The Irrational Quest for Charismatic CEOs is the title of a Q&A session with Rakesh Khurana, author of a new book titled Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs. Had I the time I’d like the read the book, but I barely have time to read the article, but read it I did because this topic and the article highlight one of my gripes about the business world, although I think there is hope.
I should probably note as a a disclaimer that I am very possibly biased because I wasn’t the popular kid, and I think charisma is a huge factor when it comes to mass popularity, whether in high school or the business world. Charismatic individuals are defined by their ability to attract attention and inspire confidence. Combine those characteristics with an adequate level of business acumen and you’ve got somebody that most people will look at and say “Wow, now that guy is a great leader.” The problem is he may not be the right guy for the job.
Which brings up the question of what “the job” is. If the job is to temporarily raise a public company’s stock price and please investors and analysts, then a charismatic leader can get the job done nicely. But when it comes to sustained profitability, the business equivalent of food for the human body, “the job” becomes more complicated, and charisma alone will only go so far.
My own experience in the business world is limited, but in the short years I’ve been involved I have seen time and time where companies hire CEOs who are not just incompetent, but downright dishonest, lazy, selfish, and criminal. But they’re also charismatic and tell a good story. I’ve seen successful companies put out of business by CEOs like this. And yet my feeling is that failed CEOs will go on to become CEOs somewhere else and do the same thing, when in reality they should be locked up where they can’t hurt anyone else.
Before I continue let’s talk about definitions of the word charisma. A quick Google search pulls these definitions up:
– “the ability to develop or inspire in others an ideological commitment to a particular point of view”
– “a personal attractiveness or interestingness that enables you to influence others”
– “The word charisma (from the Greek word kharisma or gift), is often used in this form to describe an ability to charm or influence people.”
Certainly inspiring others to positive action is an important factor in successful leadership, as is the ability to help other develop a commitment to an idea. Even possessing “a personal attractiveness,” good looks, eloquent manner of speech, professionalism, and good interpersonal skills can be useful for a leader. But it is when charisma becomes the prime consideration in the placement of employees on any level where charisma alone does not get “the job” done that problems arise.
As an employer I’ve fallen victim to the charisma of prospective candidate more than once, perhaps because I see those who are personable and outgoing as being easier to work with, which counts for a lot. But experience has taught me that while I can deal with personality quirks or poor interpersonal skills, in my business I can’t deal with incompetence. If an application doesn’t work the way it’s supposed to, nothing else matters.
When it comes to the CEO this should be even more important, and yet CEOs who know how to impress (if nothing else) continue to be employed by boards that should know better.
The good news is that there is opportunity and room for improvement. Recruiters, boards, and employers can find scientific ways to narrow down a pool of applicants based on observable data before charisma comes into play. I’m not going to attempt to describe what those methods might be, I’m sure there are scores of good books out there that sell a lot, get read less, and are applied almost not at all. Perhaps most important of all is for those who hire leaders to be aware of the effect of hiring based on charisma alone, and reading Khurana’s book might be a first step towards developing that awareness.
Have you worked with leaders who have used charisma for good or ill? Chirp in with your comments.
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Josh,
Be careful that you don’t confuse a bs’er as someone with charisma. Real charisma comes from someone who does have integrity, talent, caring and other parts of the leadership puzzle put together. How many people want to get in line behind a quiet, weak dud? The CEO’s you describe have no real depth. They are all show. The great leaders of our time had a talent that inspired others to stop, listen and follow. Clearly these types can tell a good story and be engaging to talk to, but they have oh so much more then the BS artist you describe. People can tell the difference – that is why a real leader is so rare and hard to find. Chances are your experiences are with people who will not be in great leadership positions in their life and the CEO’s you describe will certainly go down in history (if they go down in history at all) as lackluster CEO’s, not kids who won popularity contests.
But the issue is that people can’t tell who’s got the substance to back up their charisma and whose charisma is a shell. That is, there are a lot of people in critical positions who are choosing influential corporate leaders who can’t tell. The people I’ve personally witnessed are small fry, but what about Enron, Tyco, and Global Crossing? The execs at those companies had charisma, and yet they were horribly suited for the leadership positions they held and now we’re paying for it with Sarbanes-Oxley.
