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Narcissistic Leaders

The Incredible Pros, the Inevitable Cons

by Michael Maccoby

Many leaders dominating

business today have what

psychoanalysts call a

narcissistic personality.

That’s good news for

companies that need passion

and daring to break new

ground. But even productive

narcissists can be dangerous

for organizations. Here is

some advice on avoiding the

dangers.

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Narcissistic Leaders

The Incredible Pros, the Inevitable Cons

by Michael Maccoby

harvard business review • january 2004 page 1

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Many leaders dominating business today have what psychoanalysts

call a narcissistic personality. That’s good news for companies that

need passion and daring to break new ground. But even productive

narcissists can be dangerous for organizations. Here is some advice on

avoiding the dangers.

When Michael Maccoby wrote this article, which was first published in early 2000, the business world was still under the spell of the Internet and its revolu- tionary promise. It was a time, Maccoby wrote, that called for larger-than-life leaders who could see the big picture and paint a compelling portrait of a dra- matically different future. And that, he argued, was one reason we saw the emergence of the superstar CEOs—the grandiose, actively self-promoting, and genuinely narcissistic leaders who dominated the covers of business magazines at that time. Skilled or- ators and creative strategists, narcissists have vision and a great ability to attract and inspire followers.

The times have changed, and we’ve learned a lot about the dangers of overreliance on big personali- ties, but that doesn’t mean narcissism can’t be a use- ful leadership trait. There’s certainly a dark side to narcissism—narcissists, Freud told us, are emotion- ally isolated and highly distrustful. They’re usually poor listeners and lack empathy. Perceived threats can trigger rage. The challenge today—as Maccoby understood it to be four years ago—is to take advan- tage of their strengths while tempering their weak- nesses.

There’s something new and daring about the CEOs who are transforming today’s industries. Just compare them with the executives who ran large companies in the 1950s through the 1980s. Those executives shunned the press and had their comments carefully crafted by cor- porate PR departments. But today’s CEOs— superstars such as Bill Gates, Andy Grove, Steve Jobs, Jeff Bezos, and Jack Welch—hire their own publicists, write books, grant spon- taneous interviews, and actively promote their personal philosophies. Their faces adorn the covers of magazines like

BusinessWeek

Time

, and the

Economist

. What’s more, the world’s business personalities are increasingly seen as the makers and shapers of our public and personal agendas. They advise schools on what kids should learn and lawmakers on how to invest the public’s money. We look to them for thoughts on everything from the future of e-commerce to hot places to vacation.

There are many reasons today’s business leaders have higher profiles than ever before. One is that business plays a much bigger role

This document is authorized for use only by Tylecia Westbrook in WMBA-6000-3/MMSL-6000-3/MGMT-6000-3/WMBA-6000B-3-Dynamic Leadership2021 Spring Sem 01/11-05/02-PT2 at Laureate Education - Walden University, 2021.

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Michael Maccoby

is an anthropologist and a psychoanalyst. He is also the founder and president of the Maccoby Group, a management consultancy in Washington, DC, and was formerly di- rector of the Program on Technology, Public Policy, and Human Develop- ment at Harvard University’s Kennedy School of Government in Cambridge, Massachusetts. This article was the basis for the book

The Productive Nar- cissist: The Promise and Peril of Vision- ary Leadership

(Broadway Books, 2003).

in our lives than it used to, and its leaders are more often in the limelight. Another is that the business world is experiencing enormous changes that call for visionary and charismatic leadership. But my 25 years of consulting both as a psychoanalyst in private practice and as an adviser to top managers suggest a third rea- son—namely, a pronounced change in the per- sonality of the strategic leaders at the top. As an anthropologist, I try to understand people in the context in which they operate, and as a psychoanalyst, I tend to see them through a distinctly Freudian lens. Given what I know, I believe that the larger-than-life leaders we are seeing today closely resemble the personality type that Sigmund Freud dubbed narcissistic. “People of this type impress others as being ‘personalities,’” he wrote, describing one of the psychological types that clearly fall within the range of normality. “They are especially suited to act as a support for others, to take on the role of leaders, and to give a fresh stimulus to cultural development or damage the estab- lished state of affairs.”

Throughout history, narcissists have always emerged to inspire people and to shape the fu- ture. When military, religious, and political arenas dominated society, it was figures such as Napoléon Bonaparte, Mahatma Gandhi, and Franklin Delano Roosevelt who deter- mined the social agenda. But from time to time, when business became the engine of so- cial change, it, too, generated its share of nar- cissistic leaders. That was true at the beginning of this century, when men like Andrew Carn- egie, John D. Rockefeller, Thomas Edison, and Henry Ford exploited new technologies and re- structured American industry. And I think it is true again today.

