The Days Of The Superstar CEO Are Numbered
Some years ago, I claimed that good leaders are humble leaders. That post went viral and is still one of our most-read articles. At that time, I had based the claim solely on observations from anecdotal evidence gathered during our Bucket List visits—I was not aware of any empirical basis for it. It turns out there actually is. This is what science says.
In 2015, Ou, Waldman & Peterson published a scientific paper in the Journal of Management called "Do Humble CEOs Matter? An Examination of CEO Humility and Firm Outcomes."
In the paper, the researchers show a positive relationship between the degree of humility of the leader and their firm's performance, all based on empirical data collected from 105 American SMEs in the computer industry.
In fact, they show that humility is an important leadership characterstic with serious implication for a firm's strategy and performance.
That is interesting, according to the researchers, because "leadership studies over the last 100 years largely portrait effective leaders as being masculine, dominant, and aggressive—and certainly not humble."
So what is it that the researchers found, exactly?
They argue that humble CEOs differ from the "superstar leader" image often associated with CEOs in at least two meaningful ways:
First, they found that humble CEOs tend to build collaborative teams around them.
Secondly, they found that humble CEOs promote pay equality between themselves and the other team members.
Because of these two reasons, humble CEOs contribute indirectly to the fact that their firms are more likely to adopt an ambidextrous strategy, which leads to stronger firm performance as a result.
An ambidextrous strategy?
'An ambidextrous strategy,' you say? A what?
According to the researchers, a so-called ambidextrous strategy involves the"simultaneous pursuit of exploration and exploitation in a firm's strategic activities."
So, why is that important for a firm's performance?
The researches spell it out:
"Firms can reap immediate returns by exploiting their capabilities and resources, but they may be unable to adapt to change if they focus exclusively on exploitation.
In contrast, exploration prepares them for environmental change and offers the potential for future profits, although pure exploration can exhaust resources before firms can derive benefits.
Therefore, firms that can effectively manage the tension of exploration and exploitation are more likely to achieve sustainable performance [...] particularly in highly dynamic environments."
So, why do humble leaders typically lead firms that tend to work with such an unpronounceable yet successful strategy?
According to the researchers, when a humble CEO leads a firm, its leadership team is more likely to collaborate, share information, jointly make decisions, and possess a shared vision.
What is a humble leader?
You're probably wondering by now what exactly makes a leader “humble.”
Well, according to science, humble leaders possess three essential and interrelated qualities:
1. Accurate self-knowledge
Humble leaders are willing to obtain accurate self-knowledge. They are fully aware of human limitations and accept that they themselves also have unique strengths and weaknesses.
Such self-acceptance makes them willing to acknowledge their own mistakes and limitations. It also allows them to avoid egoism and put their own accomplishments and abilities in perspective.
Due to this accurate self-knowledge, humble leaders are more likely to gather and accept information from various angles and sources, even when it contradicts their own thoughts.
2. Open to self-improvement
Because of the awareness of their own limitations and weaknesses, humble leaders are motivated to learn continuously and improve themselves.
This motivation for self-improvement is rooted in an eagerness to pursue a cause greater than themselves. At the CEO level, this cause is often the main purpose and collective interests of the firm.
Humble leaders also tend to keep an open and curious mind. They are open to new information, receptive to ideas and feedback, and are willing to take contradictory advice and criticism seriously.
This degree of openness prevents humble leaders from rejecting important information and avoids overconfidence, which improves their overall decision-making.
3. Appreciative of the strengths and contributions of others
Lastly, due to their awareness of their own weaknesses and limitations, humble leaders also are more likely to appreciate the strength and contributions of others—and are also willing to offer generous praise when due.
By appreciating and recognizing the work of others, humble leaders demonstrate that they are “in it together” with the rest of the firm. They acknowledge that success is not achieved alone but by working together collaboratively.
By appreciating the efforts of others and by admitting their own limitations, humble leaders help other team members understand that their collaboration is a joint effort instead of a one-way street.
As such, humble leaders share their power with others and invite them to participate in decision-making. This helps to remove unhealthy internal competition and instead build mutual trust among all team members.
Humble leaders do all of this to create team-oriented behaviors such as collaboration, information sharing, joint decision-making, and reaching a collective goal.
Let's be honest. What is not to like about all of this? Who wouldn't be in favor of this?
There can be just one conclusion from any of this: it is time to start de-celebritizing top managers, CEOs, and other kinds of top-level leaders (aka the C-Suite, for those of you down with the current business jargon).
We have obviously said this before, but it is good to know that we are not alone. After all, science also says that the days of the superstar CEO are numbered.
And you can’t argue with science. (Well, some try to, but they always end up irrelevant.)
A last piece of advice
Let's end with one last piece of sound advice from the researchers:
"CEOs in particular might be well advised to put themselves in perspective, admit their incompleteness, and fully utilize strengths in their peers and followers—that is, to be humble."
We rest our case.