Time to break the myth of the charismatic leader

Daniel Korschun, Associate Professor at Drexel University & co-author, We Are Market Basket

Time to break the myth of the charismatic leader

The most famous chief executives are often quite charismatic and even a bit flamboyant. Richard Branson, Steve Jobs, Mark Cuban, and Donald Trump. But does a charismatic leader make for a well-functioning company?

Recent evidence points to a pretty weak relationship between charisma and performance. One study suggests that these CEOs can be too overconfident to listen to needed feedback. Part of the reason is that the most charismatic leaders can be narcissistic, focusing on their own success rather than that of the company and the people it serves. 

Rather than always looking to drive their own success, the most effective leaders often do two things that aren’t intuitively associated with strong leaders.

First, they spread decision making power across teams and the organization. One study compared teams where there was a single leader at the center of all decision-making to teams where decision-making was distributed across members of the team. They found that teams with more distributed decision-making functioned better and produced team members who supported each other more. Empowering subordinates to make decisions on their own also makes for a faster moving, nimbler organization. But it requires a CEO who is willing to enable others rather than insist on enacting all change his or herself. 

Just as important, effective leaders concentrate on how the company can serve others. Companies can create tremendous value for customers, employees, suppliers, the community and other constituents. But CEOs need to be committed to creating that value. According to another recent study prideful, narcissistic CEOs are simply less likely to lead corporate social responsibility (CSR) efforts like charitable giving, environmental programs, and volunteering. And even when they do engage in CSR efforts, those initiatives don’t drive performance if they are done to feed CEO narcissism.

Those CEOs are doing a disservice to their companies by ignoring the needs of the people they serve. Not only is service to the community ethically just. If done well it can drive revenues and cut costs by satisfying customers and motivating employees. The best leaders view the company as a system of creating value for multiple constituents. 

To be fair, there are conditions in which charisma can rally the troops. During a corporate crisis, charismatic leaders can sometimes show a way forward through sheer force of will. Similarly, in times of uncertainty such as a corporate turnaround or restructuring, a charismatic leader may be needed to provide a compelling vision of what the company can one day become. 

But rarely does charisma have the staying power to sustain a company. Charismatic leaders may get attention in spurts, but leaders who are humble and find ways to serve others are best positioned to be successful in the longer term.


About the Author

Daniel Korschun is Associate Professor at Drexel University and the co-author of We Are Market Basket, which tells the true story of two million New Englanders who took to the streets to reinstate their beloved CEO. For more information, please visit dek468.wix.com/wearemarketbasket