On March 18, in a ceremony at the White House, President Obama will award the Medal of Honor to 24 veterans who were denied this honor because of their racial or ethnic backgrounds. Of the 24 — who served in World War II, Korea or Vietnam — only three are still alive. The Medal of Honor, the country’s highest military commendation, is given for personal acts of bravery above and beyond the call of duty.

In the article below, Michael Useem, director of Wharton’s Center for Leadership and Change Management, and Andrea Useem, former founding editor of the “On Leadership” website and video series at The Washington Post, suggest that the Medal of Honor and its traditions offer important lessons for non-military organizations on how to inspire exceptional performance in frontline employees. This article first appeared in the journal, Organizational Dynamics.

Pay, promotion and perquisites are used by most organizations to define organizational goals and motivate employee performance to achieve them. When designed well, incentive systems can be effective in motivating and directing behavior for the vast majority of circumstances in which employees find themselves. Whether the situation involves day-to-day conduct, work quality standards or even conflicts of interest, employees generally know what is expected.

However, at moments of great uncertainty and high stakes, standard incentive systems may provide little motivation or guidance. The rewards of normal times may even discourage the personally risky actions required at abnormal moments. Such actions may also run counter to the risk-avoidance that conventional incentives can foster among frontline employees where personal discretion is often discouraged.

Still, these low-probability but high-consequence moments can present employees with unexpected opportunities for actions that may have great impact on the organization. Consider, for example, a waiter at a large and crowded restaurant whose superiors underappreciated a nascent fire in a nearby room. Should he warn the guests on his own to vacate the building? That could be a personally risky but very important action. If he counseled patrons to leave unnecessarily, he ran the hazard of creating panic, possibly causing injury, opening his employer to liability and himself to dismissal. However, if he failed on behalf of the restaurant to warn its customers about a potentially life-threatening development, he put their lives and the restaurant itself at risk. For a few critical moments, that frontline employee carried the weight of the organization and the fate of its customers on his shoulders.

Moments of such extremes are rare. Most employees will complete their entire work careers without ever facing one, and many organizations will never experience such a juncture. But when they do occur, employee readiness can be essential, as we will see in the case of a Federal Reserve employee who had to decide without legal counsel on 9/11 whether to radically intervene in the marketplace, a mid-level financial analyst for a large investment company who developed grave doubts about a touted financial package of sub-prime mortgages, and a lifeguard called to abandon his station to save a swimmer off a nearby beach.

One way for organizations to prepare employees for low-probability, high-impact events is to publicly recognize individuals who have acted courageously in the face of extreme risk.

We suggest in this article that one way for organizations to prepare employees for low-probability, high-impact events is to publicly recognize individuals who have acted exceptionally and courageously in the face of extreme risk and uncertainty in the past. This can provide employees with indelible roadmaps for facing crisis moments of their own and motivate and guide them to act on behalf of the organization’s ultimate goals in ways that standard incentive systems cannot.

The U.S. military has responded over two centuries to this organizational challenge by building a formal system for recognizing frontline valor with the Medal of Honor, the nation’s highest military award, and then incorporating accounts of recipient actions into leadership development at all levels. We believe that the institution of the Medal of the Honor, and the training traditions that surround it, offer important lessons for non-military organizations in how to inspire and guide exceptional performance in frontline employees when they face moments of grave risk and high uncertainty.

The Medal of Honor Tradition

The Medal of Honor has come to play a significant role in the armed services for preparing the next generation of personnel for exceptional performance. Gripping accounts of extraordinary action — encapsulated in the official citation to a recipient’s combat valor — are layered into training for officers and non-officers alike, tangibly informing them of what will be expected of them in combat.

To identify how the Medal of Honor has served of instructional value, we have examined its tradition through a host of primary sources. We have interviewed Medal of Honor recipients and others directly familiar with the tradition, witnessed bestowal of a Medal of Honor at the White House and recognition of a recipient at the Pentagon, interviewed and observed those who are training future members of the armed forces or being trained themselves, examined a range of memorials to Medal of Honor recipients in military training facilities, and personally experienced a training course that places Medal of Honor recipients at the center of its curriculum.

Through these several research paths, we have sought to identify how the extraordinary actions recognized by the Medal of Honor become compelling instants for preparing others for actions above and beyond their ordinary duties — and how analogous practices can be created in organizations far beyond the armed forces.

