The field of virtue ethics provides a fresh perspective on decision-making in general and the trade war in particular, by drawing attention to character. The central tenet of virtue ethics is that a person’s strength of character is, and should be, the foundation for decision-making – what Aristotle called “practical wisdom.” Instead, decision-making tends to be guided by a consequentialist approach relying on cost-benefit analysis as a justification, with little regard for the shortcomings of this approach. Research by Flyvbjerg and Bester in 2021 revealed the inaccurate and unreliable basis of cost-benefit analysis, pointing out the systematic tendency of underestimating costs and overestimating benefits, and the vulnerability of the approach to manipulating the analysis to support an agenda.
Three significant sources of bias arise in cost-benefit analysis: the data employed, the time horizons used, and the extent of externalities captured in the analysis. For example, in the trade war, the facts about the origins of fentanyl and the assertion that tariffs will reduce fentanyl-related deaths have been the subject of debate. Cost-benefit analysis also tends to overlook the broader systemic implications of decisions, such as the effective tax imposed on consumers through tariffs. Although cost-benefit analysis can be useful, it can also be severely limiting and misleading. A more robust approach is to consider how character-based judgment underpins decision-making. Understanding what character is and how imbalances create blind spots in decision-making, exposes the need to move beyond analyzing the trade wars in terms of cost-benefit analysis alone to one of considering the character underpinning decisions. Although it is important for everyone to understand and develop strength of character, it is particularly critical for those who hold positions of power that dictate the rules and systems for others.
Character-Based Judgment
As one of the most ancient fields of study within virtue ethics, the science of character has evolved significantly, drawing on extensive research in philosophy, psychology, education, business, and exercise science to understand what character is, how it can be assessed and developed, and embedded in organizations. Using the character framework I developed with my colleagues, we can examine how the 11 interconnected character dimensions: drive, collaboration, humanity, humility, integrity, temperance, justice, accountability, courage, and transcendence influence the central dimension of judgment.
As with all the dimensions, judgment (not judging) has its own set of behaviors that can be developed, such as being situationally aware, cognitively complex, analytical, and decisive. However, judgment alone, unsupported by dimensions such as justice, humility, humanity, and accountability, can lead to self-serving decisions that fail to consider the broader picture. Strength of character alongside competence is the basis of trust. The trust that people aren’t acting in self-interest, that they have the courage to take difficult positions, that they have the transcendence to see possibilities where others do not, that they have the accountability and justice to exercise judgment that considers the needs of a broad set of stakeholders. Can we trust the judgment of our leaders? It is not the merits of a cost-benefit analysis on which we should be basing our trust, but rather, examining the strength of character of those who construct the analysis.
A common misconception about character is that it is just about being a good or nice person, implying that someone with strong character operates with “one hand behind their back.” On the contrary, Kiel established in his 2015 “Return on Character” book that there is a fivefold return on assets for leaders with strong character. Additionally, my colleagues and I revealed in our 2023 “Character Compass” book that the evidence for elevating character alongside competence is robust, such as a 14% increase in leader effectiveness. Strength of character is critically important when making tough decisions under difficult conditions, which is why Forbes contributor Bruce Kasanoff profiles character in West Point training. The trade war certainly qualifies as a scenario for difficult and tough decisions – a time when we need to double down on character-based judgment.
The true test of character lies in evaluating the character of decision-makers to identify potential blind spots in their decisions. It’s crucial to recognize that any of the 11 dimensions can operate in deficient or excess vice states. With leaders who wield significant influence, it’s vital to consider potential imbalances of character that can compromise judgment. These imbalances are the root cause of blind spots, and being aware of them is the first step in mitigating their impact.
How Character Imbalances Compromise Judgment
Individuals, organizations, and societies have significant misconceptions about character, often revering and promoting people with character imbalances. A typical imbalance is having a lot of drive and low humility, which research repeatedly points to as a blind spot in leaders. Although most people tend to view humility in its excess vice state about being self-effacing or self-conscious as noted by Forbes contributor Aliza Knox, the virtuous expression of the humility is a powerhouse for learning and development – being curious, reflective, self-aware, vulnerable, respectful, grateful, modest, and a continuous learner. Having a lot of drive and low humility is a formula that produces arrogance, micro-management, resistance to feedback, and blame-shifting, as noted by Forbes contributor Brent Gleeson. Other examples of character imbalances include an excess of courage leading to recklessness, or an excess of integrity leading to inflexibility. These imbalances can compromise judgment and lead to blind spots.
Because we have valorized some character dimensions, such as drive, courage, and integrity, and neglected many others, some prominent blind spots will emerge. Strengthening character is about strengthening each dimension to reduce the blind spots and the associated risk of poor judgment.
Checking For Character Blind Spots
We can check imbalances of character in ourselves, our organizations, our societies, and the systems that underpin all of them to identify blind spots. For example, most people and organizations value integrity. However, strong integrity (being authentic, candid, consistent, principled, and transparent), unsupported by the dimensions of humility, humanity, justice, and collaboration, can operate in the excess vice state of being uncompromising, belligerent, rigid, dogmatic, and indiscriminate. The common mistake has been to confuse these imbalances with matters of style, “being a little rough around the edges” or, worse yet, the badge of great leadership. Instead, the imbalances influence the leader’s judgment, negatively reverberating to anyone surrounding them. Most of us don’t see our blind spots because we judge ourselves on our intentions and others on their behaviors, and we also lack self-awareness more generally. Therefore, approaches such as 360 degree assessments of character or having people hold us accountable for our character would go a long way to checking for blind spots. These assessments can involve feedback from peers, subordinates, and superiors, as well as self-reflection and self-assessment tools. The solution is not to diminish strength in integrity but rather strengthen the weaker character dimensions to reduce the blind spot that can impair judgment.
Elevating character alongside competence in human resource practices and the organization’s core systems can go a long way to reducing blind spots. Organizational culture will reflect the individuals within it, and who gets hired and promoted will shape that culture for better or worse. We have written extensively about assessing, developing, and embedding character in organizations. My article “Cracking the Code: Leader Character Development for Competitive Advantage” is a great start.
In society, if we continue to rely only on cost-benefit analysis to sort through decisions, with little regard for the strength of character that influences judgment, we will continue fighting over a shrinking pie. Consider how strength in the dimension of transcendence – being future-oriented, inspired, optimistic, purposive, creative, and appreciative – could shift us from an “either-or” to a “both-and” mentality that would allow us to imagine new possibilities.
Those that influence organizations, such as boards of directors or legislative and regulatory systems, should consider how those systems can be employed to spotlight the critical role of character and to clarify what strength looks like. For example, the Canadian Armed Forces embedded leader character into their ethos, essentially the organization’s DNA. Doing so holds them accountable for ensuring that wherever competence resides, character belongs.
Character Leadership Imperative
Imagine what could be done with the problems facing individuals, organizations, nations, and the planet if we could strengthen the character-based judgment that underpins decisions and actions. There may be a way forward from the trade war, but it won’t arise from cost-benefit analysis alone. Hopefully, leaders and policymakers can strengthen their character to imagine a way forward that is less divisive and more transformative. People and nations depend on it.