Greed is good, right? A greedy person works harder and the invisible hand produces benefits for the rest of society, right?
Well, no… at least according business school researchers at the University of Maryland and the University of North Carolina.
In “Narcissism Is a Bad Sign: CEO Signature Size, Investment, And Performance,” the authors find that excessively self-interested CEO’s deliver lower growth and lower ROI, despite the fact that, on average, they are paid more for this lower performance.
I was initially skeptical of this research, because it seemed to have a flawed methodology, measuring the size of CEO signatures as a proxy for narcissistic tendencies. But after I downloaded and read the paper, the approach seems to have scientific validity, controlling for name size and other factors.
Self-aggrandizing CEO’s not only antagonize their own co-workers, they also misjudge their own abilities, make bad mistakes, and are less likely to learn from them.
A narcissist has a difficult time feeling empathy for others, and distorts facts to suit their own purposes. If you are wondering if someone you know has Narcissistic Personality Disorder (NPD), you might look at the “5 Early Warning Signs You’re With a Narcissist.”
Why do boards hire narcissists in the first place? One answer may be that we are all prone to being taken in by a huckster, someone so cocksure that our own hesitation is overcome by the egoist’s chutzpah. In short, we believe that self-confidence is an important attribute needed in the job, and we want to believe that the huckster’s self-confidence is well-placed.
Self-deception, in other words, is the root of the problem.
[Thanks to Phyllis Korkki at the NYTimes for highlighting this story.]