We start with brief examination of a training course for officer candidates at the Marine Corps base near Quantico, Virginia, where Medal of Honor accounts are brought vividly to life for the Corps’ future leaders.

A platoon of aspirants, identical in their drab, sweat-stained t-shirts and camouflage trousers, arrive panting at a clearing in the dense woods. They come to attention, standing silently as their instructor commands one candidate to step forward to read the citation on the metal plaque nailed to a tree.

“For conspicuous gallantry and intrepidity at the risk of his life above and beyond the call of duty while serving in Kunar Province, Afghanistan,” the citation begins. The plaque is one of 15 scattered across a challenging five-mile course, each telling a story of a Marine or sailor who earned the Medal of Honor. This final plaque offers an account of Corporal Dakota Meyer, who returned again and again in a firefight to retrieve dead and wounded comrades and allied Afghan soldiers.

“Corporal Meyer’s daring initiative and bold fighting spirit throughout the six-hour battle significantly disrupted the enemy’s attack and inspired the members of the combined force to fight on,” recites the officer candidate. After the reverent reading, the candidates drop to the ground to pump out 10 rapid-fire push-ups, then jog off to complete the course.

Marine instructors know that their officers in training have heard the story of Dakota Meyer before, how he persevered in his rescue raids even after sustaining a shrapnel injury. But by retelling this story as perspiration trickles down the candidates’ backs, Marine instructors seek to imprint a compelling account of extraordinary action deeply into the consciousness of their second lieutenants-in-the-making.

“Medal of Honor recipients are the supreme standard of servant leadership,” said Colonel Kris Stillings, former commanding officer of the Marines’ Officer Candidates School, the 10-week training and evaluation course that selects the next generation of commissioned officers. “Those are the kind of leaders we want to create in the Marine Corps.”

Pushed Beyond Their Limit

Thousands of miles to the West in the hills of southern California, Marine-enlisted recruits are slogging through Camp Pendleton’s “Crucible,” a 54-hour rite-of-passage that tests the recruits in the 11th of their 12 weeks of training. If they successfully master its 24 grueling stations, they earn the right to call themselves Marines. Woven deeply into this experience are dramatic accounts, drawn from Medal of Honor and other award citations, of how other young Marines faced a crisis and acted courageously.

The Crucible stations are named after decorated Marines — 17 Medal of Honor recipients among them — “to help to inspire them and give them the motivation to see what these Marines did in combat to push through and complete their mission,” explained Major Rory Nichols, Operations Officer for the recruitment course in San Diego.

At each station, recruits stand at attention as the drill instructor reads the official citation. Then they are briefed on the tactical situation involving a fictional insurgent force and given their mission, which requires exceptional action to complete. At the station honoring Medal of Honor recipient Jimmie E. Howard, for example, they hear how this staff sergeant coordinated the defense of an outpost of Marines in the face of an overwhelming force of North Vietnamese soldiers. The recruits then launch into a combat exercise against an opposing force of their own.

“The Crucible is intended to be the culminating event, that crystallizing moment of becoming a Marine,” explained Nichols. “It is intended to replicate some of the hardships that our future Marines will face in combat. No one is shooting at them, but they are pushed beyond their perceived limits.”

For Private First Class Coleman Branson, the first few citations read by his drill instructor during The Crucible failed to captivate him. “But as we got deeper into The Crucible and got to the citations from Iraq and Afghanistan,” he said, “things that happened in our lifetime — the stories really came to life.”

Branson singled out the station honoring Corporal Jason Dunham, who died after throwing himself on a grenade while on patrol in Husaybah, Iraq. “Just a few years ago, Corporal Dunham was in the exact same place as we were, going through the exact same training. That started to change the way I looked at things. As you get fatigued, and your legs hurt, you think: ‘I bet he felt that way, but even more, and he went into combat and jumped on a grenade for his fellow Marines. If he can do that, then I can do this.”‘

As Branson’s comments suggest, the Crucible experience creates a psychological tie between the new Marine candidate and the serving Marine who had acted courageously. By identifying with the award recipient, the new Marine can imagine himself or herself in a similar situation. The new Marine has also acquired a mental model of how to act in such a situation, when his or her own life may be on the line.

