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Unknown Facts About Leadership Revealed

Jul 24, 2008
Imagine a bed of oysters, carpeting the bottom of the clear blue ocean, waiting for some adventurous diver to scythe through the dappled waters and bring to the surface the secret pearls trapped inside.

OK it's a bit fanciful, I admit, but in this article I'll be highlighting a pearl of wisdom from the ivory towers of the academic world.

Now before you get too hung up on the concept of pearls of wisdom from ivory towers, ask the question: is academic research of any value at all?

My answer is, of course, yes. But as a business school professor teaching at business schools around the world, I would say that wouldn't I?

Now the academic papers that are the most valuable are those that challenge our thinking. The ones that are sufficiently unexpected to make us think 'THAT'S interesting!'

For now, I want to concentrate on something that's interested me for a long time: the search for the charismatic CEO, and whether or not charismatic CEOs have any effect on business performance. Some researchers think they do - but some say they don't.

So I looked back at my February 2006 edition of the Journal of the American Academy of Management, known as AMJ, with interest. 'Does CEO charisma matter?' it asked in large friendly letters on the cover.

Summarizing brutally, it appears that in times of uncertainty or crisis, charismatic CEOs appear to give some stability and a sense of direction to companies... But not always.

And this I think is what makes academic research so interesting. It challenges the commonsense view of the world. We assume that larger-than-life characters who run our businesses make a real difference. But actually when we come to look for that evidence it isn't there.

I'll say it again: There's no link between the charisma of a CEO and business performance. This becomes important to us as practising managers if we choose to promote or select senior executives for roles just because they are charismatic. There's no guarantee that the charismatic leader will deliver great performance.

You might be thinking: so what? Well, first of all, this is highly reassuring to those of us whose egos are not John Wayne-sized. And secondly, those of us who are involved in recruiting managers and leaders must not be seduced by charismatic individuals. We must assess every candidate for every role based on past performance and their plans for the future. Charisma does not guarantee performance. Caveat emptor. Buyer beware.

So next time you hear an angry report in a tabloid newspaper blasting away at the vast sums of money spent on academic research, think again before you say 'That's obvious', or 'That's ridiculous'. Behind the headlines there might just be a pearl in a shell.
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