Episode: Encore: The Character Advantage

Megan Hyatt Miller: On a bitter cold January day, women and girls from around the country gathered at a courthouse in Lansing, Michigan. Some were athletes, others were high school students, some white, some black, some married, some single. Most had never met before, but they had one thing in common. They had all been sexually assaulted by the same man. Larry Nassar, who had been the USA Gymnastics national team doctor and a physician at Michigan State University, had pled guilty to seven counts of sexual assault.

The women were there to make victim impact statements at his sentencing. Nassar had been accused of assaulting dozens of young athletes, all girls, including at least four Olympic gold medalists. As the girls, now grown women, recounted how the doctor they trusted assaulted them over a period of 25 years, onlookers reacted with shock and outrage. “How did this happen?” many wondered. “How could this abuse go undetected for so long?”

Michael Hyatt: However, the abuse was not undetected according to some reports. There were credible claims that trainers and coaches had received complaints about Nassar dating back years, but he was highly trusted and highly valued by trainers, coaches, and administrators. According to one victim, a trainer responded to her complaints by pointing out that Nassar was a world-renowned physician and his abusive behavior was a legitimate medical treatment.

Nassar’s work was so highly valued that in 2014 the president of the USA Gymnastics said he was instrumental to the success of the team both on and off the field of play. When complaints escalated, Nassar was allowed to quietly retire from the team, but he simply continued to molest girls in other institutions. To date, some 250 women and girls have come forward, many alleging their complaints were ignored or covered up.

Megan: But this isn’t a story about Larry Nassar, an obvious sexual predator. It’s a story about the leadership culture that surrounded and enabled him. We’ve seen similar stories involving child abuse in the Catholic Church, in the case of Penn State, and in the case of Harvey Weinstein. So the question every leader must ask is…What’s the result when an institution values reputation or success over personal character?

Hi, I’m Megan Hyatt Miller.

Michael: And I’m Michael Hyatt.

Megan:  And this is Lead to Win, our weekly podcast to help you win at work, succeed at life, and lead with confidence. In this episode, we’re going to talk about the character of a leader.

Michael: This is obviously a very timely issue. All of us want to be successful as leaders, but sometimes we face situations that pit our desire for results against our better values. In this episode, we’ll help you recognize that temptation and do the right thing even when it’s costly. By doing so, you’ll avoid doing damage to your organization and your reputation and you’ll build a lasting legacy of success.

Megan: To start off, we’ll explore some of the questions surrounding the culture of our organizations and our character as leaders, and in the second half of the podcast we’ll ask a really hard question. How good can we really be? The first question I want to ask you is…What does good character actually consist of?

Michael: Meg, this is a really heavy story. In fact, as you were reading that I was tearing up, probably because, as the father of five daughters, I can empathize with what that must have been like, but this really, as you said, is not a story about Larry Nassar. He’s obviously at fault. He’s a sexual predator. But I kept asking myself as I watched this story unfold on television, “What about all of these other leaders in the USA Gymnastics organization? Where were they? Why wasn’t anyone speaking up in the midst of this?”

I know in retrospect it’s easy to cast stones, but I think it’s a cautionary tale for all of us. It’s not these outliers like the Larry Nassars. I mean, obviously they need to be dealt with, but it’s all of us. What kind of organizations, what kind of cultures, what kind of world are we building? We all have responsibility in that, and it begins with us.

Megan: It’s really about what we are willing to tolerate and allow on the way to success.

Michael: Great point.

Megan: I think that’s the big question. On the flip side, what actually constitutes good character?

Michael: Well, here’s a basic definition of character. This is from Christian Miller from his book The Character Gap. He says, “Do the right thing…” In other words, be kind, be generous, be patient, whatever it is. Do the right thing in the right way (so, with integrity, with humility) for the right reason: for others, not self-gain. We don’t do the right thing because of what it’s going to bring us or how successful it’s going to make us. If that’s really your idea of goodness, then it means if it doesn’t work you’ll change your strategy and do something else. Goodness is its own reward.

So do the right thing in the right way for the right reason all the time. It’s consistency. I think this is something so many people have lost sight of today. They think they’ve done this good thing over time, and then they make one “mistake” and all of a sudden they lose their position of leadership or position of influence, but that’s just the way it works, and that’s what we have to recognize. There’s a huge cost when we do the wrong thing. So doing the right thing, little by little we’re sowing the seeds of the organizations, of the cultures we’re creating, of the world we’re creating.

