to underperform, even when they have talented people, good products and the best intentions. The risk is they may unwittingly hire and promote leaders with only the harder-driving behaviors, and be surprised when financial results don’t materialize. Results-focus is an admirable attribute in a leader – however that alone will not enable the leader to deliver on the growth promise.

We found through careful, statistical analysis that leaders in high-growth companies have differentiating ways of approaching leadership, that cause others to trust them, lean on them, and rely on them to establish calm in the face of uncertainty. These leaders exhibit qualities that inspire people’s best efforts, focus their energies, and rally them to go above and beyond. It’s no exaggeration to say these leadership qualities are an ace-in-the-hole that set a company on a smart path to growth.

Profile of a Growth Leader

Let’s look at the profile of Kevin, the COO of the multi-national technology company we met earlier. Kevin completed an assessment, the Bates ExPI™, which measures qualities of presence we know from research enable leaders to engage, align, inspire and move others to act. The assessment is based on the Bates Executive Presence Model, organized in three dimensions, Character, Substance and Style, with five facets, or qualities, in each dimension. (See Figure 1)

Kevin is highly rated by peers, direct reports and other groups in qualities we have learned are associated with growth, including Integrity, Authenticity and Practical Wisdom. These, among the 15 facets of executive presence, as well as Composure and Vision, are those more frequently associated with leaders of companies growing at rates of 5% or more above GDP annually.

Kevin is among thousands of leaders who have completed the Bates ExPI. In the aggregate, we have analyzed almost 14,000 responses. We found in this study that one of the Character qualities most closely associated with high growth is Integrity.

Why Integrity?

Every leader knows Integrity matters, and most would say it is core to their identity. Like all the qualities in the ExPI model, we measure others’ views of the leader’s Integrity with six different items, or questions. These items measure behaviors, distilled as short statements. We ask participants to rate leaders on each statement, with a Likert scale ranging from 1-5, from strongly disagree to strongly agree.

In the case of leaders in growth companies, five of the six Integrity items are clear differentiators. Kevin’s raters (peers, direct reports, board members and customers) rated him well above the mean in Integrity. And, he received the highest score possible (5.0) from his CEO, peers, and near the top score possible from all other groups who evaluated him on the question of “honesty and promise-keeping are huge for him/her.” Figure 2 shows Kevin’s scores on the 6 items by all groups of his raters. It is interesting to note that Kevin’s scores on these statistically significant behaviors are even higher than the average high growth leaders.

The people who “rated” Kevin also provided comments in an open-ended section of the report, and it is here where we get an even better view of how others see his Integrity. Typical comments were: Kevin “is very ethical, of high integrity and can be completely trusted,” that he “displays a high level of consistency between what he says, he believes and what he does,” that “he will fight to maintain his values and is willing to put himself at risk for what is right,” and that his “truthfulness is the foundation of his integrity.”

No leader in a global company is solely responsible for growth, but we know through years of consulting in Kevin’s organization that his leadership qualities are admired and often emulated by others in key roles. His leadership attributes are acknowledged as a key factor in the organization’s success. His scores illustrate how data analysis reveals difference makers for leaders in higher growth companies.

What it Means When Integrity is High

Integrity is defined in our model as “acting with fidelity to one’s values and beliefs, living up to high standards of morality, veracity, and promise keeping.” The ExPI assessment measures two types of Integrity – moral and behavioral. Moral Integrity is upholding values and standards, playing by the rules, and doing the right thing, even when it may cost you dearly. Behavioral Integrity is doing what you say and keeping your promises.

Leaders are sometimes surprised when people around them give them less than stellar scores in Integrity. It’s important to know that the ExPI assessment is designed to give the leader a view of how others see us. It measures how they see our behaviors, not our intentions or capabilities. Sometimes, we act in ways that are not necessarily aligned with our intentions. For instance, when we are juggling competing interests and priorities, we are not always aware of what our choices and actions will say about us and the impact that has on others.