But Freud recognized that there is a dark side to narcissism. Narcissists, he pointed out, are emotionally isolated and highly distrustful. Perceived threats can trigger rage. Achieve- ments can feed feelings of grandiosity. That’s why Freud thought narcissists were the hard- est personality types to analyze. Consider how an executive at Oracle describes his narcissistic CEO Larry Ellison: “The difference between God and Larry is that God does not believe he is Larry.” That observation is amusing, but it is also troubling. Not surprisingly, most people think of narcissists in a primarily negative way. After all, Freud named the type after the mythical figure Narcissus, who died because of

his pathological preoccupation with himself. Yet narcissism can be extraordinarily use-

ful—even necessary. Freud shifted his views about narcissism over time and recognized that we are all somewhat narcissistic. More re- cently, psychoanalyst Heinz Kohut built on Freud’s theories and developed methods of treating narcissists. Of course, only profes- sional clinicians are trained to tell if narcissism is normal or pathological. In this article, I dis- cuss the differences between productive and unproductive narcissism but do not explore the extreme pathology of borderline condi- tions and psychosis.

Leaders such as Jack Welch and George Soros are examples of productive narcissists. They are gifted and creative strategists who see the big picture and find meaning in the risky challenge of changing the world and leav- ing behind a legacy. Indeed, one reason we look to productive narcissists in times of great transition is that they have the audacity to push through the massive transformations that society periodically undertakes. Produc- tive narcissists are not only risk takers willing to get the job done but also charmers who can convert the masses with their rhetoric. The danger is that narcissism can turn unproduc- tive when, lacking self-knowledge and restrain- ing anchors, narcissists become unrealistic dreamers. They nurture grand schemes and harbor the illusion that only circumstances or enemies block their success. This tendency to- ward grandiosity and distrust is the Achilles’ heel of narcissists. Because of it, even brilliant narcissists can come under suspicion for self-in- volvement, unpredictability, and—in extreme cases—paranoia.

It’s easy to see why narcissistic leadership doesn’t always mean successful leadership. Consider the case of Volvo’s Pehr Gyllenham- mar. He had a dream that appealed to a broad international audience—a plan to revolution- ize the industrial workplace by replacing the dehumanizing assembly line caricatured in Charlie Chaplin’s

Modern Times

. His wildly popular vision called for team-based crafts- manship. Model factories were built and publi- cized to international acclaim. But his success in pushing through these dramatic changes also sowed the seeds for his downfall. Gyllen- hammar started to feel that he could ignore the concerns of his operational managers. He pursued chancy and expensive business deals,

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which he publicized on television and in the press. On one level, you can ascribe Gyllen- hammar’s falling out of touch with his work- force simply to faulty strategy. But it is also possible to attribute it to his narcissistic per- sonality. His overestimation of himself led him to believe that others would want him to be the czar of a multinational enterprise. In turn, these fantasies led him to pursue a merger with Renault, which was tremendously unpop- ular with Swedish employees. Because Gyllen- hammar was deaf to complaints about Renault, Swedish managers were forced to take their case public. In the end, shareholders aggressively rejected Gyllenhammar’s plan, leaving him with no option but to resign.

Given the large number of narcissists at the helm of corporations today, the challenge fac- ing organizations is to ensure that such leaders do not self-destruct or lead the company to di- saster. That can take some doing because it is very hard for narcissists to work through their issues—and virtually impossible for them to do it alone. Narcissists need colleagues and even therapists if they hope to break free from their limitations. But because of their extreme inde- pendence and self-protectiveness, it is very dif- ficult to get near them. Kohut maintained that a therapist would have to demonstrate an ex- traordinarily profound empathic understand- ing and sympathy for the narcissist’s feelings in order to gain his trust. On top of that, narcis- sists must recognize that they can benefit from such help. For their part, employees must learn how to recognize—and work around— narcissistic bosses. To help them in this en- deavor, let’s first take a closer look at Freud’s theory of personality types.

Three Main Personality Types

While Freud recognized that there are an al- most infinite variety of personalities, he iden- tified three main types: erotic, obsessive, and narcissistic. Most of us have elements of all three. We are all, for example, somewhat nar- cissistic. If that were not so, we would not be able to survive or assert our needs. The point is, one of the dynamic tendencies usually dom- inates the others, making each of us react dif- ferently to success and failure.

