Thought Leadership

Apples and barrels: Developing character as an organisational virtue

By Matt Finnis, CEO at Cranlana Centre for Ethical Leadership

In the past fortnight I found myself talking about the same thing in two very different environments that, on the surface, could not seem more distinct.

In one, I was attending a workshop at the Australian Defence College, discussing how character is developed in our armed forces personnel; essentially how formal training, reflection on operational experience, and institutional culture combine to shape who soldiers become.

In the other, I was debriefing a program our team had recently run with Year 9 students from St. Catherine’s School focused on character development for their students. An immersive experience which brings to life the spirit of that school’s motto Magnum Nisi Bonum; “nothing is great unless it is good.”

Despite the obvious differences in context, both organisations are asking the same question of themselves: How do we build the moral muscles required to make good choices when the stakes are high?

And as I drove home listening to news reports of the latest instance of corporate leaders appearing before a Senate inquiry into unethical conduct, I couldn’t help but reflect — if schools and the military think so deliberately about character formation, why do so many businesses treat it as a “nice to have” or otherwise ignore it altogether?

How defence and schools build the barrel

Whenever we partner with education or defence leaders I never cease to be impressed by the depth of their thinking about leadership, culture and ethics.

Invariably, they’ve come to understand that from as far back as Aristotle, character wasn’t construed as something you possessed but something you acquired and refined through habit and practice over time.

But what I’m most drawn to in our recent engagements with the ADF’s Centre for Defence, Leadership and Ethics and the St Catherine’s School is how they hold two things together: a deep, old fashioned commitment to virtue, alongside a very practical and contemporary understanding that character can’t be separated from the communities and narratives which surround us.

Quite separately but consistently, CDLE and St Catherine’s have taken the view that developing character strengths in individuals is necessary but not sufficient. Developing strength of character on the other hand, requires a recognition that character is fundamentally relational and emerges through how you treat others, how you hold up under pressure, and whether you’re willing to be seen and held accountable.

For St Catherine’s this means going beyond identifying and nurturing the character strengths of their students to helping young women see themselves as contributors to a good society and cultivating habits like critical thinking and courage in everyday life as emerging leaders.

The ADF recruits for potential, but having done so, takes responsibility for developing character in their soldiers alongside the technical masteries required to be effective in combat. Given the stakes, it is imperative that alongside physical prowess and tactical skills, our soldiers cultivate a practical wisdom (there’s Aristotle again) to discern the right path forward in the multitude of complex situations they encounter.

Both institutions recognise a fundamental principle that too many commercial organisations tend to ignore: hiring good people and training their technical skills is not enough. Organisations must also design environments and experiences that actively shape, strengthen, and sustain good character.

A corporate disconnect?

I think we would all accept that character formation is “core business” for the military, schools and even sporting organisations. But a company exists to serve customers, make money and drive returns to its shareholders. Surely, that a different job?

However, the issue we overlook in making this distinction is that character develops in corporate contexts whether we intend it or not.

People develop character through their experiences, their role models, the cultures they inhabit and the incentives they are provided. Corporate environments, in fact, are very powerful shapers of character. The question for their Boards is whether they are shaping it intentionally or by default.

If we consider some of the prominent ethical failures which have come to light in recent times, in the vast majority of cases, regardless of our disdain for their conduct, few of us would argue that those responsible woke up in the morning and went to work having decided to be corrupt.

Rather, the environment they built their careers in, characterised by billing pressures, aggressive market share targets and hyper competitive cultural norms, created conditions where good people made bad calls. The barrel corrupted the apples.

If your incentives reward winning at all costs, if your metrics only track short-term financial outcomes and if your leadership conversations are unwilling to surface ethical trade-offs, you are shaping character. But probably not in ways that you anticipated.

This isn’t about pointing fingers but merely recognising that organisations of all types have a responsibility to examine whether their systems, incentives, and cultures support good character or slowly wear it down.

The apples and the barrels

So what might our corporate leaders learn from thoughtful educators and military commanders about character? That you need good apples and good barrels. That individual integrity matters. But institutional culture matters more.

In defence and in schools they understand that character doesn’t form in isolation. They seek to create conditions, through deliberate reflection, social norms, and sustained attention to ethics as a practice, that make it easier for people to demonstrate their good character even when pressures push the other way.

The uncomfortable truth for corporate leaders to embrace is this: you’re already shaping character through your culture. The only question is whether you’re doing it intentionally or leaving it to chance.

If schools treat character formation as core business, and the military treats it as foundational to leadership, maybe it’s time businesses stopped blaming ethical failures on rogue operators or a star performer acting “out of character.”

A genuinely resilient organisation goes further than merely relying on the independent moral strength of its people. It proactively invests in a system designed to sustain them. That’s the real work of leadership: not just finding good apples, but taking responsibility for the health of the barrel.

Read the article originally published on Substack here. We thank Matt Finnis for giving the School permission to share this article.