7% Increase in Shareholder Returns

by Ron Potter

Did that title capture your attention?   What company today wouldn’t like to provide that kind of increase to their shareholders?

185 CEO’s

A research paper looked at 185 CEO’s and the performance of their companies in the S&P 500 between 2000 and 2013.  The conclusion was that the more humble leaders produced 7% higher value to their shareholders.  The paper used modesty, fairness, and sincerity to measure their “humbleness”  Let’s take a look at these three characteristics.

Modesty

A dictionary definition says “the quality of being unassuming or moderate in the estimation of one’s abilities.”

Unassuming.  There are several areas where a person can be unassuming or assuming.  Any of them can be good or bad.  One statement I like comes from Jordan Peterson in his book, 12 Rules of Life.  Rule number 9 says “Assume That The Person You Are Listening To Might Know Something You Don’t.”  That’s a good thing to assume and it makes you unassuming.  When leaders make this assumption about their team, it’s inspiring and leads to great conversations about the business.

Moderate about one’s abilities.  I think the word moderate is key.  Not too high, not too low.  It’s interesting to me that team members often prefer to work for a boss that they consider above average or even higher.  It only becomes an issue if the boss starts believing her own press and assuming she knows more than everybody else on the team.  Remember Jordan Petersons rule number 9.  As long as the leader remains unassuming, the team loves a strong, knowledgeable leader.

Trust Me

In my book, Trust Me: Developing a Leadership Style that People Will Follow, the number one characteristic is Humility.  The word has lost its original definition over time.  The early definition was “tremendous strength under complete control.”  As I mentioned earlier, people like leaders who have great strength and ability but are modest or humble at the same time.  That’s the winning combination.

Many leaders exhibit power and strength in their roles.  They may get things done but they don’t build great teams and they don’t develop shareholder value.

Be a humble leader.  The rewards are high and the relationships you develop will be tremendously valuable over time.

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