A simple example of this is the busy leader who becomes known for frequently canceling staff and one-on-one meetings. The leader believes others understand his or her intention is to attend to something more urgent or important. However, those on the other end of the cancellation notice see it as a broken promise. They are counting on scheduled time with the leader so they can do their jobs, get input, resolve problems, and meet their own commitments.

So, how does Integrity connect back to high growth? Integrity, like other Character qualities, facilitates and affirms trust. When we’re trying to grow a company, results are not assured, and we look to the leader to guide us. If we believe not only that the leader is on the right course, but also doing the right thing, we trust that leader. We form stronger bonds with the leader, and work harder when the going gets tough. We commit with heart and mind, in part because we believe the leader will not sacrifice principles for profit.

Leaders are human and make mistakes. Integrity is the lens through which others view a leader’s missteps. When they trust the leader, they are more likely to give him or her the benefit of the doubt. They won’t abandon the goal.

Our finding that Integrity is a key element in growth companies is important because it shows this aspect of leadership isn’t simply a “nice to have” element of a positive workplace culture, or even insurance against ethical breaches. Integrity and growth travel together.

What Else Matters in Companies with Higher Than Average Growth?

Our analysis found other facets of executive presence are stronger in leaders in high growth companies. We narrowed down the field by looking at specific behaviors within the difference-making facets. Each behavior is measured by an item in the assessment survey.

Out of 90 behaviors, 29 had statistical significance – high growth leaders were higher rated by the peers, direct reports, manager and directors of leaders in growth companies. Sixteen were in the realm of Character, nine in Substance, and four in style.

Further, Character qualities overall are the biggest differentiator in growth companies. Sixteen out of 29 behaviors that differentiate for growth, or 55%, are in the Character dimension.

Why we developed the Bates ExPI

Our research is based on a new model of Executive Presence, which we developed in 2014 and validated through an independent panel of respected management psychologists and experts in leadership, and proved later to have exceptionally high reliability through Cronbach’s Alpha. Our intent was to address an area of leadership, executive presence, that has long been a mysterious X-factor in conversations about succession and leader development. We thought it was insufficient to tell leaders they needed to develop presence without a clearly defined set of data and accurate feedback.

We developed a science based definition and model that would provide accurate data and insights by measuring behaviors, and asking others to rate the leader, since executive presence is in the eye of the beholder. It’s all about how effective that leader is, in each situation. We define Executive Presence as the qualities that engage, align, inspire and move people to act. The model and accompanying assessment, the Bates Executive Presence Index (ExPI™) is now established and used in 16 countries and by dozens of global companies.

Figure 4 showcases the “high-power 4” – the subset of the super 9 where not only do high growth leaders excel, but low growth leaders perform significantly below average, making them a point of true leverage. When leaders wish to understand how to improve their own presence and deliver on high growth, a good guide is to review their scores against these super growth-supporting strengths. And, organizations looking to accelerate business growth can look at the aggregate profile of leaders in their organizations, and compare the highs and lows to our data, to identify gaps in these key behaviors associated with high growth.

A Second Differentiating Character Factor: Authenticity

After Integrity, the next facet in the super category is Authenticity, defined by our research as the quality of being real, transparent, genuine and sincere in one’s relations and interactions with others. Kevin, the COO of the multi-national technology company experiencing high growth for more than a year and a half, rated highly in Authenticity as well. He received an overall 4.53 from all raters with several groups giving him the highest possible score of 5.

Specifically, Kevin had exceptionally high scores in the two behaviors of Authenticity we measure that turn out to be most differentiating in leaders of higher growth companies. “Sincere, I can take what he/she says at face value” was among his highest items in the Authenticity facet, as were his scores on “there is nothing fake or phony about him/her”.

