OF MIRRORS AND ECHOES: HOW NARCISSISTIC CEOS BUILD THEIR PROFESSIONAL WORLDS

In this first of a two-part article, Arijit Chatterjee, Professor of Management at ESSEC Business School, shares his research on how narcissistic CEOs* succeed in satisfying their need for acclaim and its impact on the board and the firm. 

*From the paper “Master of Puppets: How Narcissistic CEOs Construct their Professional Worlds”, by Arijit Chatterjee and Timothy G. Pollock, to be published in the Academy of Management Review.

It is odd that in the story of Ovid’s Metamorphosis, however much the nymph Echo expresses her praise, Narcissus turns his handsome head even further to reject her. Indeed, such was the frequency of her wooing advances that poor Narcissus turned to gazing at his own reflection, falling in love with himself and ultimately transforming into a dainty flower that bears his name. So why is that odd?

Odd because nowadays the chances are that if you were a director and showered your narcissistic CEO with as much praise and adulation as Echo, you would most probably be guaranteed a place on the board and a healthy reward to go with it. For not only would the CEO greet the echo of your words with wide-open self-love, in doing so he or she would satisfy the crucial need for a mirror of reassurance in his or her Herculean capacities.

This is one of the conclusions that Professors Arijit Chatterjee of ESSEC Business School and Timothy G. Pollock of Pennsylvania State University have drawn after extensive research into CEOs and narcissism that has culminated in the paper Master of Puppets: How Narcissistic CEOs Construct their Professional Worlds to be published in the Academy of Management Review. Building on existing research and explaining how narcissism in CEOs impacts firm performance, their theory goes beyond a simple description of narcissism in two ways: first, they explain how  CEO narcissism influences the structure and management of firms’ boards, top management teams and the media; and second, they see how narcissistic CEOs manage the dilemma of the two competing behavioral driving forces behind narcissism: that of seeking acclaim and social approval versus the need to dominate and control others.

Of narcissism and the CEO’s tragic dilemma

Narcissism was introduced in psychology in the 19th century by Havelock Ellis to describe people absorbed in self-admiration. Soon after, Sigmund Freud argued that narcissistic individuals act out of a desire to strive for an ideal-self. Over the years, researchers have examined narcissism through different lenses, from treating it as a clinical disorder to seeing it as a cultural trend and, in recent times, a personality trait that can touch us all.

Narcissism is generally seen to be characterized by grandiosity, self-focus, and self-importance. As a result, narcissistic CEOs consider themselves superior to others with respect to such qualities as intelligence, extraversion, decision-making and openness to experience. They are also extremely confident of their capabilities, rating themselves highly on leadership qualities and contextual performance irrespective of their actual performance. At the same time, and this is one of the painful aspects of narcissism, they have a vulnerable self-image which makes them both eager to seek recognition from others, but also feel particularly wounded when criticized. As a result, their reaction might at times turn to extremes of behavior.

I know what I want

The narcissistic CEO seeks acclaim. The public self – attitude and behavior in the presence of others – is a mix of how a person intends others to perceive them (which might differ from their private perceptions of themselves) and of others’ actual perceptions. A non-narcissistic CEO, for example, might have a “heroic” public self at work but a more humble private self that is based on a modest family background or other life experiences. For most of us, our public and private selves are kept distinct. However, narcissists often adopt, on a private level, the image they display publicly: they become indistinguishable in the narcissist’s mind. As such, a narcissistic CEO will be drawn towards actions that draw public applause and adulation: a bold speech, a spectacular takeover, an impulsive decision or a risky hard-line approach when entering an important negotiation. Not altogether negative, the need for acclaim may foster great ‘leadership moments’ that make narcissistic CEOs better performers in times of crisis. Finally, narcissists routinely, sometimes excessively, indulge in social comparison with others and fervently tend to pursue the goal of continually obtaining external confirmation of their superiority to satisfy their inner need of acclaim.

And I know how to get it

So how they obtain this acclaim? One tactic is to try to achieve celebrity status. And in this respect, the narcissistic CEO provides the very thing that the media are looking for: an actor that takes bold and unusual actions, who earns the badge of ‘rebel’, and who creates a kind of ‘dramatized reality’ that engages audiences emotionally and increases the appeal of the content that the media produces. Media coverage, however, can be both good and bad for the firm: one the one hand it can provide greater external support, higher compensation and improved stock movements. On the other, CEO celebrity has generally been associated with subsequent poorer firm performance. This is due, it is suggested, to the CEO’s reluctance to change the very strategies that got him/her to the top in the first place.

A narcissistic CEO will also tend to choose high-visibility industries that increase their chances of being noticed by journalists and will not hesitate to venture into the unknown: new areas of thought, acquisitions, research, products or technology. Such self-confidence will naturally make them more attractive to boards wishing to recruit them. Hiring a publicist helps in this respect, and while usually giving access and information to journalists that allow the media to make them celebrities, they are also more likely to punish journalists who portray them unfavorably.

Finally, narcissistic CEOs will further seek acclaim through two other tactics – accessing prestigious and recognized affiliations such as high-status universities or clubs, holding executive positions or directorships at top companies – or being on the boards which they then influence to populate with high-status directors. According to Chatterjee and Pollock, this creates both a problem and a conundrum. The problem first: group performance declines when there are too many high-status members, which very likely results from conflict within the group as they compete to position themselves atop the local status hierarchy. The conundrum? Narcissistic CEOs’ quests for domination may face resistance if they populate the upper echelons of their organizations with lots of globally high-status actors. The authors argue that narcissistic CEOs get around this by the manner in which they structure and manage their top management teams and boards differently to gain both the benefits of internal dominance and external acclaim: by placing people in their management teams they can easily dominate and subject to coercive management tactics; and by taking advantage of the relatively more episodic activity of board meetings – and the high-profile members who can enhance their own status – they can stage-manage interactions, treat peers ceremonially and employ large slappings of flattery and ingratiation when necessary. As we can see – the narcissistic CEO is indeed right: any old echo won’t just do. Choosing one’s echoes wisely gives resonance to any acclaim.

In the next part to this article, Professor Arijit Chatterjee discusses on a second need the narcissistic CEO has to satisfy – dominance – and explores the impact of this tendency on top management teams. 

With special thanks to ESSEC Knowledge

The Council on Business & Society Global Alliance is an international alliance between four of the world’s leading business schools and an organiser of Forums focusing on issues at the crossroads of business and society – The Council Community helps bring together business leaders, academics, policy-makers, students and journalists from around the world. Follow us on Twitter #The_CoBS

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s