Freud’s definitions of personality types dif- fered over time. When talking about the erotic personality type, however, Freud generally did not mean a sexual personality but rather one

for whom loving and above all being loved is most important. This type of individual is de- pendent on those people they fear will stop loving them. Many erotics are teachers, nurses, and social workers. At their most productive, they are developers of the young as well as en- ablers and helpers at work. As managers, they are caring and supportive, but they avoid con- flict and make people dependent on them. They are, according to Freud, outer-directed people.

Obsessives, in contrast, are inner-directed. They are self-reliant and conscientious. They create and maintain order and make the most effective operational managers. They look con- stantly for ways to help people listen better, re- solve conflict, and find win-win opportunities. They buy self-improvement books such as Stephen Covey’s

The 7 Habits of Highly Effective People

. Obsessives are also ruled by a strict con- science—they like to focus on continuous im- provement at work because it fits in with their sense of moral improvement. As entrepre- neurs, obsessives start businesses that express their values, but they lack the vision, daring, and charisma it takes to turn a good idea into a great one. The best obsessives set high stan- dards and communicate very effectively. They make sure that instructions are followed and costs are kept within budget. The most produc- tive are great mentors and team players. The unproductive and the uncooperative become narrow experts and rule-bound bureaucrats.

Narcissists, the third type, are independent and not easily impressed. They are innovators, driven in business to gain power and glory. Productive narcissists are experts in their in- dustries, but they go beyond it. They also pose the critical questions. They want to learn ev- erything about everything that affects the company and its products. Unlike erotics, they want to be admired, not loved. And unlike ob- sessives, they are not troubled by a punishing superego, so they are able to aggressively pur- sue their goals. Of all the personality types, narcissists run the greatest risk of isolating themselves at the moment of success. And be- cause of their independence and aggressive- ness, they are constantly looking out for ene- mies, sometimes degenerating into paranoia when they are under extreme stress. (For more on personality types, see the sidebar “Fromm’s Fourth Personality Type.”)

Productive narcissists

have the audacity to

push through the

massive transformations

that society periodically

undertakes.

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Strengths of the Narcissistic Leader

When it comes to leadership, personality type can be instructive. Erotic personalities gener- ally make poor managers—they need too much approval. Obsessives make better lead- ers—they are your operational managers: crit- ical and cautious. But it is narcissists who come closest to our collective image of great leaders. There are two reasons for this: they have compelling, even gripping, visions for companies, and they have an ability to attract followers.

Great Vision.

I once asked a group of managers to define a leader. “A person with vision” was a typical response. Productive narcissists understand the vision thing par- ticularly well, because they are by nature people who see the big picture. They are not analyzers who can break up big questions into manageable problems; they aren’t number crunchers either (these are usually the obsessives). Nor do they try to extrapo- late to understand the future—they attempt to create it. To paraphrase George Bernard Shaw, some people see things, and they say “why?”; narcissists dream things that never were and say, “Why not?”

Consider the difference between Bob Allen, a productive obsessive, and Mike Armstrong, a productive narcissist. In 1997, Allen tried to ex- pand AT&T to reestablish the end-to-end ser-

vice of the Bell System by reselling local ser- vice from the regional Bell operating companies (RBOCs). Although this was a worthwhile endeavor for shareholders and cus- tomers, it was hardly earth-shattering. By con- trast, through a strategy of combining voice, telecommunications, and Internet access by high-speed broadband telecommunication over cable, Mike Armstrong has “created a new space with his name on it,” as one of his colleagues puts it. Armstrong is betting that his costly strategy will beat out the RBOC’s less ex- pensive solution of digital subscriber lines over copper wire. This example illustrates the dif- ferent approaches of obsessives and narcissists. The risk Armstrong took is one that few obses- sives would feel comfortable taking. His vision is galvanizing AT&T. Who but a narcissistic leader could achieve such a thing? As Napoléon—a classic narcissist—once re- marked, “Revolutions are ideal times for sol- diers with a lot of wit—and the courage to act.”

