Always Look on the Bright Side – The Advantages of Having a Narcissistic CEO

On the 4th of April 2017 President Assad’s military,launched chemical weapons at the rebel-held town of Khan Sheikhoun in north-western Syria, in what has been a bloody and prolonged civil war. More than 80 people were confirmed dead with many more suffering serious injuries. What has outraged the world community and The United Nations in particular, was that most of them appeared to be innocent civilians and worse, many of the dead were children.

On the 6th, President Donald Trump launched 56 Tomahawk missiles in a “precision strike” on the airfield from which the jets which delivered the chemical attack were launched. The Tomahawks rendered the airfield unusable, destroyed aircraft and killed military personnel.

Strong Signal

What is probably more important, is that it sent a strong message to Assad and his ally in the conflict, Russia, that such attacks on civilians will no longer be tolerated by the USA and its allies, who although not consulted in advance, fell in behind Trump’s action. It was a bold and dramatically quick turn of events (allegedly instigated by the tears of his daughter Ivanka, a mother of three) which was in complete contrast to the softly, softly negotiating tactics of Obama, who by and large had been unsuccessful in his diplomatic approach to Syria. Now, at this moment, it is too early to see how Trump’s action will pay off, if indeed it will, but for once the world is talking about him in admiring tones, in contrast to how his presidency has gone so far.

Narcissist

Much has been made of the fact that Trump, like other successful business giants, fits the profile of a narcissist. This has been used by many as a commentary on his fitness in the role of Commander-in-chief. But there is another dimension to be considered. Can the decisive and often bold actions of a narcissistic CEO lead to company success? And what signals this gives us about a Trump presidency. There are certainly academics who think so and moreover, some who suggest that rather than confine a discussion of narcissism to the pages of psychology and medical journals it is a valid and fitting area of study in the annals of management research.

Narcissistic CEO’s

One such Academic is Wolf-Christian Gerstner from the University of Erlangen-Nuremberg. He and his collaborators undertook and empirical study over many years examining the role of narcissism in the success of start-up biotech industries. They devised a series of proxy measures for narcissistic behaviour in CEOs, for example: one such measure was how prominently their image was displayed in company materials, photographs around premises etc.. Their results of more than 70 companies suggested there was a correlation between investment, entrepreneurial success and the degree of narcissism of the CEO.

Gerstner et al. attributed the greater success to the fact that narcissists thrive on attention and focus on themselves. Thus, if they took bold decisions to invest in a particular as yet untested strategy, they would garner excessive praise and attention, achieving their “narcissistic supply”. They concluded:

“This is why they tend to attach a high probability of success to anything they do and why they are particularly drawn to actions and strategies that will earn acclaim for their audacity and bravado. They take risks that their more-timid and less confident counterparts would shun. Narcissistic CEOs possess a near-unshakeable belief that their company, under their leadership, can make new technology work”

They suggested that this strategy was particularly successful at a time of rapid change and gave such companies a competitive advantage in a market that was rapidly growing and changing:

Bold Actions

“Narcissists may be self-promoting, self-absorbed and even downright annoying, but they may also be the best bet when bold and unconventional actions are needed to save or enhance an organization in times of radical environmental changes. It is during those times when their supreme confidence and willingness to go beyond the incremental changes, are most likely to pay off.”

They termed this “The Bright Side” of having a narcissistic CEO. So will this bold behaviour of Donald Trump in the political sphere work as well as in the business one? We must be more cautious than Gerstner since other management researchers have applied the same measures in a range of organisation including IT and have interpreted their results differently. Arijit Chatterjee and his collaborators used the same measures as Gerstner’s team but applied it to companies in the IT software and hardware business. The looked at prominence of CEO in relation to company documents, images and general “celebrity” culture which was their proxy for narcissisms and their results were somewhat different:

“Results of an empirical study of 111 CEOs in the computer hardware and software industries in 1992-2004 show that narcissism in CEOs is positively related to strategic dynamism and grandiosity, as well as the number and size of acquisitions”

They judged that it led to fluctuating performance and conclude that:

“The results suggest that narcissistic CEOs favour bold actions that attract attention, resulting in big wins or big losses, but that, in these industries, their firms’ performance is generally no better or worse than firms with non-narcissistic CEOs.”

So will Trump’s gamble as CEO of USA, attacking Assad and effectively warning him not to hurt civilians pay off? It is a strategy which indeed carries risks, especially if it is his preferred response. He certainly won’t be able to use this tactic too often or in other regions. As an old Chinese proverb suggests:

“May you live in interesting times”

With a narcissist at the helm, we may have little other choice.

Sources:

  • The Bright Side of Narcissistic  CEO  By Wolf-Christian Gerstner, Andreas König, IMD Professor Albrecht Enders, Donald Hambrick –  IMD December 2011
  • It’s All about Me: Narcissistic Chief Executive Officers and Their Effects on Company Strategy and Performance Arijit ChatterjeeDonald C. Hambrick: Administrative Sciences Quarterly Vol 52, Issue 3, 2007

About Alexander Burgemeester

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