Above and Beyond the Call — in Civilian Life

No organization could ever aspire to replicate a decoration that represents so much personal sacrifice or heroic behavior, nor should it. Nearly two-thirds of the Medals of Honor conferred in the modern era have been for acts that took the life of the recipient. For virtually all other enterprises, neither battles nor lives are at stake.

Still, the military is not the only place where exceptional performance is welcomed on the frontline when uncertainty and risks are high. Most organizations know of moments when individuals well below the executive suite have taken actions above and beyond the call of their duty, often at some danger to themselves. From our study of the Medal of Honor tradition, we believe that such moments offer a largely unrealized but potent opportunity for organizations of most kinds to signal a call for exceptional performance throughout their ranks when uncertainty abounds.

Consider the experience of Walter Bailey, the young waiter referenced earlier. Bailey worked at the Beverly Hills Supper Club, a sprawling restaurant complex near Cleveland, where one evening he overheard other staff members nervously discussing a small fire in one of the restaurant’s adjacent rooms. To his shock, other staff continued their work without alerting the club’s nearly 3000 patrons. Bailey checked the fire for himself and then raced to the ballroom, where a standing-room-only crowd was anticipating the night’s entertainment. Realizing that no one was warning the patrons, let alone suspending the show, Bailey took the stage. Sure he would be fired for an action that none of his superiors had authorized, he first told the guests to look around and identify the room’s exits. And then, in as calm a voice as he could muster, he reported a fire nearby. The flames soon exploded into a conflagration that fatally trapped 165 customers, but countless more would have been lost had Bailey not taken action well above his waiter obligations.

Or consider a decision by Stephen A. Meyer, a Federal Reserve economist in New York. On the morning of September 11, 2001, Meyer was head of the Federal Reserve’s committee that oversaw the Fed’s lending function, a job that helps keep the economy ticking. After Meyer and colleagues learned that two aircraft had hit the World Trade Center — just blocks from the Fed’s New York office in lower Manhattan — they gradually realized that many of the private brokers and dealers who normally enabled short-term inter-bank lending were no longer able to facilitate anything. Communications had been severed, and dealers at one of the most important market-makers, Cantor Fitzgerald, had been cut-off in the upper floors of the World Trade Center.

By early afternoon, Meyer and his Fed committee believed that the American banking industry was heading for paralysis, a financial disaster on top of the human disaster unfolding less than a mile away. Meyer checked with Washington headquarters: Did his committee have the legal authority to instruct the Fed to restart the inter-bank borrowing market that had suddenly frozen? The answer was uncertain. Meyer recognized that he and his committee would have to decide on their own — despite the risk of later censure. If he used the Fed’s power to enable lending, he could be overstepping his role with the career perils that this might entail. Yet if he did nothing, he knew that the banking sector could grind to a halt, imperiling the entire economy.

Meyer decided to act. Working on the premise that, in his words, he should “do whatever it takes,” by the end of the day he led the Fed to inject more than $20 billion into the banking system, and another $23 billion over the next several days, helping to avert a financial Armageddon. Later, as the crisis aftermath of 9/11 gradually gave way to normalcy, Meyer’s exceptional frontline actions came to be recognized as a heroic moment within the ranks of the Federal Reserve system.

Communications had been severed, and dealers at one of the most important market-makers, Cantor Fitzgerald, had been cut-off in the upper floors of the World Trade Center.

Or turn to the experience of Vanguard Group financial analyst Mabel Yu, who found herself struggling to understand the underlying risks in a host of structured instruments, including AAA-rated mortgage-backed securities that investment banks had been pitching with increasing frequency in 2005 and 2006. Her job was to evaluate and recommend whether Vanguard’s portfolio managers should include such fixed-income investments in their customer offerings, but they looked dubious to her despite their promise of healthy yet relatively low-risk. It proved an especially daunting task since as many as ten new offerings were reaching Yu’s desk weekly, and their underlying assets were typically obscure if not opaque, making appraisal especially difficult. In the meantime, other investment companies were scooping them up and prospering from them.