As in the days of the French Revolution, the world is now changing in astounding ways; narcissists have opportunities they would never have in ordinary times. In short, today’s narcissistic leaders have the chance to change the very rules of the game. Consider Robert B. Shapiro, CEO of Monsanto. Shapiro described his vision of genetically modifying crops as “the single most successful introduction of technology in the history of agriculture, in- cluding the plow” (

New York Times

, August 5, 1999). This is certainly a huge claim—there are still many questions about the safety and pub- lic acceptance of genetically engineered fruits and vegetables. But industries like agriculture are desperate for radical change. If Shapiro’s gamble is successful, the industry will be trans- formed in the image of Monsanto. That’s why he can get away with painting a picture of Monsanto as a highly profitable “life sciences” company—despite the fact that Monsanto’s stock has fallen 12% from 1998 to the end of the third quarter of 1999. (During the same pe- riod, the S&P was up 41%.) Unlike Armstrong and Shapiro, it was enough for Bob Allen to win against his competitors in a game mea- sured primarily by the stock market. But nar- cissistic leaders are after something more. They want—and need—to leave behind a leg- acy.

Scores of Followers.

Narcissists have vi-

Fromm’s Fourth Personality Type

Not long after Freud described his three personality types in 1931, psychoanalyst Erich Fromm proposed a fourth person- ality type, which has become particu- larly prevalent in today’s service econ- omy. Fromm called this type the “marketing personality,” and it is exem- plified by the lead character in Woody Allen’s movie

Zelig

, a man so governed by his need to be valued that he be- comes exactly like the people he hap- pens to be around.

Marketing personalities are more de- tached than erotics and so are less likely to cement close ties. They are also less driven by conscience than obsessives. Instead, they are motivated by a radar- like anxiety that permeates everything they do. Because they are so eager to

please and to alleviate this anxiety, mar- keting personalities excel at selling themselves to others.

Unproductive marketing types lack di- rection and the ability to commit them- selves to people or projects. But when productive, marketing types are good at facilitating teams and keeping the focus on adding value as defined by customers and colleagues. Like obsessives, market- ing personalities are avid consumers of self-help books. Like narcissists, they are not wedded to the past. But marketing types generally make poor leaders in times of crisis. They lack the daring needed to innovate and are too respon- sive to current, rather than future, cus- tomer demands.

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sion—but that’s not enough. People in mental hospitals also have visions. The simplest defi- nition of a leader is someone whom other peo- ple follow. Indeed, narcissists are especially gifted in attracting followers, and more often than not, they do so through language. Narcis- sists believe that words can move mountains and that inspiring speeches can change peo- ple. Narcissistic leaders are often skillful ora- tors, and this is one of the talents that makes them so charismatic. Indeed, anyone who has seen narcissists perform can attest to their per- sonal magnetism and their ability to stir en- thusiasm among audiences.

Yet this charismatic gift is more of a two- way affair than most people think. Although it is not always obvious, narcissistic leaders are quite dependent on their followers—they need affirmation, and preferably adulation. Think of Winston Churchill’s wartime broadcasts or J.F.K.’s “Ask not what your country can do for you” inaugural address. The adulation that fol- lows from such speeches bolsters the self-confi- dence and conviction of the speakers. But if no one responds, the narcissist usually becomes insecure, overly shrill, and insistent—just as Ross Perot did.

Even when people respond positively to a narcissist, there are dangers. That’s because charisma is a double-edged sword—it fosters both closeness and isolation. As he becomes in- creasingly self-assured, the narcissist becomes more spontaneous. He feels free of constraints. Ideas flow. He thinks he’s invincible. This en- ergy and confidence further inspire his follow- ers. But the very adulation that the narcissist demands can have a corrosive effect. As he ex- pands, he listens even less to words of caution and advice. After all, he has been right before, when others had their doubts. Rather than try to persuade those who disagree with him, he feels justified in ignoring them—creating fur- ther isolation. The result is sometimes flagrant risk taking that can lead to catastrophe. In the political realm, there is no clearer example of this than Bill Clinton.

Weaknesses of the Narcissistic Leader

Despite the warm feelings their charisma can evoke, narcissists are typically not comfort- able with their own emotions. They listen only for the kind of information they seek. They don’t learn easily from others. They don’t like

to teach but prefer to indoctrinate and make speeches. They dominate meetings with sub- ordinates. The result for the organization is greater internal competitiveness at a time when everyone is already under as much pres- sure as they can possibly stand. Perhaps the main problem is that the narcissist’s faults tend to become even more pronounced as he becomes more successful.

Sensitive to Criticism.

Because they are ex- traordinarily sensitive, narcissistic leaders shun emotions as a whole. Indeed, perhaps one of the greatest paradoxes in this age of teamwork and partnering is that the best cor- porate leader in the contemporary world is the type of person who is emotionally iso- lated. Narcissistic leaders typically keep oth- ers at arm’s length. They can put up a wall of defense as thick as the Pentagon. And given their difficulty with knowing or acknowledg- ing their own feelings, they are uncomfortable with other people expressing theirs—espe- cially their negative feelings.

