Personal Finance

Why boards need to hire humble CEOs

leader
scottbellows

Summary

  • Many of our most famous CEOs of Kenyan banks, investment companies, and real-estate development firms subscribe to bombastic and egotistical leadership styles.
  • An influential research study by Amy Ou, David Waldman, and Suzanne Peterson found significant evidence that the level of humility in the top executive of a firm comes with measurable positive organisational benefits.

Look at me”, “listen to what I did”, “she took this path”, “he went the other direction”, and “here is how I lead”. Turn on any business news programme and invariably some topics come up about qualities, attributes, and characteristics of a good leader. Mountains of books, columns, articles, and research highlight various opinions on what contributes to a strong leader.

But, sadly, all too often the loud, boastful, whining, or arrogant leadership candidate gets the position. Employees and managers often acquiesce to the loudest person in a team instead of consistently and tiringly arguing and debating with that individual.

So, arrogance becomes contagious and whining begets more whining.

Many of our most famous CEOs of Kenyan banks, investment companies, and real-estate development firms subscribe to bombastic and egotistical leadership styles, proclamations, and self-gloating.

But what about the towering figures of more humble CEOs and leaders such as Manu Chandaria, Patrick Njoroge, Joshua Oigara, Joram Mwinamo, or the late Bob Collymore? Are these successful and yet humble executives merely outliers on the road to leadership success or is there scientific proof for the role of humility relating to company performance outcomes?

Essentially, do humble leaders fair better and cause superior or shoddier results for their organisations?

An influential research study by Amy Ou, David Waldman, and Suzanne Peterson found significant evidence that the level of humility in the top executive of a firm comes with measurable positive organisational benefits.

First, a loud, boastful, whining, or arrogant CEO tends to make decisions all by themselves without involving others.

A humble CEO, by contrast, will more likely engage in shared joint decision making with his or her top executive team, thus resulting in better decisions.

Second, a proud chief executive will often dictate strategic direction downwards while the modest and respectful leader allows bottom-up strategic input and direction imparting that enables a more shared vision for the entity.

MORE COLLABORATION

Third, an overbearing leader will stifle debate and force their top managers to listen to them while the unassuming and meek executive will actively listen to his or her team thus creating more collaboration and open information sharing that leads to higher levels of innovation and creativity.

Fourth, humble CEOs are 426 percent more likely to have low salary disparity between their own compensation and that of their team, thus causing higher management satisfaction and an egalitarian outlook.

Fifth, humble CEOs create more integrated senior leadership teams.

These five remarkable positive behavioural actions typical of humble CEOs relate remarkably high in advanced statistical analysis with higher firm performance.

Inasmuch, instead of allowing arrogant boastful leaders to manipulate our subconscious primitive desires to have leaders in ancient situations protect us against wild animal attacks that are irrelevant in modern societies, on the boards of directors on which you sit and serve, give serious thought and consideration to the humble CEO candidates that you vet and interview.

Your long-term organisational success depends on it.

Want to gauge your own levels of humility as a leader? Other research by June Tangney shows that humble leaders often under-report their own levels of humility when self-assessing. So, get a subordinate to assess whether they feel that they strongly disagree (1), disagree (2), neither agree nor disagree (3), agree (4), or strongly agree (5) with each of the following six statements about you.

My manager actively seeks feedback, even if it is critical and can be negative. My manager takes notice of the strengths of others. My manager does not think of himself or herself as overly important. My manager does not have a big ego. My manager is truly a humble person.

Total up the points corresponding to each response choice. If your subordinate rates you as 24 or higher, then you stand out as a remarkably humble leader.

If you scored between 18 and 24, then you are moderately humble.

If you received a score of less than 18, then sorry. You cannot consider yourself humble and should seek out executive coaching.

Dr Scott may be reached on [email protected] or on Twitter: @ScottProfessor