Maybe I’m opening up a can of worms by mentioning politicians, but take Clinton for example. Clinton had plenty of charisma, but will he go down in history as a great leader? 20 years from now he’ll have a Jimmy Carter-esque legacy at best.
Some people can tell the difference, to be sure, but there’s plenty of evidence that people who are plenty smart still get won over by charisma without substance, or charisma that has substance but is still mis-matched for “the job” at hand.
Time will tell who is a great leader or not. Your question, at least I thought, was talking about GREAT leadership, not mediocre or fake leadership. I want to learn about what makes histories greatest leaders great and I submit that they all had some form of real and enduring charisma. Enron, Tyco and Global Crossing are examples of poor leaders in leadership POSITIONS. History now tells us that they weren’t leaders at all, charisma or not. Clinton has fantastic charisma – people love him even though he cheated on his wife and lied about it. But is he a great leader? Maybe, people love to follow him and work hard for him and sacrifice for him. BUT – the people that really get studied years down the road as the great leaders of their time have all the charismatic qualities of Clinton, but the substance of Lincoln.
My point was more about people being put in leadership positions of great responsibility based primarily on their charisma, but perhaps I didn’t make that clear. That’s the trouble with us bloggers, we’re a bunch of non-professional writers.
Less then half of my blog posts make much sense, so don’t be too hard on yourself.
I hear what you are saying, charisma does get some people further then they deserve for sure. But it is an important leadership characteristic (one of many) in my opinion.
I get you, Josh. Your assertion that charisma shouldn’t be the prime consideration for leadership brings up an interesting question: What should the prime consideration for leadership be? I’d love to hear your thoughts.
My take: The ideal CEO is equal parts charisma, strategy, accountant, and salesman. There aren’t many people who meet this description, so if you’re going to be strong in any one category, it’s good to have the charisma to get others who fill in where you lack to join your cause. But it’s not the be all and end all of leadership.
The best CEO is the one who does the best at getting “the job” done. The trouble is that this is easy to judge in hindsight, but not so easy to predict. Certainly those who have done well with certain jobs in the past could be expected to do well with similar jobs in the future, but even here I believe there is a temptation to make jobs appear more similar than they really are. But I guess what I’m getting at is that I believe experience and a proven track record is one of the most important, if not the most important, factor.
I hesitate to say it is definitely the most important factor because I’m a firm believer in the power of humility and a natural aptitude for learning. But all the humility in the world along with a talent for learning doesn’t make up for a lack of experience.
The book The Innovator’s Solution does a good job of bringing some science into the process of picking leaders to run companies, as does Good to Great.
After reading the responses I have a few questions to pose.
If charisma (as has been alluded to) entails integrity and all the generally accepted great leadership qualities, how is it that Hitler was so charismatic?
is it not leadership if someone can get millions to follow them whether you or I agree with the moral outcomes?
Could it be that the Enron CEO was very charismatic and strategic while being an incredible accountant and salesman?
Hear me out on this because I’m not trying to bag on anybody’s thinking here, I just wonder at times why we’re so quick to tag great leaders based on the way they carry out things tactically while knowing very little about they function on a principled level.
Rockefeller is a great example of this. Was he charismatic? I don’t know, but what I do know is that he told people what he believed and what guidelines he used for making decisions and his actions followed these guidelines.
He gave a speech in 1941 about what he believes . . .
I posted his “I believe” on my site.
http://www.russpage.net/i-believe-john-d-rockefeller/
So all I need to do is add “honest” to my list of CEO characteristics, and I’m good, right?
It sounds like what we’re getting at is that skills/personality characteristics are secondary indicators of success for CEOs. If they have shown a propensity to “get the job done” (that is to say, make money without lying, cheating, etc.) then it doesn’t matter what their charisma level is.
A great example of this is the Google founders. Those dudes are severely lacking in charisma, but Larry did a great job as CEO in the early days, growing the company to 200+ employees before stepping aside.
I like it.
I actually know Larry’s brother very well. He was a client. Last year at CES he brought brother Larry by so we could meet him, but I was off talking to a man about a horse or something. D’oh’
I worked with a leader once, who had charisma and at first glance seemed very convincing. Over time it showed however, that it was all acting and that there was no solid knowledge or ability to lead, when it came to medium complex situations. So I am sure his charisma convinced the board to employ this guy, but as mentioned charisma doesn’t neccesarily do the job.