Are narcissistic CEOs any more capable than humble ones? And are calls for more humility justified?
These questions contemplated by Oleg Petrenko, an assistant professor of management at the Jerry S. Rawls College of Business, have fueled years of research by him and his colleagues into the positive and negative personality traits of corporate leaders.
"Our research is important because the people we study have a tremendous impact on the well-being of our society," Petrenko said. "They are leading the firms that create jobs and that drive our economy. Unless we really understand how their personalities affect their firms, we cannot really understand how to help those people make better decisions, and how to help us make better decisions about them."
The findings of some of his work are summarized in a paper recently accepted for publication by the leading academic journal for strategic management, Strategic Management Journal. The paper, entitled "The Case for Humble Expectations: CEO Humility and Market Performance," examines humble CEOs and how their humility affects their companies' bottom lines.
Petrenko and Federico Aime, a professor of management at Oklahoma State University, originally investigated whether CEO humility impacts performance. They found it has nothing to do with ability; humble leaders are just as effective as those who lack humility.
"The problem is that sometimes humble leaders are perceived as weaker, which is a wrong perception," Petrenko said. "That perception is very important in the market, because companies get evaluated by external analysts and by the media, and the CEO is the biggest figurehead of a company."
Their next challenge was to discover what effect on performance, if any, CEO humility has. They believed it was important to know because there had been considerable discussion in the media about how CEOs should be humbler, but little evidence as to why they should be and what the effect is.
To study CEO humility, Petrenko, who is first author on the paper, and Aime collaborated with two other researchers: OSU doctoral student Tessa Recendes and Texas Tech doctoral student Jeff Chandler. They analyzed media reports and studied publicly available videos of 185 CEOs of S&P 500 companies to examine the leaders' behaviors, including speech and mannerisms. Petrenko's team ultimately found that because expectations of humble CEOs are artificially low, their companies tend to exceed market expectations, thus positioning the leader for success.
An earlier draft of the team's paper won the Best Interdisciplinary Paper Award from the Strategic Management Society at its fall 2017 annual conference. Their work is part of their larger academic mission to study the personalities of corporate leaders.
"So it's a small piece of the puzzle of how the personalities of CEOs ultimately affect their organizations," Petrenko said.
In studying the personality trait of humility, they examined the "light side" of personality, building on their earlier research into narcissism, or the "dark side" of personality. Though humility is not an exact opposite of narcissism, the two traits are inversely correlated, Petrenko said.
"Narcissism is very prevalent among CEOs because narcissistic individuals tend to be drawn to very powerful positions," he said. "But we also wanted to look at the other side of it because not every CEO is narcissistic; there are a lot of humble CEOs."
Their research on CEO narcissism examined its effects on corporate social responsibility practices and was summarized in their article, "Corporate Social Responsibility or CEO Narcissism? CSR Motivations and Organizational Performance." The paper was published in 2016, also in Strategic Management Journal, and has since received enough citations to place it in the top 1% of papers in the academic field of economics and business for that publication year, according to data from Essential Science Indicators.
Research by Petrenko and his colleagues has gained widespread attention for many reasons, including the fact that many company decisions are based on a CEO's values and personality traits.
"For a long time, the academic community ignored the personal aspects of those individuals, but how perception of CEOs affects companies needs to be understood," Petrenko said. "There are certain aspects of personality that are negative to firms, and those companies need to understand how to control those things and amplify the positives."
One key takeaway of Petrenko's research for CEOs is that they should not only express enough confidence to be viewed as capable, but it would also behoove them to show some humility, Petrenko said, noting, "You want to manage your own humility because if you have too much humility, you'll start to be perceived as weak. But a little humility can help you manage the expectations and set yourself up for exceeding them."