Megan: So why do you think it’s hard for leaders to do all four of those things right?

Michael: I think there is so much pressure to succeed. I know we have listeners from all over the world, but here in America, in particular, success is like the ultimate value and everything gets sacrificed at the altar of success. It’s rare anymore, especially when you start losing moral absolutes and everything becomes relativistic… Then what’s it relevant to?

It’s relevant to me and to my success, to my notion of right and what’s wrong, and that’s not a very good reference point. There needs to be something transcendent we’re accountable to. With no accountability, all kinds of bad things happen. That’s exactly what you saw in the Larry Nassar situation. Nobody was holding him accountable.

Megan: Right. It’s also important to remember that doing the right thing doesn’t always result in an ROI. It doesn’t always turn out well for you. Sometimes it means you’re actually going to lose and there is no upside. It doesn’t get returned to you. It doesn’t turn out well. It costs you something personally as a leader or organizationally that you’re not going to get back.

So if there’s not something behind your desire to do the right thing just because it’s right… If you’re only doing the “right thing” so you can guarantee your own success or your success in the eyes of others, that’s not going to go very well. You’re not going to be able to be consistent because, at the end of the day, what makes you able to do the right thing is your commitment to doing what’s right regardless of the consequences.

Michael: That’s right, and that has to be its own reward. I had a situation when I was the publisher of one of Thomas Nelson’s imprints, Thomas Nelson Publishers. We had an author, a very high-profile author, who began to teach this doctrinal position that was at odds with mainline traditional Christianity. I won’t go into the details of that, but let me just say this was core. It was foundational. The first I heard about it is somebody in church mentioned to me that they had heard her spouting off about this, and what did I think about it?

I said, “Well, that can’t be possibly true. This author is not a theologian, and it’s probably fine.” I kind of dismissed it. Then I started getting calls from the media, and they were wondering about it, how in the world Thomas Nelson, a faith-based publisher, was going to publish this author who was espousing something so contrary to the Christian faith. I thought, “Wow! I have a problem.” So I decided to go meet with this author. I sat down with her, along with my boss at the time (who was not the CEO of the company, but my boss, who was between me and the CEO).

I asked her about it. I just assumed maybe she had bungled the communication or she didn’t really understand what was at stake. I said to her, “Look, I have the media calling me.” I said, “I don’t know exactly what you’ve said because I haven’t heard these recordings, but I just want to give you an opportunity to clarify your position on this particular doctrine.” Well, she went after it with unbelievable energy. She talked nonstop for two hours, basically attacking this core teaching of the Christian faith.

I could just feel the color draining from my face, because I was a brand new publisher. I’d only been in my position 30 days. We had paid this author $1 million in a royalty advance for a book we thought was going to be massively huge. We had already printed the book. It was over 100,000 copies of the book we had printed, which was a large printing. So here I’m facing that I have to pull the plug on this book with serious financial repercussions.

Megan: You had a lot to lose.

Michael: I had a lot to lose, and I was in a division that really couldn’t afford to lose it. We were not doing so well at the time, and I was trying to turn it around. So I left, and my immediate boss said to me, “Wow! So what do you think we should do?” I said, “I think we have to pull the book.” He said, “I don’t know. Has she said anything in the book that’s offensive?” I said, “No, but we’re giving her a platform where she can espouse this, and it’s going to be connected. We’re giving her credence by publishing it, and we can’t do that.”

He said, “Well, I think you’re wrong. I think you’re overreacting.” I thought, “I’m going to lose my job over this.” Because he knew what was on the line, and it was going to reflect on him as well as upon the entire company, and he wasn’t willing, at the time, to suffer the financial setback. He said, “I really think you need to think about this, because I think you’re kind of grandstanding here.” He was right in my face about it. I was getting the opposition internally.

So I went home. I talked to Gail. I told her the whole situation. She said, “Honey, I don’t care if you do get fired. This is the right thing to do, and you just need to go do it and be brave.” Well, I wasn’t that brave. I mean, I didn’t feel that brave. I didn’t feel that courageous, but I went in the next day and I talked to my immediate boss and said, “Look, I think we need to pull the book. If you don’t agree with me, then I can’t work here.” I said, “I’m not trying to grandstand, but to me it’s a fundamental matter of conscience, and I can’t do it.” He was like, “Whoa.”