Indeed, even productive narcissists are ex- tremely sensitive to criticism or slights, which feel to them like knives threatening their self- image and their confidence in their visions. Narcissists are almost unimaginably thin- skinned. Like the fairy-tale princess who slept on many mattresses and yet knew she was sleeping on a pea, narcissists—even powerful CEOs—bruise easily. This is one explanation why narcissistic leaders do not want to know what people think of them unless it is causing them a real problem. They cannot tolerate dis- sent. In fact, they can be extremely abrasive with employees who doubt them or with sub- ordinates who are tough enough to fight back. Steve Jobs, for example, publicly humiliates subordinates. Thus, although narcissistic lead- ers often say that they want teamwork, what that means in practice is that they want a group of yes-men. As the more independent- minded players leave or are pushed out, suc- cession becomes a particular problem.

Poor Listeners.

One serious consequence of this oversensitivity to criticism is that nar- cissistic leaders often do not listen when they feel threatened or attacked. Consider the re- sponse of one narcissistic CEO I had worked with for three years who asked me to inter- view his immediate team and report back to him on what they were thinking. He invited me to his summer home to discuss what I had

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found. “So what do they think of me?” he asked with seeming nonchalance. “They think you are very creative and courageous,” I told him, “but they also feel that you don’t listen.” “Excuse me, what did you say?” he shot back at once, pretending not to hear. His response was humorous, but it was also tragic.

In a very real way, this CEO could not hear my criticism because it was too painful to tol- erate. Some narcissists are so defensive that they go so far as to make a virtue of the fact that they don’t listen. As another CEO bluntly put it, “I didn’t get here by listening to peo- ple!” Indeed, on one occasion when this CEO proposed a daring strategy, none of his subor- dinates believed it would work. His subsequent success strengthened his conviction that he had nothing to learn about strategy from his lieutenants. But success is no excuse for narcis- sistic leaders not to listen.

Lack of Empathy.

Best-selling business writers today have taken up the slogan of “emotional competencies”—the belief that successful leadership requires a strongly de- veloped sense of empathy. But although they crave empathy from others, productive narcis- sists are not noted for being particularly em- pathetic themselves. Indeed, lack of empathy is a characteristic shortcoming of some of the most charismatic and successful narcissists, in- cluding Bill Gates and Andy Grove. Of course, leaders do need to communicate persuasively. But a lack of empathy did not prevent some of history’s greatest narcissistic leaders from knowing how to communicate—and inspire. Neither Churchill, de Gaulle, Stalin, nor Mao Tse-tung were empathetic. And yet they in- spired people because of their passion and their conviction at a time when people longed for certainty.

In fact, in times of radical change, lack of empathy can actually be a strength. A narcis- sist finds it easier than other personality types to buy and sell companies, to close and move facilities, and to lay off employees—decisions that inevitably make many people angry and sad. But narcissistic leaders typically have few regrets. As one CEO says, “If I listened to my employees’ needs and demands, they would eat me alive.”

Given this lack of empathy, it’s hardly sur- prising that narcissistic leaders don’t score par- ticularly well on evaluations of their interper- sonal style. What’s more, neither 360-degree

evaluations of their management style nor workshops in listening will make them more empathic. Narcissists don’t want to change— and as long as they are successful, they don’t think they have to. They may see the need for operational managers to get touchy-feely training, but that’s not for them.

There is a kind of emotional intelligence as- sociated with narcissists, but it’s more street smarts than empathy. Narcissistic leaders are acutely aware of whether or not people are with them wholeheartedly. They know whom they can use. They can be brutally exploitative. That’s why, even though narcissists undoubt- edly have “star quality,” they are often unlik- able. They easily stir up people against them, and it is only in tumultuous times, when their gifts are desperately needed, that people are willing to tolerate narcissists as leaders.

Distaste for Mentoring.

Lack of empathy and extreme independence make it difficult for narcissists to mentor and be mentored. Generally speaking, narcissistic leaders set very little store by mentoring. They seldom mentor others, and when they do they typi- cally want their protégés to be pale reflections of themselves. Even those narcissists like Jack Welch who are held up as strong mentors are usually more interested in instructing than in coaching.

