Narcissism: The problem with "bold" leadership

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(MoneyWatch) When Eric Schmidt decided that he knew better than the U.S. state department and headed off to North Korea, it looked like a bold move.

When Mondelez CEO Irene Rosenfeld decided that, over the opposition from employees and many of her company's board members, that she would acquire Cadbury, that looked bold, too.

When, after months of wrangling, the CEOs of Xstrata and Glencore finally agreed to merge their huge extraction companies, they looked big and tough and strong.

This is what we expect of leaders, isn't it? Tough decisions in the face of market turmoil, economic confusion and slow growth?.

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But would you like to work for any of these people? In a fascinating study entitled "It's All About Me: Narcissistic CEOs and Their Effects on Company Strategy and Performance," academics Arjiit Chatterjee and Donald Hambrick assessed the fortunes of 111 CEOs in the computer and software industries.

Now, before we proceed let's be clear on the basic personality traits that define narcissim:

1. A sense of entitlement: I'm special and should get special attention.
2. Attention: I like, even need, to be the center of attention.
3. Superiority: I am better or smarter than others.
4. Self-absorption: I spend a lot of time contemplating my extraordinary qualities.

Sound like anyone you work for?

To select the CEOs they wanted to study, the researchers relied on six basic markers of narcissism, including how many times the CEOs photograph appeared in their companies' annual report and on websites; the CEO's prominence in press releases; the use of the first person pronoun in press releases (for example, "I," me," "us,"); the length of the "Who's Who" entry on the executive; and the level of both cash and non-cash compensation the person received.

Assessing the qualities and actions of the 111 chief executives, a pattern emerged. Because narcissists crave attention, they often work hard to achieve glory. That often gets them into positions of power and influence. Once they get there, however, they still need attention and applause. This, according to the researchers, means they are more likely to embark upon what are often considered bold strategic moves, with mergers and acquisitions a particular favorite. Never mind that M&A has a terrible track record -- it gets attention.

And because such execs are self-centred, it doesn't really occur to them to ask whether what is good for them is also good for the business. In fact, the separation between those two is pretty invisible to narcissists.

What the researchers found was that the higher the level of narcissism, the greater the number and size of acquisitions. Narcissists deliver outsize performance -- big wins or big losses. That, in turn, tends to generate more extreme performance and, as a consequence, to generate greater volatility. 

In other words, if you work for a narcissist, you are likely to see plenty of office drama. Lots of big strategic moves, very little steady growth and no guarantees. If that isn't your idea of fun, find a real leader.

[DrMarcTinsley]

One of the things that made George Washington such a great leader was his willingness to ask for input from his generals.

[Terribly73]

What makes narcissism so destructive in people with great power, like CEOs, is that they not only believe they know best, and refuse to solicit and consider others' input, but they also punish those bold enough to disagree with them, or point out flaws in their plan. True narcissists cannot handle criticism, no matter how constructive. A key sign your CEO is a narcissist is if there's an unusual amount of turnover in the position that directly report in to the CEO.

That being said, some level of narcissism is almost required to be a CEO (or president of the US, for that matter), especially of a Fortune 500 company. You have to have a near delusional amount of self-confidence to believe you are indeed worth that kind of salary, are the right person to be in charge of up to billions of dollars' worth of revenue, and should be making critical decisions that will impact potentially tens of thousands of people, maybe more. It's when narcissistic traits cross the line into true pathological narcissism that a company can run into real problems.

It's a difficult balance to strike, which is why so few can.

[LisaRuzylo]

Check out "People of the Lie: The Hope in Healing Human Evil". This whole country is infested with a narcissism epidemic. Couple this rampant trait with diffusion of responsibility due to specialization and laziness, ie the extreme comfortable conditions that are allowed of CEOs, congress, et al, and there is the tremendous breeding ground that is....evil. In all it's seemingly innocuous, benign, very debilitating ways, that the majority of us here look at and call successful. The downward spiral but what do to do?

[MLSimon6808]

"People of the Lie" is about people with PTSD.

[LisaRuzylo]

MLSimon6808....ummm, No, it's not. Only if you want to call the "fog" that pervades within the narcissistic, corrupt, ie evil leaders as being PTSD, ie that which is something out of their control. It can't be their fault. No, MLS. The "Hope for Healing Human Evil", this book, is absolutely NOT about PTSD. Only in part perhaps in it's several vignettes conveyed of various afflicted people.

[Kovacsmaster]

Narcissist are monsters, they ruin peoples lives, cause a lot of confusion and depression, can't be trusted, are complete phonies, in short THEY SUCK!

[UlfBorgesson]

Narcissistic leaders are only half the problem; we also have narcissistic employees, students etc.

Our culture has brought narcissism to new levels in all parts of society ("reality"-TV, anyone?).

Christopher Lasch wrote about this in 1979 (The Culture of Narcissism), and the last 30 years has more than proved him right.

[Livalytl]

Incredible book on this subject focused on what causes Institutional Blindess (particularly by corporate leadership) is called Seeing Systems by Barry Oshry. One of the greatest books I have ever read on hubris in organization dynamics. For those who want to know why so many otherwise great organizations fail it is a MUST READ!!! Been around a long time but I understand it is now required reading in many MBA programs...as it should be.

[CharlieImprov]

Sounds a lot like Congress.

[davidjones022]

"1. A sense of entitlement: I'm special and should get special attention.
"2. Attention: I like, even need, to be the center of attention.
"3. Superiority: I am better or smarter than others.
"4. Self-absorption: I spend a lot of time contemplating my extraordinary qualities."

Based upon the above, wouldn't someone who DEFINES another person as a Narcissist be somewhat of a Narcissist themselves?

[Swejan100]

No

[harvyk100]

Why would that make the a narcissist themselves?

Basically a narcissist effectively only sees themselves. Everything they do is about them. In fact a narcissist may not even be able to identify another narcissist as they will see qualities in others which reflect on themselves (that drive / passion / everything is always "I").

[davidjones022]

"1. A sense of entitlement: I'm special and should get special attention.
"2. Attention: I like, even need, to be the center of attention.
"3. Superiority: I am better or smarter than others.
"4. Self-absorption: I spend a lot of time contemplating my extraordinary qualities."

Based upon the above, wouldn't someone who DEFINES another person as a Narcissist be somewhat of a Narcissist themselves?

[skiboatdriver]

Really puts into perspective a lot of the events that have happened in business over the last few years.