Narcissism — At A Cost?

What is the relationship between the egos of a company’s leaders and the success or profitability of the company? That is an interesting question that was examined during a study conducted by Australia’s Macquarie Graduate School of Management.

According to an article about the institution’s research, published on ChiefExecutive.net, the study discovered an interesting link between narcissism in CEOs and their company’s stock performance. In particular, the study cited language commonly used by top corporate executives during their quarterly earnings communications with stockholders.

Those conducting the research examined which pronouns were typically used, such as “I” or “me,” which would refer personally to the CEO, rather than “us” or “we,” words that would typically refer more to the entire leadership team or even the company’s entire staff.

Although the study’s scope was focused primarily on Australia, the researchers determined the stock price of companies led by the least narcissistic CEOs – those less inclined to talk in terms of “I” or “me” – performed twice as well as their peers. Similar research was conducted in America. Although the contrast was not as profound, findings also showed the more humble leaders also outperformed their peers.

In today’s media we often see top executives appearing in TV, radio and print media commercials to promote their companies, along with their respective products and services. Often these leaders become celebrities in their own right. Celebrity status, however, does not always correlate with success.

This assessment was not totally surprising. In his book, Good to Great, author Jim Collins observed the best leaders – labeled as Level 5 Leaders – were “modest and willful, humble and fearless.” He explained they “never wanted to become larger-than-life heroes. They never aspired to be put on a pedestal or become unreachable heroes. They were seemingly ordinary people producing extraordinary results.”

Genuine humility is a recurring theme we see in the Bible, a virtue it shows is all too often lacking among top leaders. Here is a sampling of what it says in the wisdom book of Proverbs:

Humility precedes honor and averts disaster. Pride – the opposite of humility – can blind us to our shortcomings. Humility allows for honest self-appraisal, and also leaves room for the counsel and assistance of others. “Pride goes before destruction, a haughty spirit before a fall” (Proverbs 16:18).“Before his downfall a man’s heart is proud, but humility comes before honor” (Proverbs 18:12).
Humility can be rewarding. Although financial results should not be our reason for being humble, humility often does come with rewards. “The reward of humility and the fear of the LORD are riches, honor and life” (Proverbs 22:4).
Humility can lead to recognition. Attempts to bring attention to oneself can backfire, leading to disgrace rather than commendation. “Do not exalt yourself in the king’s presence, and do not claim a place among great men; it is better for him to say to you, ‘Come up here,’ than for him to humiliate you before a nobleman” (Proverbs 25:6-7).