(Paraphrased and Summarized from articles from Stanford and Forbes)
There are individuals whom corporate boards tend to select as CEOs, especially in times of upheaval, when the status quo is failing. These individuals are adept at self-promotion and shine in job interviews. Then, once they’re in power, we find out who they really are.
Sometimes they’re as good as their promise. But many turn out to be not just confident but arrogant and entitled. They lack empathy and exploit others without compunction.
The distinction is what motivates them. Do they really want to make the company better, or is it really all about their own aggrandizement?
Entitled self -serving CEOs can change the companies they lead, but too often in negative ways. Divergent voices are silenced, flattery and servility are rewarded, and cynicism and apathy corrode any sense of shared purpose in a culture where everyone’s out for themselves.
When you alienate your best people, you risk losing them to competition. The costs of bad leadership do not end there, your team’s loyalty and commitment will be out the door before they physically leave, resulting in diminished engagement and productivity.
A CEO who develops a reputation for having a bad relationship with his employees will have trouble attracting and retaining top talent - the greatest cost of a bad boss. A company’s reputation as a good (or bad) place to work is impossible to put a price on.
Humility, not ego, is most effective in inspiring teamwork and high performance.
Not surprisingly, studies also show that egotistical belief in their superiority is based on scant evidence, validated neither by objective measures of intelligence or competence nor by performance reviews from peers or subordinates. One recent paper on corporate decision-making found that grandiosity in leaders was associated with greater risk-taking but not better financial returns.
But the gravest danger posed by such leaders is that their toxic influence guides the behavior and expectations of others — and ultimately shapes the culture of the organization. Studies of businesses show that self-serving behavior at the top cascades through the organization and becomes legitimized and normalized. So you end up with these cultures with no teamwork and low integrity.
Too often, when boards select outside CEOs, they do it through interviews. But interviews play to the strength of an egotistical leader. You can’t just look at performance, because they can fake performance— blithely taking credit for others’ work and even falsifying results.
What would really be far more illuminating would be to go talk to the people who’ve worked for them and with them in the past. You have to get data from the people who have seen that person operating. But that typically isn’t what happens.