Narcissists certainly don’t credit mentoring or educational programs for their own devel- opment as leaders. A few narcissistic leaders such as Bill Gates may find a friend or consult- ant—for instance, Warren Buffet, a superpro- ductive obsessive—whom they can trust to be their guide and confidant. But most narcissists prefer “mentors” they can control. A 32-year- old marketing vice president, a narcissist with CEO potential, told me that she had rejected her boss as a mentor. As she put it, “First of all, I want to keep the relationship at a distance. I don’t want to be influenced by emotions. Sec- ond, there are things I don’t want him to know. I’d rather hire an outside consultant to be my coach.” Although narcissistic leaders ap- pear to be at ease with others, they find inti- macy—which is a prerequisite for mentor- ing—to be difficult. Younger narcissists will establish peer relations with authority rather than seek a parentlike mentoring relationship. They want results and are willing to take chances arguing with authority.

An Intense Desire to Compete.

Narcissis-

Narcissistic leaders often

say that they want

teamwork. What that

means in practice is that

they want a group of yes-

men.

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tic leaders are relentless and ruthless in their pursuit of victory. Games are not games but tests of their survival skills. Of course, all suc- cessful managers want to win, but narcissists are not restrained by conscience. Organiza- tions led by narcissists are generally character- ized by intense internal competition. Their passion to win is marked by both the promise of glory and the primitive danger of extinc- tion. It is a potent brew that energizes compa- nies, creating a sense of urgency, but it can also be dangerous. These leaders see every- thing as a threat. As Andy Grove puts it, bril- liantly articulating the narcissist’s fear, dis- trust, and aggression, “Only the paranoid survive.” The concern, of course, is that the narcissist finds enemies that aren’t there— even among his colleagues.

Avoiding the Traps

There is very little business literature that tells narcissistic leaders how to avoid the pitfalls. There are two reasons for this. First, relatively few narcissistic leaders are interested in look-

ing inward. And second, psychoanalysts don’t usually get close enough to them, especially in the workplace, to write about them. (The noted psychoanalyst Harry Levinson is an ex- ception.) As a result, advice on leadership fo- cuses on obsessives, which explains why so much of it is about creating teamwork and being more receptive to subordinates. But as we’ve already seen, this literature is of little in- terest to narcissists, nor is it likely to help sub- ordinates understand their narcissistic lead- ers. The absence of managerial literature on narcissistic leaders doesn’t mean that it is im- possible to devise strategies for dealing with narcissism. In the course of a long career coun- seling CEOs, I have identified three basic ways in which productive narcissists can avoid the traps of their own personality.

Find a trusted sidekick.

Many narcissists can develop a close relationship with one per- son, a sidekick who acts as an anchor, keeping the narcissistic partner grounded. However, given that narcissistic leaders trust only their own insights and view of reality, the sidekick has to understand the narcissistic leader and what he is trying to achieve. The narcissist must feel that this person, or in some cases persons, is practically an extension of himself. The sidekick must also be sensitive enough to manage the relationship. Don Quixote is a classic example of a narcissist who was out of touch with reality but who was constantly saved from disaster by his squire Sancho Panza. Not surprisingly, many narcissistic leaders rely heavily on their spouses, the peo- ple they are closest to. But dependence on spouses can be risky, because they may fur- ther isolate the narcissistic leader from his company by supporting his grandiosity and feeding his paranoia. I once knew a CEO in this kind of relationship with his spouse. He took to accusing loyal subordinates of plotting against him just because they ventured a few criticisms of his ideas.

It is much better for a narcissistic leader to choose a colleague as his sidekick. Good side- kicks are able to point out the operational re- quirements of the narcissistic leader’s vision and keep him rooted in reality. The best side- kicks are usually productive obsessives. Gyllen- hammar, for instance, was most effective at Volvo when he had an obsessive COO, Håkan Frisinger, to focus on improving quality and cost, as well as an obsessive HR director, Berth

The Rise and Fall of a Narcissist

The story of Jan Carlzon, the former CEO of the Scandinavian airline SAS, is an almost textbook example of how a narcissist’s weaknesses can cut short a brilliant career. In the 1980s, Carlzon’s vision of SAS as the businessperson’s airline was widely acclaimed in the busi- ness press; management guru Tom Pe- ters described him as a model leader. In 1989, when I first met Carlzon and his management team, he compared the ideal organization to the Brazilian soc- cer team—in principle, there would be no fixed roles, only innovative plays. I asked the members of the management team if they agreed with this vision of an empowered front line. One vice presi- dent, a former pilot, answered no. “ I still believe that the best organization is the military,” he said. I then asked Carl- zon for his reaction to that remark. “Well,” he replied, “that may be true, if your goal is to shoot your customers.”