He said, “Well, I don’t know. I need to think about that.” I went back to my office. I told my assistant, “Get some boxes. I need to pack.” I really felt like I was about to be fired. About an hour later, as I’m kind of sulking in my office wondering what the heck is going to happen, I get a call from the CEO. So it was my boss’ boss. He said, “Tell me about this situation.” So I explained the whole situation to him. He said to me, “Mike, you’re doing the right thing. Pull the plug.”

Megan: Wow.

Michael: I could not believe it. Again, it was hugely expensive. There was no upside. That cost us tremendously. We had to flush all that inventory, we had to flush the royalty advance, all of that. But it was absolutely the right thing to do. The thing about it I didn’t realize at the time, and I certainly didn’t do it for this reason… That very act created culture, because all of the people who were watching, wondering what we were going to do, the people inside my company, were secretly, I think, kind of hoping somebody would do the right thing even in the face of financial loss, and they celebrated it. That story was told over and over again.

But there are oftentimes when we have to make a decision like that, and usually we don’t know what the consequences are going to be. We don’t know if there’s ever going to be an upside. Even in that situation it’s kind of a silver lining in a cloud, because from all of the objective standards, financially it was terrible, but it was totally the right thing to do, and looking back on it I don’t regret for a second having made that decision.

Megan: It’s funny, because that story happened probably more than 20 years ago at this point, and even still it has influenced our culture at Michael Hyatt & Company. Now all of these years later, we have a core value of unyielding integrity that says we tell the truth, taking responsibility for our mistakes and failures, and we honor our commitments even when it’s difficult, expensive, or inconvenient. In that case, you honored your commitment to your faith and your personal integrity at a very high cost.

As a reminder, that definition of good character we’re working with here is doing the right thing in the right way for the right reasons all the time. Now let’s shift our attention to why integrity matters in the first place.

Michael: I think in the current context this is a question we have to ask. I took it for granted for years that character counts, and I think most of our culture did, and yet we’ve seen the steady erosion of that over time. It’s probably the most pronounced in politics. I think this is why people are so cynical about the political sphere, because they see people will say anything or do anything to get elected. They’ll do anything or say anything to stay in office. We’ve seen it also in Hollywood. We’ve seen it in corporate America. We’ve seen it, sadly, in churches. We’ve seen it a lot of places.

I think so often we place the priority on success. Again, another corporate story I had… We had another executive in another company I was working at who was one of the highest performers in the company. He consistently beat his budget. He was known for the fact that he could deliver the numbers, and yet then I find out he’s doing these things like calling some of the female staff in the middle of the night saying incredibly inappropriate things to them. For a while, nobody was reporting it, and then it bubbled it up to me. In those situations you go, “How could this be tolerated?”

Megan: It’s like Matt Lauer.

Michael: Exactly. I mentioned it to my boss in that situation, and he said, “Well, do you really have any proof?” He just pooh-poohed it.

Megan: It’s like people really don’t want it to be true.

Michael: They don’t want it to be true. In fact, the first question he asked me was, “Do you realize he’s producing $15 million worth of profit for this company every year?” Like that should impact the decision?

Megan: Like that’s our price.

Michael: Right. That’s our price. I said, “Yeah, I know that, but this is unacceptable. I have female staff who are complaining to me about this.” And this wasn’t the only situation. Eventually, we did fire him, but it wasn’t easy. Why? Because character didn’t really count or it only counted if…

Megan: If you weren’t having to choose between profit and character.

Michael: Right.

Megan: Sometimes when we make these decisions to exercise good character there’s a cost involved, but do you think there’s always a choice between character and success?

Michael: I don’t. I think it’s a false dichotomy. I think sometimes the success we’re looking at is the short-term success, and we fail to realize we’re sacrificing long-term success by looking over character, by not paying attention to character. For example, in that situation I told earlier about that author, our division went from number 14 to number 1 over the next 18 months, and it wasn’t some magical thing. I think it was because all of a sudden people were engaged. They realized we were serious about the mission, we were serious about what we said we believed, and everybody was all hands on deck.

Megan: It creates a high-trust environment, and I think that’s true in the story of Matt Lauer as well. The ratings for The Today Show are apparently up. You can only imagine in an audience full of female viewers making that hard decision did nothing but ensure their confidence in the brand of The Today Show and the new anchors for that program.

Michael: I think of the front end of the decision. When you’re making a decision where it’s all about character and it looks like you’re going to be sacrificing a short-term gain, you have to decide it doesn’t matter. It’s really a question about value. You’re saying, “Look. Personally, I value my own integrity. I value character more than the short-term success, and even if there’s no long-term success I have to do the right thing. I have to live with myself. I have to have a conscience.”

