Saturday, August 11, 2007

The Ego Effect

Jena McGregor on August 03

Have you caught your CEO showing up to accept obscure awards in far-flung destinations? Staring at himself too much in the tinted glass of his corner office? On the cover of too many trade magazines? You may have a Narcissistic CEO.

Seriously, there are professors who have studied this stuff. Not using my silly measures above, but by counting how often the CEO’s photograph is used in the annual report, the frequency with which his (or hers, of course) name shows up in news releases, how often he uses first-person pronouns in interviews, and how much his pay compares to his second-in-command.

Here’s what Arijit Chatterjee, a graduate lecturer, and Donald Hambrick, a professor of management at the Smeal College of Business at Pennsylvania State University, found: CEOs who score highly on these measures tend to lead companies through many more changes in strategy and resource allocation. Chatterjee and Hambrick also found a correlation between high narcissism metrics and more extreme swings in company performance. Still, they found no correlation between overall performance and ego: “Although narcissists tend to generate more extreme and irregular performance than non-narcissists, they do not generate systematically a better or worse performance,” they write.

The authors studied 111 CEOs of computer software and hardware companies. I have to say I’m surprised—though it might exist more in the brasher valleys of Northern California—that they found any CEOs who in interviews use the first pronoun. These days, I find the media-trained mouths of CEOs to be nearly hardwired to use “we” and “team” when giving interviews. (Most are too focused on their charm offensive, as my fellow blogger Diane Brady wrote about last year.) Still, the study is a fascinating look—who’s ever tried to quantify narcissism?—at how CEO arrogance and personality may at least be tied to, if not cause, effects on employees and shareholders.