Yu came to conclude that the AAA-rated mortgage-backed securities contained hidden quantities of sub-prime mortgages at a time when mortgage sellers were becoming far more aggressive and far less transparent. She decided to talk directly with the bankers who were promoting the securities. Rather than addressing her substantive concerns, however, the bankers challenged what they deemed as her obstructionism. Despite the personal disparagement, Yu’s deepening skepticism led her to recommend against investing in the mortgage-backed securities, even as Vanguard’s competitors began to out-perform the firm because of their embrace of the securities.

By mid-2008, however, Yu’s caution proved prophetic as the sub-prime mortgage market imploded, bringing down AIG, Lehman, Merrill and much of the U.S. economy — but not Vanguard.

Finally, consider the account of Tomas Lopez, a Florida lifeguard employed by a national aquatics-management firm. Lopez was on duty on a busy July 4th when several beachgoers raced to his lifeguard stand, reporting that a man was drowning nearby. Lopez leapt from the stand and informed fellow lifeguards and his manager via a walkie-talkie that he was going to make a rescue, adding that the swimmer in trouble was on a section of beach not formally covered by the lifeguards. According to a fellow lifeguard, Lopez’s manager instructed him not to leave his zone. But Lopez disregarded the advice and, along with an off-duty nurse, retrieved and assisted the swimmer until paramedics evacuated him to a hospital.

Like Medal of Honor recipients, Meyer, Bailey, Yu and Lopez had all acted “in the line of duty,” taking personally risky actions on behalf of their enterprise. In doing so, they carried the weight of their organization as they made their decisions, their actions reflecting not only on themselves but also on their employers. The Medal of Honor tradition recognizes and reinforces this connection, focusing attention on what the organization expects of employees when ordinary directives fall short.

What Would We Have Done?

In recognizing people like Walter Bailey or Mabel Yu, we are not suggesting that organizations should replicate a military tradition in their own organization. Nor are we suggesting that such steps would be productive in all organizations.

In financial services, for instance, where annual bonuses carry great significance, non-monetary awards, however well-conceived, run the risk of derision. Peter Dawkins, a retired Army general and 20-year veteran of Citigroup and other financial services, cautioned for instance against testing the idea in banking for this reason. But elsewhere, it could find traction. “This could be a tool for people who want to strengthen the ethic of the business” in their organization, he added, to “create more of what you are looking for and to highly value the people at the frontlines to do these things.”

Elements of such a tool can be found at some firms already. Medical-device maker Medtronic, for example, bestows medals on scientists for breakthrough ideas; law-firm Morgan Lewis recognizes attorneys for their exceptional pro bono service; Peru’s Banco Internacional annually celebrates an employee whose fateful actions best exemplified the extraordinary performance expected of all.

From our study of the Medal of Honor tradition, we have identified three organizational practices that can be particularly helpful for better motivating and guiding exceptional job performance on the frontlines. The first is to identify and honor graphic, tangible accounts of selfless actions. The second is to focus recognition on those who work in the lower ranks of the pyramid. And the third is to incorporate their accounts into development programs for employees both new and seasoned.

Medal of Honor accounts are powerfully instructive because they capture a single individual’s crucial moment of action. And that tangibility helps makes the accounts more memorable and more behavioral than many alternative forms of instruction. The accounts take on special saliency because they help us imaginatively enter a moment of action. We are led to picture ourselves at that same instant of decision and to ask ourselves, what would we have done?

Embracing the power of such narratives, organizational leaders by implication could seek to develop detailed accounts of courageous actions among current and past employees, even borrowing such actions from other organizations if especially compelling. These accounts can then be widely shared and publicly acknowledged by the highest levels of the organization.

The Vanguard Group, through its treatment of analyst Mabel Yu, provides an example of an organization that first identified this sort of extraordinary action and then honored the individual through its most visible channels. The company named Yu its analyst of the year in 2009, the firm’s internal newsletter featured her, and Vanguard founder and industry-legend John Bogle hosted her. In publicly recognizing and detailing her actions, the company helped its 13,000 employees better appreciate the kinds of exceptional actions expected of all when a moment of decision presents itself.

Medal of Honor accounts are powerfully instructive because they capture a single individual’s crucial moment of action.

Contrast Vanguard’s actions with those of the aquatics-management company that employed lifeguard Tomas Lopez. The company dismissed Lopez for leaving his zone, prompting several other lifeguards to resign in protest. The firm came under withering condemnation when the action became public, leading the company to offer to reinstate Lopez (he declined). In punishing rather than celebrating an act of courage, the company had lost a powerful opportunity to signal the kind of action it should have valued rather than eschewed among frontline employees.

