Tuesday, July 24, 2007

Studying company chiefs: Is there a narcissism link?

Pennsylvania State University professor Donald Hambrick probably didn't have to try too hard to find a narcissist among tech-company CEOs for his study (with coauthor Arijit Chatterjee) on the impact of their behavior on their companies.

After all, the pool includes larger-than-life characters such as Microsoft Corp.'s Bill Gates, Apple Inc.'s Steve Jobs, Dell Inc.'s Michael Dell and Oracle Corp.'s Larry Ellison. International Business Machines Corp.'s Sam Palmisano may be one of the few tech CEOs who seem genuinely uncomfortable in the limelight.

Hambrick, who declined to name any of the participants in his study, is trying to prove a point: that companies headed by narcissistic CEOs have higher highs and lower lows than those headed by humbler types. The professor of management at the university's Smeal College of Business based his conclusion on some interesting metrics, such as the size of the CEOs' photos in the annual report and how often they refer to themselves using the first-person singular "I" or "me" in media interviews. He chatted with PhillyInc's Jonathan Berr about his study:

PhillyInc: How did you determine CEO narcissism by photos in the annual report?

Hambrick: It's a four-point scale. If the CEO's photo is more than a half of a page and of him and him alone, that's a four. . . . Narcissistic CEOs not only have their photograph in the report, but it's big and tends to be of them alone.

Q: What other traits do they have?

A: A narcissist has an intense self-admiration but a chronic need to have that self-admiration reinforced by others. They tend to have an air of arrogance, and are often dismissive. They really like to be in the limelight.

Q: Don't all CEOs refer to themselves in the first person since the media usually question them directly?

A: If it were always on the basis of the questions being asked, then we wouldn't see any difference between them.

Q: How do companies fare under narcissistic CEOs compared with more egalitarian ones?

A: It may be that narcissists are why wild and bold things get done. The likelihood of a big win or a big loss is greater. Investing in a company that's headed by a narcissistic CEO is going to tend to be a wild ride.

Q: What's it like to work for them?

A: My hypothesis is that it would be very rare to find someone who scored very high on our narcissism scale who had a career of steady incremental advancement in companies. Narcissists can't handle that.