Why Do the Bad Guys and Gals Win at Work?

Do the bad guys and gals actually win, and the nice folks finish last, in organizations?   Tomas Chamorro-Premuzic, CEO of Hogan Assessment Systems and Professor of Business Psychology at University College London, writes about this interesting question in an HBR blog post today.   He examines the "dark triad" of personality traits:  psychopathy, narcissism, and Machiavellianism. 

Chamorro-Premuzic reviews the literature about these three traits.   He writes:

It should be noted that, unlike clinical personality traits, these traits are normally distributed in the population – e.g., you can score low, average or high – and perfectly indicative of normal functioning. In other words, just because you score high doesn’t mean that you have problems, either at work or in your personal life. And despite the antisocial implications of the dark triad, recent research has highlighted a wide range of career-related benefits for these personality characteristics... An impressive 15-year longitudinal study found that individuals with psychopathic and narcissistic characteristics gravitated towards the top of the organizational hierarchy and had higher levels of financial attainment. In line with those findings, according to some estimates, the base rate for clinical levels of psychopathy is three times higher among corporate boards than in the overall population.

Why do the bad guys and gals rise to the top of many organizations?  He points out that these folks tend to have higher self-esteem.  Moreover, they tend to be extroverted and charming.  They are curious and competitive.   They can seduce and intimidate.   Self-esteem, charm, curiosity... these are not bad things.  In short, there's a "bright side to the dark side."  The problem is when you are extreme with regard to this "dark triad" of psychopathy, narcissism, and Machiavellianism.  In that case, the bad guy or gal may succeed in getting to the top, but at the expense of organizational effectiveness.  

Extroverts Earn More Than Introverts

Business Insider reported yesterday on a new research report from Truity Psychometrics.   The firm examined the relationship between personality types and compensation levels.   Not surprisingly, they found that extroverts tend to earn more than introverts.  For example, an ESTJ (one of the Myers-Briggs personality types) earned $77,000 on average, while several of the introverted personality types earned less than $40,000.   Why the major discrepancy between introverts and extroverts.  Truity's research suggests that extroverts tend to have more managerial responsibility.  On average, the extroverts in their study managed 4.5 others, while the introverts only managed 2.8 people on average.  In the Business Insider article, Susan Cain - author of a best-selling book about introverts - argues that extroverts are chosen more often for management positions because their outgoing nature creates a perception of leadership competence.  

Cain argues forcefully for the efficacy of introverted leaders.  Actually, the research does not show that one type of leader is clearly stronger than the other.  As always, it depends.  Adam Grant, Francesca Gino, and David Hofmann published an interesting article several years ago titled, "Reversing the Extraverted Leadership Advantage: The Role of Employee Proactivity." They conducted a field study at a national pizza chain.   They examined 57 locations within that company, and the scholars analyzed the link between personality and performance.  They found that each unit's performance hinged on the match between the leader's personality type and the followers' personalities.  Here's an excerpt from HBS Working Knowledge about the study:

A new study finds that extraverted leaders actually can be a liability for a company's performance, especially if the followers are extraverts, too. In short, new ideas can't blossom into profitable projects if everyone in the room is contributing ideas, and the leader is too busy being outgoing to listen to or act upon them.  An introverted leader, on the other hand, is more likely to listen to and process the ideas of an eager team. But if an introverted leader is managing a bunch of passive followers, then a staff meeting may start to resemble a Quaker meeting: lots of contemplation, but hardly any talk. To that end, a team of passive followers benefits from an extraverted leader... Sure enough, they observed high profits in stores where the employees were relatively passive but the managers were extraverted. On the other hand, when employees were proactive, the stores led by introverted managers earned high profits. Meanwhile, profits were lower in stores where extraverted managers led proactive employees and introverted managers led passive employees.

The Difference Between the Top Job vs. Second-in-Command

In this article in the Wall Street Journal, Phred Dvorak writes about the difference between the CEO position and the COO position. Dvorak writes, "CEOs not only perform different tasks from their second-in-commands -- who typically focus on running operations -- but they have to act differently, too. That means the two roles often demand very different personality traits, say people who have been there."  He goes on to quote a number of executives who argue that some folks have the personality traits required to be a highly successful COO, but they don't have the attributes necessary to thrive as the CEO.   

