What makes a leader great? Many of the greatest leaders in history have had engaging personalities and are thought of as ‘natural’ leaders. They were all undoubtedly high-performing and charismatic leaders. However, leaders like Hitler and Napoleon Bonaparte who were initially perceived to be great leaders had a dollop of a particular personality trait that was a key component of what eventually led to their downfall: narcissism.
Narcissists – so named after the mythical Greek son of gods who fell in love with a reflection of himself in a pool and chose to die rather than leave the poolside – are not all bad. Most psychology textbooks suggest that they suffer from superiority, and explain that they are exhibitionists, exploitative, vain and have an excessive sense of entitlement.
However, as leaders they have many redeeming qualities. For a start, they are charismatic, and can motivate people and generate scores of followers. Unfortunately, they are also sensitive to criticism, poor listeners, and lack empathy and intensely competitive to a point where it can be damaging.
Is narcissism a positive or negative quality for a leader to have then? In a recently completed study, it explored how companies listed on the Singapore Exchange and run by narcissistic CEOs typically perform. It has been demonstrated by a group of leading psychologists in the USA that the extent to which a person uses the first person plural (I, me, my) versus the extent to which they use first person plural (we, us, our) is a strong indicator of the extent to which they are narcissistic.
What was done in our study was to use the latest manuscripts of companies in the Straits Times Index and examine their earnings calls. Earning calls follow earnings released by companies and usually involve the CEO’s candidly answering questions posed by analysts. This enabled our team to assess and compare the candid use of first person singular to plural and correspondingly score the CEOs on narcissism.
These companies were then divided into two groups depending on the narcissism score of the CEO – low narcissism and high narcissism, and the average performance of the two groups of companies over the last three years was calculated.
The result was that our research was consistent with previous research results for other countries where we had conducted studies – countries such as Australia, Hong Kong and Malaysia. Companies run by CEOs with high narcissism scores underperformed companies run by CEOs with low narcissism scores.
For Singapore listed companies, the average underperformance over the three year period was approximately three percent per annum – this is the price of narcissism.
The conclusion to be drawn is therefore that companies run by narcissistic leaders tend to underperform. It is a pity, given the outstanding qualities narcissistic leaders have as strengths.
However, under performance does not always have to be the result. As part of management education, aspiring leaders can be trained to be made aware of their individual strengths and weaknesses. This consciousness will allow them to better manage the weaknesses of their personality in leadership.
Thus when a leader is conscious of their narcissism, the self-awareness helps them overcome the weaknesses, that come with being narcissistic and break out of the pattern that narcissistic leaders are disposed to following. In this way, highly narcissistic leaders are enabled to perform on par or outperform their low narcissism peers.
What makes a leader great then? Are highly narcissistic leaders confined to the paths that their weaknesses lead them down? The answer is no. Self-awareness is the key to becoming an outstanding leader, and a leader must be cognisant of his weaknesses lest they blind him or her. It is only then that improvement can occur, and their leadership will produce effective results.
Author credit: Alex Frino, PhD, Professor & Deputy Vice-Chancellor (Global Strategy)
University of Wollongong, Australia. He is a distinguished economist who fosters the interaction of business with academia. Professor Frino is an alumnus of UOW and Cambridge University, a former Fulbright Scholar, and is one of the best published finance academics in the world with over 100 papers in leading scholarly journals.