Positive Leadership: Virtuousness in Organizations


Dr. Kim Cameron is an author and professor of management and organization at the University of Michigan Business School, and a professor of higher education in the School of Education at the University of Michigan. He is going to talk to us about virtuousness in our organizations, positive psychology plus some tools and tips that will help you be your best.

Dr. Cathy Greenberg:  I met Kim at a Linkage Conference this past year, it was the OD Summit. It was a special anniversary edition and I was fortunate enough to be introduced to Professor Cameron by a mutual friend, Dr. Noel Tichy.  Dr. Cameron’s past research on many subjects of importance to leaders including downsizing, effectiveness, quality culture, virtuousness, and the development of management skills have been published in more than 80 articles and 10 books. I won’t go into the list of books, but I will tell you that the latest ones are Leading with Values: Making the Impossible Possible, The Virtuous Organization, and a book he is going to talk about today, Positive Leadership: Strategies for Extraordinary Performance. His current research has focused on the virtuousness of organizations and its relationship to organizational success. He’s one of the co-founders of the Center for Positive Organizational Scholarship at the University of Michigan.

Dr. Relly Nadler: Kim, can you tell us a little bit about yourself and who has influenced your thinking and career the most?

Dr. Kim Cameron:  I have been at the University of Michigan since the mid 1980s so have been involved with some extraordinary colleagues and extraordinary members of the profession, the discipline, who have been both friends, mentors and colleagues. I have a long list of people who have influenced my thinking. Most recently, I left in the mid 1990s and became an administrator. I went out and became a Dean at the Business School and came back in the year 2001. It was since 2001 that I have been most involved and interested in this topic called Positive Organizational Scholarship. That movement was parallel to the positive psychology movement. Interestingly, we didn’t talk for the first couple of years and then Marty Seligman and Chris Petersen and others became both good friends and collaborators and we had lots of interesting opportunities to talk, sitting in conferences and sitting on panels together, so there has been a lot of interchange since that time.

We were interested in Michigan in not so much the positive psychology questions which mainly have to do with what happens in individuals own heads and with individuals personal behaviors. We were more interested in what happens in organizations and what are the routines and practices in cultures that can be developed in organizations to create extraordinary performance. So it’s the organization level of analysis that has dominated my work and my colleagues work in this research center.

Dr. Cathy Greenberg: You know I was so fortunate to be in the audience and to hear professor Cameron talk about positive organizational scholarship issues. Kim, I’d love to know how you got interested in this idea of virtuousness of organizations in addition to this positive organizational scholarship.

Dr. Kim Cameron: I was doing studies, Cathy, for about 15 years on organizational downsizing. It’s difficult to live in Michigan and not be exposed to downsizing. Virtually everyone has been affected in some way by the mass exodus from Michigan especially because of the auto industry and manufacturing and so on. Over a period of time, the major question that I was asking was, “what happens to an organization when it downsizes?” The answer to that question is that performance deteriorates most of the time; probably 85% of the time organizations slide in productivity, profitability, quality, morale and so on. But that leaves 15% or so of the companies who after downsizing, flourish.

Over time, one of the questions that I then began asking was, what’s the difference between the 15% of organizations that flourish and everyone else; what is unusual about those organizations? I didn’t have really good data but I had over the period of time doing all of these studies, begun to form an impression that the difference between the 15% and others was something I referred to as just a virtuous organization culture. That is they were characterized by compassion, forgiveness, trustworthiness, gratitude and so on. Factors that we normally say, well those are kind of virtuous attributes. Well I went and gave a presentation at the Academy of Management which is a professional association of which I belong, and made that case, but I felt like it was very risky because I didn’t have really good hard data, the word virtuousness is not one of those scientifically credible words, and I was just sort of afraid that people would laugh me out of the Academy. But, I said to myself, it doesn’t really matter, I’m going to go become a Dean anyway and I won’t have to come back here, I’ll just be a Dean.

Six months after I gave that presentation I received a phone call and was contacted by somebody who said there is a foundation funding research on forgiveness, the first time anyone has ever been serious about trying to scientifically investigate this concept of forgiveness; and I heard your talk, said this person, you might be interested. So sure enough I sent in a research proposal and was funded to study forgiveness in organizations. As it turns out I was the only non-psychologist, non-therapist who had applied. I was interested in studying what happens in organizations after downsizing; there’s harm, difficulty and loss of trust, and some kinds of difficulties that occur as a result of downsizing, so I thought forgiveness would be a relevant concept.