I will acknowledge that some second-in-commands are not well-suited for the top job.  However, I think it's rather simplistic to argue that the two jobs require fundamentally different personality traits.  After all, most successful CEOs did spend time as a second-in-command prior to taking the top job.  I think it's more important to think about the skills, activities, and behaviors that differ between the two roles.  Then those who aspire to these roles must think about how they must CHANGE their behavior to thrive in each role.   Perhaps it may require some development or coaching to adjust to the new role.  In the end, a learning/development mindset enables people to consider taking on one of these roles and to grow into the job.  A "fixed" mindset simply falls back on the "traits" argument, suggesting that some are suited for particular roles and others are not.   Stanford's Carol Dweck has done extensive research about how those children with a developmental mindset are more successful in school than those with a fixed mindset.  I would argue that the same goes for executives.  Those who simply take their talents and skills as fixed are not as likely to succeed.   Those who believe that they can continue to grow and develop, even at a later stage in their careers, are more likely to thrive in various roles. 

Feeling Guilty About a Mistake? Is it a Sign of Leadership Potential?

Stanford Professor Francis Flynn and doctoral student Becky Schaumberg have conducted an interesting new study about leadership.    They administered a personality test to groups of 4-5 people.  The test examined guilt proneness, shame proneness, extraversion, and other traits.  They were particularly interested in the distinction between guilt and shame.   Feeling guilty means that someone "feels bad about a specific mistake and wants to make amends."  Feeling shame means that someone "feels bad about himself or herself and shrinks away from the error."

In this experiment, the groups had to perform two tasks after completing the personality inventory.   The subjects evaluated each others' leadership qualities after completing these tasks.  It turns out that the people who scored highest on the "guilt proneness" measure tended to be identified as the strongest leaders.  In fact, guilt proneness "predicted emerging leadership even more than extraversion."  According to Schaumberg, "Guilt-prone people tend to carry a strong sense of responsibility to others, and that responsibility makes other people see them as leaders."  

Well... I guess I may have some leadership potential... after all, I'm Catholic, and we are experts at feeling guilty!   Seriously, though, I think the study points to something very important.  Feeling a responsibility to others is the mark of a good leader.  Moreover, wanting to atone for your mistakes, rather than simply trying to cover them up, makes for an effective leader.   I wonder how we might look for those characteristics as we interview young people for leadership positions early in their careers.  Thoughts? 

Are Risky Personal Behaviors Associated with Risky Business Decisions?

Bob Sutton's blog has pointed me to a terrific article by New York Times writer Steven Davidoff.  The piece is titled, "A Mirror Can Be a Dangerous Tool for Some CEOs."   Davidoff examines the effects of CEO personality on business actions and performance, drawing on some interesting academic research. Here is an excerpt:

Arijit Chatterjee and Donald C. Hambrick said in a 2006 paper that narcissism among chief executives encouraged more volatile company performance. In a study of 111 chief executives in the technology industry, the authors found that indicators of narcissism correlated not only with company performance but also with the pursuit of deals.  The study was criticized for overstating the power a chief executive has over a company. But additional research has shown that a top executive’s personality can have powerful effects on how a corporation is operated.  For example, Henrik Cronqvist, Anil K. Makhija and Scott E. Yonker found that the level of debt for a company was related to how much a chief executive was willing to borrow to buy a house. Matthew Cain and Stephen B. McKeon looked at chief executives who had pilot licenses. Flying small planes is viewed as thrill-seeking behavior. Professors Cain and McKeon found that chief executives with pilot licenses were more prone to engage in acquisitions, with the theory that takeovers are risky, yet exciting ventures.

I think the latter two studies are truly fascinating.  One of our Bryant honors students (now finishing his MBA at Duke) completed a senior thesis examining similar relationships.  He analyzed people who enjoyed sky-diving , and likewise, he found that those individuals tended to exhibit riskier choices in other parts of their lives as well.  What is the implication of such studies?  I believe it suggest that we should be taking a look at signals that suggest an executive may have a high propensity to take risk or strive for the public spotlight, and we should search broadly for those signals.  However, we have to be careful.  These studies demonstrate a pattern that emerges, on average, from the data.  That does not mean every thrill-seeker will be advocating risky corporate acquisitions.

These studies do make a broader point as well about acquisitions.  They re-emphasize the fact that many CEOs do deals for reasons beyond the impact on shareholder value.   Many individuals find deal-making to be exciting and satisfying.  They derive much personal utility from such deals.   However, that "thrill-seeking" may be to the detriment of shareholders, customers, and employees.