Sometimes it turns out well. I think sometimes we undersell that and make a false dichotomy, but that doesn’t mean it’s a guarantee that it’s always going to turn out well. Still, you have to be convicted to do the right thing.

Megan: It’s kind of what legendary UCLA basketball coach John Wooden said. He said, “Be more concerned with your character than your reputation, because your character is what you really are while your reputation is merely what others think you are.”

Michael: This is important in the age of social media. You can very carefully sculpt your reputation on social media and get people to perceive one thing that is completely out of alignment with who you really are. I know people who are just like this. You have people who are out there putting themselves on a platform as a very successful entrepreneur, or whatever, successful in any field of endeavor, but the reality is they could be a mess.

Megan: One of the things I think is really important for leaders to remember is that there’s probably no greater asset you have than the trust of your team. In our LeaderBox for February we had a book called The Loyalist Team, which is really all about the culture that develops around trust when it’s there or when it’s not there on a team.

If a leader has the trust of their team and the team trusts one another because there’s integrity in the mix, what you’re able to accomplish in terms of success is so much greater with that kind of alignment than you ever could if there’s cynicism or doubt or mistrust or a lack of character. This is one of those leadership characteristics that if you’ll work on and work hard on and be committed to will benefit you greatly, not just in terms of your own legacy but in the effectiveness of your team.

Michael: So true. And I think our people know a lot more than we give them credit for sometimes. They see what’s what. They sense whether or not you have moral integrity, whether character counts, whether you’re willing to make the tough decision or not.

Megan: So what do you think are the tests every leader is going to face?

Michael: There’s a really helpful model that comes out of the world of law enforcement called the fraud triangle. Here’s how it works. There’s a need, then there’s an opportunity, and then there’s a rationalization. We were talking to Larry on our staff. He used to be a pastor. He talked about this sometimes happens in churches, where you have an embezzling situation where somebody has a need for money…

Megan: Like maybe they’re going to get evicted from their apartment or rental home.

Michael: It could be anything. Then they have an opportunity. There are loose financial controls. Nobody is going to really look over their shoulder, and they’re hoping to pay it back before it’s ever discovered. I know a situation just like this.

Megan: I had a guy work for me one time who did this very thing.

Michael: Then there’s the rationalization. “I’m going to get evicted out of my home” or “I’ll pay it back later” or “I’m not appreciated here, and I was promised that raise and didn’t get it.” It could be a thousand and one things. Anytime you start falling into that kind of thinking… We’re not talking about the people out there. We’re talking about the person in here, because all of us are just one stupid decision away from bankrupting ourselves morally and negatively impacting our legacy, our families, our organizations, and all the rest of it.

Megan: I think that’s a really helpful model, because the truth is we’re all going to be in a situation where those things are going to be in play, and if we’re not wise to it we’re going to fall prey to them. Sexually, for example, in an office setting, you may have a marriage that’s not doing well. You may feel underappreciated at home. There’s your need part. You may be in a one-on-one situation with a coworker, and there’s your opportunity for a sexual encounter of some kind.

Then the rationalization. “Well, if my spouse were just [whatever]” or “If I were just appreciated more at home, then I wouldn’t need to do this” or “Nobody is ever going to find out” or “It has been a really long week” or whatever you would fill in the blank with. There you go. Before you know it, you’ve fallen down into a very slippery slope that’s hard to find your way out of.

Michael: It’s like that HALT acronym some people use in recovery, which says you’re the most vulnerable when you’re hungry, angry, lonely, and tired.

Megan: It’s like we know this for our toddlers, but we need to know this of ourselves, because it’s equally true for adults.

Michael: Yep.

Megan: All right. So, Dad, in a few minutes we’re going to come back and talk about whether or not it’s possible to improve your character, but before we do that I want to take a quick break and I want you to tell us about something that’s really exciting that’s happening this week.

Michael: Public registration for my productivity course Free to Focus is now open. I know a lot of people have been waiting months to get into this because we only open registration twice a year. Free to Focus is a nine-module video course that teaches my signature productivity system, and it’s really different, I think, than anything else out there because it’s not about how to get more stuff done or how to work faster; it’s about achieving more by doing less, and it’s really about having more freedom in your life.

It’s about the freedom to be focused, to absolutely focus on something and do quality work and not be distracted by a hundred and one things. It’s about the freedom to be present with the people you love the most so you’re not distracted by your devices at the dinner table, for example, or the freedom to be spontaneous so you’re not so structured, so over-calendared you don’t have the free time to be able to spend with the people who matter the most in your life.

