Feeling Guilty About a Mistake? Is it a Sign of Leadership Potential?

Stanford Professor Francis Flynn and doctoral student Becky Schaumberg have conducted an interesting new study about leadership.    They administered a personality test to groups of 4-5 people.  The test examined guilt proneness, shame proneness, extraversion, and other traits.  They were particularly interested in the distinction between guilt and shame.   Feeling guilty means that someone "feels bad about a specific mistake and wants to make amends."  Feeling shame means that someone "feels bad about himself or herself and shrinks away from the error."

In this experiment, the groups had to perform two tasks after completing the personality inventory.   The subjects evaluated each others' leadership qualities after completing these tasks.  It turns out that the people who scored highest on the "guilt proneness" measure tended to be identified as the strongest leaders.  In fact, guilt proneness "predicted emerging leadership even more than extraversion."  According to Schaumberg, "Guilt-prone people tend to carry a strong sense of responsibility to others, and that responsibility makes other people see them as leaders."  

Well... I guess I may have some leadership potential... after all, I'm Catholic, and we are experts at feeling guilty!   Seriously, though, I think the study points to something very important.  Feeling a responsibility to others is the mark of a good leader.  Moreover, wanting to atone for your mistakes, rather than simply trying to cover them up, makes for an effective leader.   I wonder how we might look for those characteristics as we interview young people for leadership positions early in their careers.  Thoughts? 

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Are Risky Personal Behaviors Associated with Risky Business Decisions?

Bob Sutton's blog has pointed me to a terrific article by New York Times writer Steven Davidoff.  The piece is titled, "A Mirror Can Be a Dangerous Tool for Some CEOs."   Davidoff examines the effects of CEO personality on business actions and performance, drawing on some interesting academic research. Here is an excerpt:

Arijit Chatterjee and Donald C. Hambrick said in a 2006 paper that narcissism among chief executives encouraged more volatile company performance. In a study of 111 chief executives in the technology industry, the authors found that indicators of narcissism correlated not only with company performance but also with the pursuit of deals.  The study was criticized for overstating the power a chief executive has over a company. But additional research has shown that a top executive’s personality can have powerful effects on how a corporation is operated.  For example, Henrik Cronqvist, Anil K. Makhija and Scott E. Yonker found that the level of debt for a company was related to how much a chief executive was willing to borrow to buy a house. Matthew Cain and Stephen B. McKeon looked at chief executives who had pilot licenses. Flying small planes is viewed as thrill-seeking behavior. Professors Cain and McKeon found that chief executives with pilot licenses were more prone to engage in acquisitions, with the theory that takeovers are risky, yet exciting ventures.

I think the latter two studies are truly fascinating.  One of our Bryant honors students (now finishing his MBA at Duke) completed a senior thesis examining similar relationships.  He analyzed people who enjoyed sky-diving , and likewise, he found that those individuals tended to exhibit riskier choices in other parts of their lives as well.  What is the implication of such studies?  I believe it suggest that we should be taking a look at signals that suggest an executive may have a high propensity to take risk or strive for the public spotlight, and we should search broadly for those signals.  However, we have to be careful.  These studies demonstrate a pattern that emerges, on average, from the data.  That does not mean every thrill-seeker will be advocating risky corporate acquisitions.

These studies do make a broader point as well about acquisitions.  They re-emphasize the fact that many CEOs do deals for reasons beyond the impact on shareholder value.   Many individuals find deal-making to be exciting and satisfying.  They derive much personal utility from such deals.   However, that "thrill-seeking" may be to the detriment of shareholders, customers, and employees.  

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