Are narcissistic CEOs bad for business?
Share Now on:
Silicon Valley loves a charismatic founder story. But there’s a difference between vision and leadership and … narcissism. New research shows that narcissistic CEOs are bad for business. Jennifer Chatman, a professor of management at UC Berkeley’s Haas School of Business who has researched the tech industry, found that narcissistic CEOs tend to pay themselves more and pay their executives less. They get involved in more lawsuits because they take more risks than they need to. And they tend to hire people more because of their loyalty than their skills or judgment. Molly Wood asks Chatman if the myth of the genius founder means a lot more narcissists in tech. The following is an edited transcript of their conversation.
Jennifer Chatman: We hear a lot about CEOs who are founders in the technology industry adopting behaviors that appear high on the narcissism scale. But, in the end, there are as many founders who are not narcissistic as there are founders who are narcissistic. So it’s not really a causal factor. You don’t have to be a narcissist to be a founder.
Molly Wood: It sounds like it’s hard though to disentangle those two perceptions, right?
Chatman: It’s very hard to disentangle them, particularly if you think about being a board of directors who’s selecting a new CEO, and the CEO is savvy enough to put his or her best foot forward. It’s much easier to see the energy and the vision and the confidence and harder to detect how the person treats other people, how much he or she will claim credit for success and so forth. And so one recommendation is to really build into evaluation tools the ability to get a much more nuanced understanding of these kind of downsides of the narcissistic personality.
Wood: What will it take for companies to get better, boards of directors to get better, venture capitalists to get better at weeding out these personalities?
Chatman: Well, I think what’s so tempting in the entrepreneurial world is that entrepreneurs are almost selected based on having delusions of grandeur, thinking up things that haven’t existed before and having confidence in those visions. What boards of directors need to do though is go further and try to evaluate not just the idea and the confidence of the person proclaiming the idea, but what is their long-term source of knowledge going to be? Are they going to only rely on their own instinct and their own ideas?
And now for some related links:
- Narcissism isn’t unique to the tech industry. A 2010 study of college students found that the personality trait has increased by more than half since the 1980s. Fast forward eight years and a trillion selfies later, and well, here we are.
- Next Saturday in Berkeley, California, will be the Our Music Festival, the first music festival to be powered by blockchain technology. We don’t fully understand all the tech involved, but Zedd and Big Sean are playing.
- Happening in San Francisco: the fourth annual Tech Inclusion conference. It’s focusing on how to get underrepresented voices into the tech industry and how to build better cultures into the tech world.
- Molly will be in Chicago Oct. 18 for Chicago Ideas Week to moderate a panel about artificial intelligence and soak up that crisp Chicago air.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.