Narcissistic CEO’s not good for business

Companies led by less narcissistic CEOs have significantly outperformed those led by their more narcissistic counterparts, according to research conducted by the MGSM. 

Analysing the returns of companies in the ASX 100 over an 18 month period (Sept 11 – March 13), the research team, led by Professor Alex Frino, Dean of MGSM, found that the least narcissistic CEOs experienced the highest returns. In fact, the 10 least narcissistic CEOs in the ASX’s top 100 companies 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.

The data was compiled using a ‘natural language technology’ developed by the research team to analyse a CEO’s use of the first person pronouns (I, me, my, mine, myself). The more often the CEO uses the first person pronouns in their answers to analysed questions, the more they are considered to be ‘narcissistic.’

The research also found:

• The most narcissistic CEOs are in the Telecommunication Services sector, followed by mining (materials)
• The Consumer Goods industry appears to attract the least narcissistic CEOs
• There are only four female CEOs included in the study and they rank between 59 and 85.

“Many leaders dominating the workforce today possess narcissistic leadership traits, and in this era of constant change and innovation, it seems natural that charismatic, risk takers would take charge,” said Professor Frino, Dean, MGSM.

“However, this research shows that over the last 18 months, during a period of economic uncertainty and when conditions are tough, it is the less narcissistic leader who has performed best.”

“Perhaps, if we had extended it back to before the global financial crisis we would have seen very different results,” he said.

Narcissism is only one of many personality traits being examined by the MGSM research team as part of more extensive project to be released later this year.

The study ultimately aims to quantify leadership qualities and personality traits as predictors of company performance in the market, as well as informing strategies to better educate future company leaders.

Professor Frino said the study would directly inform MGSM curricula. “I’m in the business of creating the next wave of elite businesspeople,” he said. “This is an innovative top-down approach to identifying what personality traits typify very successful executives, so we can work that knowledge into the way we teach and mentor our students.”

Cover image courtesy huffingtonpost.com