That rejoinder was both witty and dis- missive; clearly, Carlzon was not engag- ing in a serious dialogue with his subor-

dinates. Nor was he listening to other advisers. Carlzon ignored the issue of high costs, even when many observers pointed out that SAS could not compete without improving productivity. He threw money at expensive acquisitions of hotels and made an unnecessary in- vestment in Continental Airlines just months before it declared bankruptcy.

Carlzon’s story perfectly corroborates the often-recorded tendency of narcis- sists to become overly expansive—and hence isolated—at the very pinnacle of their success. Seduced by the flattery he received in the international press, Carl- zon’s self-image became so enormously inflated that his feet left the ground. And given his vulnerability to grandios- ity, he was propelled by a need to ex- pand his organization rather than de- velop it. In due course, as Carlzon led the company deeper and deeper into losses, he was fired. Now he is a venture capitalist helping budding companies. And SAS has lost its glitter.

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Jönsson, to implement his vision. Similarly, Bill Gates can think about the future from the stratosphere because Steve Ballmer, a tough obsessive president, keeps the show on the road. At Oracle, CEO Larry Ellison can afford to miss key meetings and spend time on his boat contemplating a future without PCs be- cause he has a productive obsessive COO in Ray Lane to run the company for him. But the job of sidekick entails more than just executing the leader’s ideas. The sidekick also has to get his leader to accept new ideas. To do this, he must be able to show the leader how the new ideas fit with his views and serve his interests. (For more on dealing with narcissistic bosses, see the sidebar “Working for a Narcissist.”)

Indoctrinate the organization.

The narcis- sistic CEO wants all his subordinates to think the way he does about the business. Produc- tive narcissists—people who often have a dash of the obsessive personality—are good at con- verting people to their point of view. One of the most successful at this is GE’s Jack Welch. Welch uses toughness to build a corporate cul- ture and to implement a daring business strat-

egy, including the buying and selling of scores of companies. Unlike other narcissistic leaders such as Gates, Grove, and Ellison, who have transformed industries with new products, Welch was able to transform his industry by focusing on execution and pushing companies to the limits of quality and efficiency, bump- ing up revenues and wringing out costs. In order to do so, Welch hammers out a huge cor- porate culture in his own image—a culture that provides impressive rewards for senior managers and shareholders.

Welch’s approach to culture building is widely misunderstood. Many observers, nota- bly Noel Tichy in

The Leadership Engine

, argue that Welch forms his company’s leadership culture through teaching. But Welch’s “teach- ing” involves a personal ideology that he in- doctrinates into GE managers through speeches, memos, and confrontations. Rather than create a dialogue, Welch makes pro- nouncements (either be the number one or two company in your market or get out), and he institutes programs (such as Six Sigma qual- ity) that become the GE party line. Welch’s strategy has been extremely effective. GE man- agers must either internalize his vision, or they must leave. Clearly, this is incentive learning with a vengeance. I would even go so far as to call Welch’s teaching brainwashing. But Welch does have the rare insight and know-how to achieve what all narcissistic business leaders are trying to do—namely, get the organization to identify with them, to think the way they do, and to become the living embodiment of their companies.

Get into analysis.

Narcissists are often more interested in controlling others than in knowing and disciplining themselves. That’s why, with very few exceptions, even produc- tive narcissists do not want to explore their personalities with the help of insight therapies such as psychoanalysis. Yet since Heinz Kohut, there has been a radical shift in psychoana- lytic thinking about what can be done to help narcissists work through their rage, alien- ation, and grandiosity. Indeed, if they can be persuaded to undergo therapy, narcissistic leaders can use tools such as psychoanalysis to overcome vital character flaws.

Consider the case of one exceptional narcis- sistic CEO who asked me to help him under- stand why he so often lost his temper with sub- ordinates. He lived far from my home city, and

Working for a Narcissist

Dealing with a narcissistic boss isn’t easy. You have to be prepared to look for another job if your boss becomes too narcissistic to let you disagree with him. But remember that the company is typi- cally betting on

his

vision of the future— not yours. Here are a few tips on how to survive in the short term:

Always empathize with your boss’s

feelings, but don’t expect any empathy

back.

Look elsewhere for your own self- esteem. Understand that behind his dis- play of infallibility, there hides a deep vulnerability. Praise his achievements and reinforce his best impulses, but don’t be shamelessly sycophantic. An in- telligent narcissist can see through flat- terers and prefers independent people who truly appreciate him. Show that you will protect his image, inside and out- side the company. But be careful if he asks for an honest evaluation. What he wants is information that will help him solve a problem about his image. He will resent any honesty that threatens his in-

flated self-image and will likely retaliate.