The involvement of Vanguard’s executives in honoring Yu parallels a Medal of Honor tradition by which the award is bestowed by the U.S. president. The East Room of the White House on May 16, 2012, for example, became still when President Obama lowered his head for the reading of a new Medal of Honor citation for Specialist Leslie H. Sabo, Jr., who repeatedly exposed himself to hostile fire to protect his fellow soldiers during a 1970 firefight in Cambodia, before he was finally killed in action. When the president presented the medal to Leslie Sabo’s widow — with his platoon survivors present — you could hear a pin drop across the room.

Extraordinary past performance, whatever the organization, is more likely to reinforce exceptional future behavior if recognized by the top of the house. And it is also more likely to do so if reminders of the performance are widely displayed.

At the U.S. Naval Academy, for example, 21 dormitory rooms are marked with a photo and citation of a Medal of Honor recipient who had graduated from the academy — and who had lived in one of those rooms. One of them had been occupied by Baldomero Lopez, who had led a charge over a sea wall at Inchon, Korea, in September 1950, and, moments later, chose to jump on a grenade rather than endanger the lives of his fellow Marines. For retired Brigadier General Thomas Draude, now president of the Marine Corps University Foundation, those citations helped him through difficult times as a midshipman at the academy. “When I wondered if it was all worthwhile, I would go and read the citation of Baldomero Lopez. That reminded me why I was there.”

Comparable public markings are evident at the Marine base at Quantico, Virginia. When officer candidates enter or leave their dining hall, they pass through an atrium with a photograph and plaque honoring Second Lieutenant John P. Bobo, who led his Marines against a surprise nighttime attack of a North Vietnamese company in 1967. Even after losing his right leg below the knee, Bobo refused to be evacuated and continued fighting with a makeshift tourniquet. Though he died of his wounds, Bobo’s actions nonetheless helped inspire his fellow Marines to hold their position. As noted by Colonel Stillings of the officer candidates school, it was by deliberate design that future Marine leaders encounter that story of heroism three times a day on their way to the dining hall.

By repeatedly referencing these accounts, and by naming rooms and facilities after those recognized for their extraordinary actions, organizations keep the accounts and their behavioral implications alive. Recurrent acknowledgment of frontline employees who have performed exceedingly well at a moment of great risk and uncertainty helps reinforce what a company holds dear when standard incentives would not necessarily make that clear.

Focus Recognition on Frontline Leaders

As the Marines’ Medal of Honor training course is first traversed, it becomes strikingly evident that all of the recipients were in the thick of the action. Most were nowhere near the upper ranks nor command headquarters where we would traditionally turn for models of military leadership. The second instructive principle of the Medal of Honor tradition is to honor the frontline rather than the executive ranks.

Nine of the 15 recipients recognized on the Medal-of-Honor training course for Marine candidates at Quantico, for instance, were enlisted personnel. This makes it easier for the rank-and-file to identify with those so recognized — and in turn be motivated to take extraordinary actions of their own.

Subordinate officers always salute superior officers — with one exception: Those of every rank, including the Commander-in-Chief, salute a Medal of Honor holder.

Honoring the frontline also offers a special reminder to those higher in the organization that exceptional behavior among those they will later command is theirs to create. “We tell our candidates that these are the type of individuals you will have the opportunity and privilege to lead,” said Marine Sergeant Major Jason Ruff, formerly the officer school’s top non-commissioned instructor. They “will perform the greatest deeds, under the most arduous condition. Are you ready to lead them?”

The downward respect that this is intended to engender can be seen in one of the most poignant of the Medal of Honor traditions. Subordinate officers always salute superior officers — with one exception: Those of every rank, including the Commander-in-Chief, salute a Medal of Honor holder. Military officers in training are reminded that one day they may be saluting their own subordinates. By implication, company officers would learn that they too may one day be saluting their own employees for exceptional performance at a high-consequence moment.