These sentiments were reinforced in survey comments such as this one: “Conversations and interactions (with Kevin) always feel very real and genuine. I appreciate that he will always give a truthful, straightforward answer. I also appreciate that he shares learnings from his own experiences – I personally have learned a lot from him in formal and informal conversations”.

How Substance Distinguishes High Growth Leaders

By now it’s clear that Character matters to differentiating leaders of high growth companies, but what about the next dimension of executive presence, which is Substance? Substance qualities are those we learn on the long journey of leadership. They are the hard-won qualities that come with maturity, and give us credibility with others. Many of them are connected to social and emotional intelligence. Substance can be viewed as the acquired ways of being and performing as a leader; not mere cleverness, but established approaches to situations. The most important of these in leading a growth organization is Composure.

Composure: Essential to High Growth Leaders

In today’s business environment, Composure is a sought-after, yet elusive quality in leadership. We can perhaps attribute this to the speed of change and the level of uncertainty we face daily in a fast-paced, global business environment. Composure qualities tend to be rated among the lowest in all our data – it’s an area that leaders have long struggled to developed.

Case Study: The Challenges of a Low Growth Company

Lower scores in Composure may negatively impact growth. We learned this not only through the data but by examining groups of leaders, including a group in a multi-national defense and commercial aeronautics supply company. Figure 5 below depicts the aggregate ratings of a group of senior leaders from across the company. As you see in the data, the group as a cohort was rated highly in Integrity – a positive difference-maker in growth. Twenty-one out of 23 participants had Integrity among their top five strengths, represented by the green bar. That was the good news.

Unfortunately, Composure was significantly low for this group. Thirteen leaders (represented by the red bar) had Composure in their bottom five lowest rated qualities, and most others in the cohort (all but 2) were flat, neither high nor low. On the first day of a development program, this was a startling revelation and became a call to action.

The leaders, presented with this profile, immediately identified the low scores in Composure as an impediment to their ability to deliver growth. While they were not surprised to hear how people viewed them, they were dismayed to come face-to-face with the impact they were having on others. All led major businesses and functions and reported to the senior executive team.

The Role of Practical Wisdom

As a 25-year veteran of the organization, Kevin has led most businesses and several geographies. While broad business experience is often mentioned in leadership competency models, it stands to reason that not all leaders benefit equally from those years in many leadership seats. Some more than others develop applied wisdom, a way of quickly analyzing and helping others get to the heart of a matter. Kevin is regarded this way – he has a way of looking at problems with perspective and maturity. This is measured in the facet of Practical Wisdom, which is most distinguished by the ability to guide others to focus on the right things.

Our analysis revealed leaders of growth companies tend more than others to offer keen insight, sound advice, and judgment on business decisions affecting stakeholders. This is most often demonstrated by a leader’s strength in asking great questions and distilling what is relevant.

A way to think about Practical Wisdom is not as “book-smart” but rather, crystalized intelligence and applied experience. It is hard-won, and therefore earns the leader credibility. It is most powerful when the leader prompts others to focus on the critical.

….and the Laggards Fall Way Behind

As the stories of Eric and Kevin illustrate, it isn’t just that high growth leaders exhibit certain strengths in the ExPI data: low growth leaders perform quite poorly in these very critical areas for growth. In the Character realm, the greatest spread between high growth and low growth companies is in “sincere, able to take him at face value (Authenticity) and “guided by a strong internal code” (Integrity).

In Substance, the greatest differences are “prompts a thoughtful attitude and objective perspective” (Composure) and “exercises sound judgment on decisions affecting stakeholders” (Composure). In low growth companies, we saw especially low scores – statistically below average – in 17 of the 29 significant items, with 15 of those in Character and Substance. (See Figure 6.) Many of the items where leaders in low growth companies need to develop are in the social and emotional realm; needing to be aware of their emotions, thinking before they act, understanding how others feel about issues, and being a source of stability when others are flustered. They also lagged in some aspects of inspirational leadership, such as encouraging others to experiment and try new things, and helping people find common cause to accomplish challenging goals.

