RESEARCH NEWS
Narcissist CEOs not necessarily good for business
Cutting-edge research led by Macquarie Graduate School of Management Dean Alex Frino and colleagues about the impact of narcissistic leadership traits on corporate performance is continuing to attract media attention both in Australia and around the world.
Their research, which uses natural language technology to identify narcissism, as well as other personality traits, by analysing CEO’s verbal communications, ultimately aims to quantify leadership qualities as predictors of company performance in the market, as well as informing strategies to better educate company leaders of tomorrow.
The more often the CEO uses the first person pronouns (I, me, my, mine, myself) in their answers to analyst questions, the more they are considered to be narcissistic.
“We developed a method of assessing narcissistic personality traits in the CEOs of the country’s top 100 companies, and what impact this trait has on leadership style,” Frino explains, adding that the research showed that while a bit of narcissism is fine when the economy is booming, when times are tight it’s not so good.
The power of modesty
Frino’s research showed that the 10 least narcissistic CEOs in the ASX’s top 100 companies, which includes Amcor’s Ken Mackenzie and Fortescue’s Nev Power, more than doubled the performance of the most narcissistic CEOs.
The group of firms in the portfolio with the least narcissistic CEOs also outperformed the market over the same period.
“While people have had lots of fun speculating about who is Australia’s most narcissistic business leader, the research has a serious side as well,” Frino explains.
“By identifying the traits of leaders and how these help them perform in different business conditions, we will also be able to help MBA students understand their own personality types, as well as how they can manage relationships with peers and subordinates who may or may not exhibit these traits.
“Together this understanding will help them run better organisations,” he says.
“By understanding their personality and how to deal with it, they will also be better able to recognise when the time is right to let their personality come out, and when is the time to be more conservative.”
I worked in international telecommunications for 35 years (prior to joining MQ) and it would be most interesting to extend this study to the world’s top 100 telecommunications companies.
George Maltby (CEO of OTC prior to its “merger” with Telecom) is not in the least narcissistic. OTC’s performance (on almost any measure) was excellent (even if it was a monopoly) when compared to other countries’ (monopoly) international telecommunications service providers.
On the other hand, Sol Trujillo’s ( former CEO of Telstra, that many would consider him a narcissist), performance in the CEO role could easily be described as (relative to say, current CEO, David Thodley) a disaster.
In a career of more than 40 years of largely professional services and executive management, including NSW Government for 4 years, two Australian private corporations for a total of 12 years, two international public companies for a total of 14 years and one Australian public company for 9 years, I have work, with and for, 9 CEOs of which at least 4 demonstrated overt narcissistic personality tendencies in decisions and actions. One other showed a strong narcissistic action when confronted by an adverse financial dilemma. One public company where two of the narcissistic CEOs worked remains close to receivership due to decisions of those CEOs while one private company was destroyed by the narcissistic CEOs decisions. Both these companies had experienced a period of great success and unbelievable potential. I am of the belief that we all to a greater or lesser extent posses a narcissistic trait in our personality. Some regularly operate from that place others of us only find that trait in perceived ‘life threatening’ situations. It has been a wonderful, and just occasionally painful, journey to work and learn my lessons from these people. I thank them for there presence and that experience in my life.
I believe that the State and Federal Public Services have more than their fair share of narcissistic senior management. At another time I was employed in a NSW Government department managed by a true narcissist. He succeeded in alienating virtually every employee who had direct contact with him during working hours. Productivity was poor and finally the Department was merged with other areas of the Public Service. A truly horrible experience for me.
Yes, this is a great research area. I was part of the management team on a gold mine outside of Australia and worked with several successive General Managers. The position I occupied gave me access to the relevant CEOs but on a daily face to face basis I had to work closely with the GMs.
It is interesting that our most significant in person and most productive GM was one who always stressed that it was the “team” that was important in Operations (production of ore and its gold); it was the “teams” we ourselves put together in our respective departments that would keep our mine running. Under this particular GM the mine went through what we called ‘our golden era’ because set targets were always achieved, all HODs and their seconds lived as a closely knit working team and each of us treated our respective departmental teams as part of our working family. For me, I took this working philosophy into the community – that’s another story.
Much later we lost our great GM (he moved on) and on the strength of his production records the company was sold and then we got another significant GM: teams slowly died under the new onslaught of “I ” and “you will”. Under a new CEO and this GM an exodus of the previous management team began : assets stripped, Operations dropped and its production levels plummeted; this GM also became disillusioned and he eventually guided the resale of the mine. I retired in 2007 approximately 12 months before the resale.
The mine has never returned to anywhere near its golden era, yet it holds enormous potential. I would say the rot set in under the “I” and “you will” strategy of management, operations and production. The further interesting point here was the “I” and “you will” was not the face shown in negotiations with government, NGOs and Church/Faith based organisations, which meant that back on site the team had to somehow reconcile this contradiction in our work and deal with the “gap” the contradiction was developing.
I did my BA at Macquarie as a mature age student, loved those days, then went on to Sydney and did my PhD in Anthropology and eventually worked on 2 gold mines in PNG.
Great research idea! Wish you the best of luck.
Dolly
Yes, I have worked in direct contact with 6 CEO’s over the past 18 years at both a national and international level. Without doubt the more narcissistic the CEO the more destructive it was on the companies culture and overall trust levels within the business. I believe there is also a strong link between this character profile and lower levels of employee engagement in addition to the slow errosion of company values and senior level leadership conduct.
I work with an extreme narcissistic manager with a team of around 10 people. All of us technical people feel the same way about the manager in that he takes offence easily, is often extremely rude and lacks empathy and compassion. He is also very moody so unpredictable and inconsistent. He does not consult his staff about decisions which directly affect us. He does not tell us when he is going to be away. Does not feel the need to communicate except by stating what is going to happen and how. He actively discourages personal development even when it has to do with our work duties. He always talks about himself and how important his work is, although he criticises people who are hard working and lose flex time or honorary researchers who come to work after they’ve retired. When something goes wrong he blames others; nothing is ever his fault. He claims a project has been a success even when it fails. He has a condescending and patronising manner to those below him but is incredibly charming when he needs to be.
Unfortunately the manager above this manager is ineffectual and appointed our manager so he will not admit our manager is incompetent and a poor manager. Many complaints have been made about our manager but nothing is done to change the situation. It has become a toxic environment in which to work and the only solace is that the technical team is good and we support each other. This manager would not survive outside the public sector. I feel we all need counselling on how to cope.
In Defence, many of the Officers exhibited NPD or at least, very strong traits. Indeed, I read a psych report of a person that described strong N traits “which are not uncommon within the Defence forces”…in the context that the report said this person had no concerning problems.
Defence also rewards (maybe unknowingly) this kind of behaviour. It is steeped in the culture. The sailors (non officers) tend to not have these traits but were still odd in that they all seemed to exhibit the same clone style behaviour.
Defence is constantly in the media for bullying and deception. Inquiries yield the truth…….sometimes, yet the outcome does not change….the behaviour continues. I believe they need the “help” of forensic psychiatrists and psychologists to alter the culture….waiting generations for a small culture change each generation is unlikely to occur.
NPD do not make for a safer Defence model in wars. In this modern society, very few Defence personal are placed in an old fashioned “you must follow orders” situation and these few come from the Army. The rest of them are in exceedingly safe, almost boring situations where NPD and petty power plays take so much time, money and lives.
I guess the other place is in hospitals…..the medical schools are trying to screen such personalities now.