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.