Give your boss ideas, but always let

him take the credit for them.

Find out what he thinks before presenting your views. If you believe he is wrong, show how a different approach would be in his best interest. Take his paranoid views seriously, don’t brush them aside—they often reveal sharp intui- tions. Disagree only when you can dem- onstrate how he will benefit from a dif- ferent point of view.

Hone your time-management skills.

Narcissistic leaders often give subordi- nates many more orders than they can possibly execute. Ignore the requests he makes that don’t make sense. Forget about them. He will. But be careful: carve out free time for yourself only when you know there’s a lull in the boss’s schedule. Narcissistic leaders feel free to call you at any hour of the day or night. Make yourself available, or be prepared to get out.

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so the therapy was sporadic and very unortho- dox. Yet he kept a journal of his dreams, which we interpreted together either by phone or when we met. Our analysis uncovered painful feelings of being unappreciated that went back to his inability to impress a cold father. He came to realize that he demanded an unrea- sonable amount of praise and that when he felt unappreciated by his subordinates, he be- came furious. Once he understood that, he was able to recognize his narcissism and even laugh about it. In the middle of our work, he even announced to his top team that I was psy- choanalyzing him and asked them what they thought of that. After a pregnant pause, one executive vice president piped up, “Whatever you’re doing, you should keep doing it, be- cause you don’t get so angry anymore.” In- stead of being trapped by narcissistic rage, this CEO was learning how to express his concerns constructively.

Leaders who can work on themselves in that way tend to be the most productive nar- cissists. In addition to being self-reflective, they are also likely to be open, likable, and good-hu- mored. Productive narcissists have perspec- tive; they are able to detach themselves and laugh at their irrational needs. Although seri- ous about achieving their goals, they are also playful. As leaders, they are aware of being performers. A sense of humor helps them maintain enough perspective and humility to keep on learning.

The Best and Worst of Times

As I have pointed out, narcissists thrive in cha- otic times. In more tranquil times and places, however, even the most brilliant narcissist will seem out of place. In his short story

The Cur- few Tolls

, Stephen Vincent Benét speculates on what would have happened to Napoléon if he had been born some 30 years earlier. Re- tired in prerevolutionary France, Napoléon is depicted as a lonely artillery major boasting to a vacationing British general about how he could have beaten the English in India. The point, of course, is that a visionary born in the wrong time can seem like a pompous buffoon.

Historically, narcissists in large corporations have been confined to sales positions, where they use their persuasiveness and imagination to best effect. In settled times, the problematic side of the narcissistic personality usually con- spires to keep narcissists in their place, and

they can typically rise to top management po- sitions only by starting their own companies or by leaving to lead upstarts. Consider Joe Nac- chio, formerly in charge of both the business and consumer divisions of AT&T. Nacchio was a supersalesman and a popular leader in the mid-1990s. But his desire to create a new net- work for business customers was thwarted by colleagues who found him abrasive, self-pro- moting, and ruthlessly ambitious.

Two years ago, Nacchio left AT&T to be- come CEO of Qwest, a company that is creat- ing a long-distance fiber-optic cable network. Nacchio had the credibility—and charisma— to sell Qwest’s initial public offering to finan- cial markets and gain a high valuation. Within a short space of time, he turned Qwest into an attractive target for the RBOCs, which were looking to move into long-distance telephony and Internet services. Such a sale would have given Qwest’s owners a handsome profit on their investment. But Nacchio wanted more. He wanted to expand—to compete with AT&T—and for that he needed local service. Rather than sell Qwest, he chose to make a bid himself for local telephone operator U.S. West, using Qwest’s highly valued stock to finance the deal. The market voted on this display of expansiveness with its feet—Qwest’s stock price fell 40% between last June, when he made the deal, and the end of the third quar- ter of 1999. (The S&P index dropped 5.7% dur- ing the same period.)

Like other narcissists, Nacchio likes risk— and sometimes ignores the costs. But with the dramatic discontinuities going on in the world today, more and more large corporations are getting into bed with narcissists. They are find- ing that there is no substitute for narcissistic leaders in an age of innovation. Companies need leaders who do not try to anticipate the future so much as create it. But narcissistic leaders—even the most productive of them— can self-destruct and lead their organizations terribly astray. For companies whose narcissis- tic leaders recognize their limitations, these will be the best of times. For other companies, these could turn out to be the worst.

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More and more large

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narcissistic leaders in an

age of innovation.

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