What Role Does Leadership Style Play in Growth?

Let’s turn to Style, the third dimension of presence. Style is a way of doing things – the active, iterative ways we communicate and get others to get things done. We often refer to the Style facets as the facets of “execution.” It would be reasonable to assume at first blush that execution would be essential to growth, but as it turns out, most of the items in this realm are not differentiating. Why? After all, no organization will be successful at anything without leaders who can execute!

We can theorize that leaders in lower growth companies may not show up looking as “ready for the game” when the pressure is on to deliver on growth. It may also be they are unaware of the impact and importance of appearance – the lackluster non-verbal message conveyed about their readiness to lead.

The other item in Style that was statistically significant in low growth companies was “recognizes when conflict becomes destructive or chronic and intervenes swiftly” (Assertiveness). Assertiveness is a quality of leadership that is often misunderstood. We define it as “speaking up, valuing constructive conflict, and raising issues directly without shutting others down.” There’s a balance to Assertiveness in the Bates Model of Executive Presence – understanding how to encourage hearty, constructive debate, while not shutting people down or allowing disagreement to become disagreeable.

Our growth leader Kevin’s scores on that item were above the mean at 4.41, with all but his boss scoring him even higher. By contrast, low growth leader Eric’s scores were slightly below the mean at 4.00, with peers rating him even lower at 3.88. About Eric, people wrote “stifles openness in teams or groups he interacts with,” “makes directives vs. engaging in dialogue that can lead to a collaborative decision,” and “this tendency occasionally causes people to disengage, even when they have key information to share or key questions to ask.”

Why These Insights Matter Now

Growth matters more than ever. The future of many, some may say even most, prominent, long-successful public companies is not assured. Even vibrant new companies are at risk of growing and then flaming out. Turmoil – economic, organizational, geopolitical – is our new reality. Given these new conditions, executives must learn a new way to guide organizations to sustained and notable growth, or risk irrelevance or even extinction.

The winning formula we offer for leading growth is in some ways intuitive. Who wouldn’t acknowledge that Character matters to leadership? Yet what is incontrovertible through this data is that it matters to growth, although this style of leadership is not how many organizations approach the growth challenge.

We would advocate for making the path concrete, by bringing research, analytics and metrics to the conversation on the leadership qualities that are associated with growth in a differentiated way. Corporate leaders and boards are racing to construct models for growth. The case is inarguable for including an innovative, fresh approach to evaluating and developing leaders. The hard-driving, results-oriented leader is highly valued, and those qualities matter, but as we’ve shown, they are table stakes.

Against a backdrop of perpetual change, leaders in high growth companies are trusted, reliable, calm and wise. They create an environment that enables others to traverse the emotional ups and downs of growth, engage, and give their all to the enterprise. This takes the Character of the leader out of the realm of “nice-to-have” and puts it squarely into the must-have category for growth companies. What steps will you, and your organization take, to map the leadership path to growth?

A Word about the Bates ExPI: A Global Assessment and Our Research

The Bates ExPI at this writing has been adopted by companies in every industry and is used by coaches and consultants in 16 countries. The model is based on research in the English language, in the fields of leadership and management, communication theory, social action theory, psychology, philosophy and ethics. We strived to make it relevant to multi-national companies by casting our net widely when it came to global research.

Since launch in 2014, we are growing our database of proprietary assessment results year after year. Employing rigorous methods of analysis, we now can identify an array of trends including growth. Our objective is to connect these qualities of executive presence directly to driving business outcomes. We can say with confidence because of our robust data and solid research methods that the results are clear and approach being predictive of growth.

We do not limit the use of the ExPI to public companies. We included only public companies in this study because we had to use publicly available data to compare to GDP growth. We looked at three consecutive years – 2014, 2015 and 2016. Some companies in the survey were in high growth in one year, and low growth, or absent, the next if they did not meet the criteria.