Narcissistic Leaders: The Incredible Pros, the Inevitable Cons

Welch’s approach to culture building is widely misunderstood. Many observers, notably Noel Tichy in his book The Leadership Engine, argue that Welch forms his company’s leadership culture through teaching. But Welch’s “teaching” involves a personal ideology that he indoctrinates into GE managers through speeches, memos, and confrontations. Rather than create a dialogue, Welch makes pronouncements (either be the number one or two company in your market or get out), and he institutes programs (such as Six Sigma quality), that become the GE party line. Welch’s strategy has been extremely effective. GE managers 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 productive 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 psychoanalytic thinking about what can be done to help narcissists work through their rage, alienation, 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 narcissistic CEO who asked me to help him understand why he so often lost his temper with subordinates. He lived far from my home city, and so the therapy was sporadic and very unorthodox. 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 unreasonable amount of praise and that when he felt unappreciated by his subordinates, he became furious. Once he understood this, 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 psychoanalyzing 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, because you don’t get so angry anymore.” Instead of being trapped by narcissistic rage, this CEO was learning how to use his anger effectively and to express his concerns constructively.

Leaders who can work on themselves in this way tend to be an organization’s most productive narcissists. In addtion to being self-reflective, they are also likely to be open, likeable, and good-humored. Productive narcissists have perspective and are able to detach themselves and laugh at their irrational needs. Although serious 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 chaotic times. In more tranquil times and places, even the most brilliant narcissist will seem out of place. In his short story The Curfew Tolls, Stephen Vincent Benét speculates on what would have happened to Napoléon Bonaparte if he had been born some 30 years earlier. Retired 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 can use their persuasiveness and imagination to best effect. In settled times, the problematic nature of the narcissistic personality usually conspires to keep narcissists in their place, and they can typically only rise to top management positions by starting their own companies or by leaving to lead upstarts. Consider Joe Nacchio, formerly in charge of both the business and consumer divisions of AT&T. Nacchio was a supersalesman and popular leader in the mid-1990s. But his desire to create a new network for business customers was thwarted by colleagues who found him abrasive, self-promoting, and ruthlessly ambitious.

Two years ago, Nacchio left AT&T to become CEO of Qwest, a company that is creating a long-distance fiber-optic cable network. Nacchio had the credibility—and charisma—to sell Qwest’s initial public offering to financial 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% from last June when he made the deal to the end of the third quarter. (The S&P index dropped 5.7% during 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 finding 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 narcissistic leaders recognize their limitations, these will be the best of times. For others, these could turn out to be the worst.

"Narcissistic Leaders: The Incredible Pros, the Inevitable Cons" by Michael Maccoby won a McKinsey Award, which recognizes the two best Harvard Business Review articles published each year. The award goes to outstanding works that are likely to have a major influence on the actions of business managers worldwide.