Friday, May 21, 2010

Narcissism, Partnership and Strategy, by Walter Kiechel

Narcissism, Partnership and Strategy:

As the great Nebraskan Fred Astaire (born Frederick Austerlitz, Omaha, 1899) used to sing, 'There may be trouble ahead...' An article in the latest issue of Academy of Management Learning and Education reports that over the past 25 years college students in the U.S. have scored steadily higher on tests for narcissism. Professors Bergman, Westerman and Daly note that 'the mean narcissism score of 2006 college students on the Narcissistic Personality Inventory (NPI) approached that of a celebrity sample of movie stars, reality TV winners and famous musicians.'

Fabulous. If that weren't bad news enough, 'Narcissism in Management Education' (Academy of Management Learning and Education, 2010, Vol. 9, No. 1, 119-131) also cites research indicating that 'narcissistic tendencies such as materialistic values and money importance tend to be particularly evident in business students.'

Most studies of narcissists in business focus on their usually awful eventual effect on co-workers. To ride along with them can be energizing, even inspiring at first, but frequently ends in tragedy. As I was reminded last week when I caught one of the last New York performances of Lucy Prebble's 'Enron,' which pretty much reduces that company's rise and fall to a story about Jeff Skilling's increasingly delusional hubris. (A hit in London, the play bombed in Babylon on the Hudson, which already has enough challenges to its own hubristic tendencies these days.)

In a terrific 2001 HBR article, Michael Maccoby argued that a "productive narcissist" can be good for a company — setting out a vision, rallying the troops to achieve it. (As examples he cited Jack Welch and George Soros.) But in my observation, narcissism in strategy-makers almost always represents an invitation to disaster.

This for at least two reasons. Narcissistic executives usually create around themselves a miasma of distrust. They take credit for other's work, value no one else's ideas as highly as their own, and are so busy looking after No. 1 that they can be oblivious to the welfare of others. This makes it tough to develop a strategy in consultation with colleagues, who usually know more about vital details of the competitive situation than the Great One. And even tougher to actually carry the strategy out, except under the narcissist's lash, which most talented people quickly lose a taste for.

The more fundamental problem may be that with sufficient feeding of their grandiosity, narcissists deteriorate in their ability to do what psychologists call 'reality testing,' being able to spot the difference between the movie they're playing in their heads (guess who the star is) and what's actually going on in the world.

The classic posterboy for this syndrome: John De Lorean, father of the Pontiac GTO, who when he wasn't hanging out with movie stars or marrying again was going to set the automotive world on fire with the De Lorean Motors gull-wing doored DMC 12. The entrepreneur's arrest for drug-trafficking — allegedly to raise money for his failing company — put the finishing touches on that endeavor; even though he eventually beat the charge, he would spend the rest of his days bouncing down the stairs, eventually into personal bankruptcy.

In the face of what may be a rising tide of MBAs with, how shall we say, narcissism issues, and the chance that some may climb into strategy-making positions, the news of Britain's new coalition government comes as all the more intriguing. Here you have two politicians, David Cameron and Nick Clegg, heads of rival parties, who, admittedly under serious pressure, manage to quickly form a partnership that has at least some observers suspecting that the country may have lucked into a governing solution better than any one party could have afforded.

For all the usual bromides about how 'you can't run a company by committee' and 'you gotta have clear lines of authority,' partnerships have worked remarkably well in running a few fabled companies, including in setting their strategy. The modern Walt Disney Co. was at its best when Michael Eisner was complemented by Frank Wells. Coca-Cola's patrician, aloof Roberto Goizueta wouldn't have accomplished nearly as much without the consummately personable Donald Keough presenting a smiling corporate face to the world. Some of us wonder whether Goldman Sachs would be in the doghouse it is today if it had stayed with its tradition of two-headed leadership — John Weinberg teamed with John Whitehead, Robert Rubin with Steve Friedman. Astaire wasn't the only Nebraskan who appreciated the value of a good partner — to every Warren Buffet, his Charlie Munger.

If you have responsibilities for forging strategy, consider asking yourself three partnership-related questions:

  1. Would the enterprise be better off if I were sharing this work? More information boiled into the process, including that all-important dissident information? More minds and hands enlisted in the success of the strategy from the outset?
  2. If I were to recruit a partner or two, who would they be, and why? As wonderful as you and your mix of skills likely are, imagine all that a complementary set might bring to the brew.
  3. If you don't have a partner already, why not?

Hmmm, anyone else detect of slight whiff of narcissism in the air around here?

Walter Kiechel III is the former Editorial Director of Harvard Business Publishing, former Managing Editor at Fortune magazine, and author of The Lords of Strategy: The Secret Intellectual History of the New Corporate World. He is based in New York City and Boston.


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