A well-established avenue for leadership development programs is to immerse learners in the close-in study of others at moments of decision. That is why officer candidates at Quantico are asked to experience the Medal of Honor course, pausing at each of its 15 stations to see the Marine Corps’ leadership principles embodied in graphic form. In the words of instructor Jason Ruff, reliving the tangible actions of others, extended to the private sectors, would serve to reinforce a “culture of selfless leadership so that when things get tough, employees are thinking about the organization and the guys on their left and right — rather than just themselves.”

The developmental principle is to place those who are learning to lead in the boots of those who have previously led exceedingly well at a moment of decision. And for that to be appreciated, tangible accounts of their actions can be invaluable, akin to a compelling business case about an executive-led turnaround.

For example, the account of Marine Sergeant John Basilone in 1942 proved especially gripping to Private First Class Sean Kearns during his Crucible experience in 2012. “Basilone showed exceptional decisiveness,” Kearns recounted a day after completing the course. “He resupplied his men and manned a machine gun — and repaired it — while he was being swarmed by Japanese troops on Guadalcanal. You think to yourself: ‘I need that decisiveness.’ Then you run up the hill, you’re exhausted, and your drill instructor starts shouting, ‘Your fire team isn’t covered.’ You have to be decisive at that moment and take charge,” said Kearns. “The experience really brought the training together for me.”

Crucible graduate Private First Class Robert Retondo similarly articulated how the stories of valor, delivered at the right moment, helped him better grasp the more technical leadership training he received through his course. “You learn about the 14 leadership traits and 11 leadership principles. Your drill instructor could tell you a thousand times why you need those, but it never sinks in until you start hearing those stories when you are exhausted, when you just want to give up,” he reported. “You listen to those citations and realize the leadership those men showed for their fellow Marines.”

By extension, compelling accounts of exceptional performance are likely to stick in the mind of frontline employees more than abstract principles, whatever the organization. And when employees later face a critical moment of their own at work, graphic accounts of others’ extraordinary performance are more likely to come to mind and guide current performance than less tangible behavioral precepts.

While the Medal of Honor is rarely presented — only four have received it during the Iraq conflict and nine from combat in Afghanistan — the military has created other awards that are also given to those who have displayed extraordinary behavior on the frontline, including the Distinguished Service Cross, Silver Star and Bronze Star. The Silver Star, for instance, is awarded for gallantry in action against an enemy, and it has gone to more than 100,000 recipients since its creation in 1932. By analog, if an organization opts to inspire extraordinary frontline performance with a rarely given but highly-recognized award, the instructive power of the personal can be augmented by additional honors extended to larger numbers of recipients. Those decorations can serve to more extensively motivate and guide exceptionally courageous behavior without diminishing the impact of the premier award itself.

For building a leadership development curriculum with these principles, such programs could create detailed cases on frontline employees who had faced one of those moments when extraordinary action was essential. Programs could also take participants to walk the locations where extraordinary employee actions took place, akin to walking the beaches of Normandy or the fields of Gettysburg to appreciate frontline decisions in a way that cannot be recreated in a classroom. The U.S. wildland fire services, for instance, arrange for groups of firefighters to hike through former fire zones to better understand how frontline firefighters made life-saving or sometimes life-threatening decisions in those zones. And finally, leadership development programs can bring recipients of their organization’s awards for exceptional action to meet with program participants, akin to a practice in the armed services of asking Medal of Honor recipients to meet with those in training.

Almost none of us will ever face the choice of whether or not to use our own bodies to shield a comrade from a lethal blast — or even to sacrifice our career for higher principle. Yet narratives of events when frontline leadership is on the line can offer indelible and thus enduring lessons on the importance of exceptional, selfless action by those at all levels of the organization.

From our study of the Medal of Honor tradition, we have come to conclude that many organizations face a powerful but still underappreciated opportunity to learn more from this institution. Two centuries in the making, it has given us a proven roadmap on how to more deeply imbue a commitment to exceptional performance throughout the ranks and to more vigorously ensure its application at moments that matter.

The Medal of Honor is one of the most powerful of the nation’s many military traditions. We believe that many organizations can usefully learn from its operation as they seek to strengthen the readiness and resolve of frontline employees to take the kinds of exceptional actions that may prove vital for an organization’s mission or even survival. The armed forces have built and refined this tradition since the Civil War, and firms are well advised to consider the Medal of Honor’s time-tested principles for inspiring exceptional frontline performance of their own.