In Free to Focus I teach you how to focus on the high-leverage tasks that’ll really move the needle in your business and your personal life. All you have to do is go to to sign up now. Registration closes tomorrow night, March 28, and it will not be open for another six months.

Megan: The final question for this episode is…Is it really possible to live a life of character, and, if so, how the heck do we do it, because so many people fail?

Michael: I know, and especially if you watch the news and see what’s happening in our culture it’s very easy to go to the place where we think, “It’s inevitable. All of us are going to slip, and it just kind of happens to you.”

Megan: Especially if you’re a leader.

Michael: That’s right. Especially if you’re a leader. I absolutely think you can live a life of character, but, like so many other things in life, you have to be intentional. I think it begins with you, as the leader, knowing where true north is. What is your set of nonnegotiables? I’m talking about moral things. What is your set of nonnegotiables? For me, and this is just my faith tradition… This is one of the reasons I read the Bible every day.

It’s because I don’t want to only submit myself to the cultural whirlwind and all the moral relativism that tends to get people confused, but I want to know where true north is. I want to know that these absolutes, which have shaped civilization and have served people for so long for so well… Not that it’s not without problems. I mean, we talked about things in the church, but I think for individuals this can shape our character. So we have to know where true north is. We have to have a moral compass.

Secondly, surround us with people who share our values and to whom we give permission to hold us accountable so they call us out. Meg, you’re very good at this with me. Seriously. I want people in my company, I want people in my church, I want people in my family to call me to account when I’m not living my values.

Megan: This is why leaders get in trouble very often at the highest levels: because they have built a circle around them of yes people. No one will challenge them, and there’s no accountability.

Michael: That’s one of the things I’m most proud of in my family. I have definitely not built up a family full of yes people. You guys challenge me constantly, and if I get a little bit out of alignment with my character, you guys are the first ones to call me out on that, and I appreciate that very much. I think it comes down to… This would be the other part of doing it intentionally. It’s as simple as making the next right choice.

If you can do that over a long period of time, just train yourself… It’s like anything else. It’s like any other habit. I don’t think about some of the basic habits like brushing my teeth. That just comes naturally because I’ve trained myself to do it. Frankly, a pretty unnatural act, but I’ve trained myself to do it. The same thing is true with these moral choices. As you make the right decision it gets easier over time.

Megan: Especially when you come back to an absolute standard of where you know you’re not going to compromise, when situations arise and they’re in conflict with those values, you already know what decision you’re going to make. You’re not really making a decision about whether or not you’re going to be in alignment with your values because you’ve already said that’s the most important thing. “I’m not compromising, and everything else has to come after that.” It makes it simpler, if not easy.

Today we’ve talked about the character of a leader, and we’ve discovered that character is a nonnegotiable aspect of great leadership. As we come in for a landing, I just want to remind you it’s always best to do the right thing, even when it’s costly or inconvenient. You do have the courage to make good choices. Dad, do you have any final thoughts for us today?

Michael: We started by talking about Larry Nassar, and it’s very easy to see that situation and focus on him. We started by saying that all of us have a role. The reason there are Larry Nassars in the world is because a lot of us who are leaders let that happen, and we can’t let that happen. We have a role to play, and it’s not just our own legacy at stake. It’s not our own future, but it’s our communities. It’s our institutions. If we don’t stand up and do the right thing when it’s tough, then we’re going to reap the whirlwind.

Megan: Very often the consequences are far worse than financial. That story illustrates that. As we close, I want to thank our sponsor LeaderBox. It provides automated personal development in a box. Check it out at If you’ve enjoyed today’s episode, you can get the show notes and a full transcript online at

Michael: Thanks again for joining us on Lead to Win. If you like the show, please tell your friends and colleagues about it. Also leave us a review of the show wherever you listen to podcasts. That really helps with the visibility of the show.

Megan: This program is copyrighted by Michael Hyatt & Company. All rights reserved. Our producer is Nick Jaworski.

Michael: Our writers are still Joel Miller, Lawrence Wilson, Mandi Rivieccio, and Jeremy Lott.

Megan: And our recording engineer is Mike Burns.

Michael: Our production assistant is Aleshia Curry.

Megan: And our intern is Winston.

Michael: Who is Winston?

Megan: Can’t say.

Michael: We invite you to join us for our next episode, where we’re going to be discussing the law of replication and its impact on your leadership. Until then, lead to win.