Conscientious, open, agreeable, and stable leaders - A recipe for income growth
A recent article by Randall Peterson of London Business School examines the relationship between CEO personality and the functioning of the top management team. There seems no obvious reason why the results should not extend to the relationship between the personalities of team leaders and their teams lower in the organisation's hierarchy.
Peterson and his colleagues started from the premise that the leader's personality will affect how the senior management team interacts and that this, in turn, will determine how the organisation performs. They looked at this proposition in terms of the 'Big 5' personality dimensions of:
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Conscientiousness
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Emotional Stability
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Agreeableness
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Extraversion
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Openness
Their method was to go through archival records of both leader personalities and top team performance and to relate these to organisational performance. Although this does not seem the most robust methodology, their findings are, at least, thought provoking.
Some of the key findings are:
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Conscientious leaders had top teams that were more flexible, in control, cohesive, decentralised and lower in corruption. They were also characterised by the leader's dominance.
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Emotionally unstable leaders had top teams that were more rigid, factional and higher in corruption. They were also characterised by the leader's weakness.
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Agreeable leaders had top teams that were more cohesive, decentralised and lower in corruption.
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Extravert leaders had top teams that were characterised by the leader's dominance.
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Open leaders had top teams that were more flexible, risk-taking and more characterised by the leader's dominance.
In turn, income growth was related to the top team being flexible, cohesive, risk taking and optimistic. (No relationship was found between optimism and the leader's personality.)
The authors recommend monitoring the climate of the top team that is created by the CEO's personality as this climate will affect business results.
How can Human Assets help you use these results?
Clearly, the personality of the leader affects the functioning of the team and thereby the success of the business. As psychologists, we can help by:
Providing a sophisticated assessment of personality, both for people you are considering for leadership positions and those already in place.
Making leaders already in position aware of their personality characteristics and the impact these might well be having on the team.
Coaching leaders to modify the way they present themselves, if not actually altering their personality, so that their impact on others is positive.
Reference
Peterson, R.S., Smith, D. B., Martorana, P. V., and Owens, P. D. (2003). The impact of chief executive officer personality on top management team dynamics: One mechanism by which leadership affects organizational performance. Journal of Applied Psychology, 88, 795-808.
Newsletter: 2003