Master and Puppets: How Narcissistic CEOs Build their Professional Worlds

In this second of a two-part article, Arijit Chatterjee, Professor of Management at ESSEC Business School, explains how narcissistic CEOs* satisfy their need to dominate and impact top management teams.

*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.

I’m the boss and I decide

Because narcissistic CEOs believe their knowledge and experience are superior to others, it follows that their decisions should lead to the best outcomes. As such, they need to dominate decision-making in the organization. Character traits that might also seem negative to many of us also hold them in good stead when it comes to a decision – a lower need for intimacy, a lack of empathy and lower levels of gratitude for their co-workers make it easier for them to be comfortable exploiting and dominating others. This does not mean that narcissists are always abusive and domineering. Indeed, narcissists can also use charm and self-presentation techniques as a means of influence which others may find initially enjoyable.

Studies have shown that narcissistic CEOs tend to put into place several strategies to ensure that they retain control of decisions in the firm. Whereas the benefits of globally high-status directors outweigh the costs, high-status top team members create problems for them – they tend to speak up and speak out – hence the first strategy of placing a loyal cadre of lieutenants around them to protect and defend, as well as facilitate the implementation of their directives. This is easier in smaller firms than larger firms where the structural complexity of the organization and the sheer numbers of employees makes it impossible to exercise direct control. A loyal team thus becomes even more critical in this environment, since narcissistic CEOs are more likely to use them to seal themselves off from lower-level employees who they have little interest in interacting with.

They are also more likely to promote younger, more inexperienced people to key positions, not because the latter are less capable, but because – lacking in extensive networks, more receptive to strategic change, and prone to creating enemies among their non-chosen peers – they will provide loyalty born from both gratitude and obligation. After all, their future careers will depend on the narcissistic CEO’s continuing dominance within the firm. Former research cites Steve Jobs as an example. Starting with his co-founder Steve Wozniak, Jobs became well-known for identifying talented individuals and pushing them to achieve great things, but also for turning his back on them and replacing them without hesitation when their behavior displeased him.

And finally, because of a preference for subordinates who admire – or fear – them and who can show tolerance for the CEO’s less savory behaviors, narcissistic CEOs will tend to surround themselves with malleable directors and executives, lower in esteem and ready to allow the CEO to take all the credit for positive outcomes. Importantly, they will also personally identify with the narcissistic CEO rather than the organization.

Mirror, mirror. Echo, echo

To return full-circle, it is also odd that subordinates in a firm may end up gazing into the mirror. Not to see themselves, but the image of their narcissistic CEO so carefully crafted by the maker himself. This identification is born from a mix of reward, punishment, the CEO’s heroic media image and the subordinates’ psychological discomfort at having to admit to themselves that they kowtow to the boss. It leads employees to develop rationalized myths about their leaders. But while they admire the CEO’s actions, vision, capabilities and rebelliousness, they ultimately end up using the myth as an “excuse” to forgive their boss’s negative eccentricities such as fits of anger, lack of empathy, humiliation or punishment, as a side effect of genius. In the book Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future, the author Ashlee Vance states: “Numerous people…decried the work hours, Musk’s blunt style and his sometimes ludicrous expectations. Yet almost every person – even those who had been fired – still worshipped Musk and talked about him in terms usually reserved for superheroes or deities.” The authors argue that the self is, in part, a social construct and “personality assessment must be grounded in context instead of looking for general features.”

Narcissus: getting to the root of it

So what can be done? And is narcissism necessarily negative? Indeed, some traits might be seen as virtues in many leadership situations. While recognizing this, Chatterjee and Pollock point to the fact that more than a decade after Sarbanes Oxley, ties between independent directors and CEOs continue to hamper corporate governance and board effectiveness, with CEO-director relationships becoming entangled in a quid pro quo that ultimately defeats the purpose of corporate governance reforms. ‘Tighter regulations may not be effective in reigning in their excesses,’ they assert. ‘If boards know their CEOs better, and CEOs are aware of their own tendencies, they might be able to make better recruitment decisions and structure the CEO’s professional world more effectively.’