Truth 28. Charisma Is Not Always an Asset

While the media tends to love charismatic leaders, charisma is not always needed nor an asset.

If you have any doubts that there are negatives associated with charisma, let me just name three charismatic leaders: Adolph Hitler, Charles Manson, and Osama bin Laden. In addition, less well-known destructive charismatics include the “Queen of Mean” Leona Helmsley, Ken Lay and Jeff Skilling at the now defunct Enron, and Tyco’s former CEO Dennis Kozlowski (who is serving an 8-to-25-year sentence in a New York prison).

Research tells us that charismatic leadership is not always needed to achieve high levels of employee performance. There are situations that favor it. Charisma appears to be most appropriate when the follower’s task has an ideological component or when the environment involves a high degree of stress and uncertainty. This may explain why, when charismatic leaders surface, it’s more likely to be in politics, religion, war time, or when a business firm is in its infancy or facing a life-threatening crisis. In the 1930s, Franklin D. Roosevelt offered a vision to get Americans out of the Great Depression. In 1997, when Apple was floundering and lacking direction, the board persuaded cofounder Steve Jobs to return as interim CEO to inspire the company to return to its innovative roots.

In addition to ideology and environmental uncertainty, another situational factor limiting charisma appears to be level in the organization. As noted in Truth 27, “Charisma Can Be Learned,” the creation of a vision is a key component of charisma. But visions typically apply to entire organizations or major divisions. They tend to be created by top executives. As such, charisma probably has more direct relevance to explaining the success and failures of chief executives than of first-line supervisors.

And then there is the dark side of charisma. Those charismatic leaders, who are larger than life, often don’t act in the best interests of their organizations. Many use their power to remake their organizations in their own image. They often blur the boundary separating their personal interests from their organization’s interests. And at its worst, the perils of this ego-driven charisma are leaders who allow their self-interest and personal goals to override the goals of the organization. Intolerant of criticism, they surround themselves with yes-people who are rewarded for pleasing the leader and they create a climate in which people are afraid to question or challenge the “king” or “queen” when they think he or she is making a mistake.

The dark side of charisma reveals leaders who use power for personal gain, promote their own personal vision, stifle critical or opposing viewpoints, consider their decision insights superior to others, and who become insensitive to others’ needs. They become egotistical, narcissistic, manipulative, and often ruthless. The same confidence, drive, communication skills, and charm that led to a positive charismatic persona become a powerful aphrodisiac driven by self-interest.

A study of 29 companies that went from good to great (their cumulative stock returns were all at least three times better than the general stock market over 15 years) found an absence of ego-driven charismatic leaders. Although the leaders of these firms were fiercely ambitious and driven, their ambition was directed toward their company rather than themselves. They generated extraordinary results, but with little fanfare or hoopla. They took responsibility for mistakes and poor results but gave credit for successes to other people. They channeled their ego needs away from themselves and into the goal of building a great organization. This study is important because it confirms that leaders don’t necessarily need to be charismatic to be effective, especially where charisma is enmeshed with an outsized ego.