The Economist article [October 1st -7th, 2011] makes enjoyable reading for its irreverant attack on the myth of the superleader. It pulls together ideas that have been bobbing about in the waves of critical theory of leadership for some time.
Companies can point to one strong piece of evidence in favour of hiring outsiders: share prices usually leap at the news. But a gathering pile of academic studies points to the opposite conclusion…. [In an unpublished paper] Richard Cazier of Texas Christian University and John McInnis of the University of Texas at Austin bring a new level of rigour to the debate. They discovered that the pay premium of CEOs is negatively correlated with the future performance of the firm that does the hiring. In other words: the more dazzling the outside recruit, the worse he performs in his new role.
This may be because superstars have an inflated opinion of their own abilities. They assume all the credit for the success of their previous firm, when in fact many others were involved. And they imagine that they can transform a corporate culture single-handed. Usually, they can’t. The authors observe that the tendency to hire CEOs who have done well elsewhere is most common among firms “with busy and inattentive boards”.
Feet of Clay?
The text book Dilemmas of Leadership traces the rise and fall of the heroic leader. The concept received a blow through the epithet that ‘no man is a a hero to his valet’. New Leadership theories have increased suspicion of the dark side of charisma, and the benefits of distributed leadership.
The new form of Superleader
Nor should we forget the concept that organisational leadership may be mythologised but in practice is often widely distributed. The superhero is now more usefully regarded as the sum of efforts of a team rather than through a charismatic individual, however well-superannuated.