I was pretty clear in my mind that a single concept like forgiveness, would not in and of itself be a major predictor because forgiveness never occurs in isolation. There is always other kinds of attributes, like, for example, empathy, compassion or even love, or positive self-regard and so on. Those kinds of other factors always occur, I assumed, in collaboration.

Well, for 5 years or so I was a Dean and then I was trying to do the research. Then came back to Michigan, called up the funder and said I haven’t done the study, but would they give me an extension on the research grant so that I can get the research done, and they said absolutely, we want the research done, nobody is doing this in organizations.

So that study in 2001 began this journey of studying virtuousness. As it turns out, empirically, I was right. Forgiveness in and of itself is not a major predictor of things like profitability, recovery, quality, customer satisfaction, employee retention and so on, but it is highly predicted when it is associated with or when it appears in collaboration with other virtuous activities.

Dr. Relly Nadler: Can you tell us a little bit more about how you go about that study and how big the sample was; what were some of the actual factors that you studied to get some of this research?

Dr. Kim Cameron: There have been several studies. That particular study, I think, was the study originally of about 53 organizations and the instrument that was created was a survey instrument measuring a variety of what we refer to as virtuous practices. I think there were seven or eight, including trustworthiness, forgiveness, compassion, optimism, hope, gratitude, and so on; simply items on the survey that assessed the extent to which behaviors were displayed in the organization that would represent those virtues. So it was a behavioral instrument that we used.

Since that time there have been quite a number of other studies that we have done including broad samples of organizations. We have a survey instrument, for example we now call it the Positive Practices Survey. It measures 38 different dimensions of organizations virtuousness or positive practices. Of course I’m not sure how many, but a large number of organizations, with 10,000-12,000 respondents. There have been other studies done simply of individual organizations, mainly different business units within organizations. I can tell you about some of those.

The conclusions of these studies are actually quite dramatic; I’ll give you one example, Relly. In the study of these 38 dimensions of positive practices or virtuous practices we had a sample in the financial services industry. The reason I think this is important is because the financial services industry, buying and selling stocks, worrying about at the end of the day we need to know if we are ahead or behind, so the most amoral, least likely industry to care about how you treat people, is financial services. Because what we are interested in doing is stock price return. So we picked that industry specifically because if you can find differences in that kind of industry, you are bound to find differences even more dramatic in health care, social services, education; organizations that care much more deeply about employees and individuals working in the organization.

Here’s the result. In the financial services industry we measured these 38 dimensions of positive practices and then six different measures of financial performance. So of course that would be revenues and efficiency and keeping customers and keeping the money in your organization and so on; profitability.

The correlation between positive practices and financial performance is about .49. In scientific journal articles a .49 correlation is a pretty good correlation. There’s lots of work done when you get a significant results with a .2 correlation, so it’s strong. But what was more dramatic was that we measured, in these organizations, other practices at time ones, for example in 2005. Then we measured again a year later, 2006. Took the change scores of did you improve or not in these positive practices. By the way, in each one of these organizations they had taken seriously the idea of positive organizational scholarship as being something that they wanted to implement or various practices that they wanted to implement. So everybody was trying to get better.

Most organizations got better based on some dimension. Okay, but here’s the scientific results. What we discovered is that if you simply take change scores – did we get better or not – and then did financial performance improve or not. So you are taking a relatively conservative look at whether or not these positive practices really work. Is there a change in one and what happens to the change in the other? The statistic we used is what is called simply an R-Square. In others words, the amount of variance accounted for. If you get one tick improvement in one, what happens to the other? The R-Square is .45 or in other words, you get one tick improvement on other practices, you get ½ a tick improvement on financial performance.

A month or so ago I reviewed a journal article in which R-Square was the major statistic being argued and the R-Square in that paper was .15. They were arguing that this is a pretty good results because you can account for 15% of the variance. Well, we can account for almost 50%, 45% of the variance certainly by looking at positive practices or virtuousness in financial services where you would not expect that to be a significant factor.

There is now beginning to pile up pretty substantial evidence that at least at the organization level other practices, virtuousness in the organization, really does pay off in just bottom line ways. The reason that is important is because you walk into the average CEOs office and you say I want to study compassion, forgiveness, gratitude, trustworthiness; they say look, I don’t have time for this, you know I’ve got an analyst meeting in 15 minutes. Can you show me how it pays off? Show me any kind of a result that I care about and I’ll pay attention, otherwise, let’s forget this. Sounds like Sunday School advice.

Well, in fact, the evidence exists. That you pay attention you are going to get the bottom line impact that CEOs are held accountable for.

Listen to the complete recording of our interview with Dr. Kim Cameron above, without commercials.


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