The Individual and Combined Effects of CEO Humility, CEO Narcissism, and CEO Competence on Firm Performance
While humility as a characteristic of top managers has attracted increasing attention in recent years, there are still many misconceptions about what humility actually is, and about how a humble CEO could benefit or harm a firm’s performance. In contrast to the case of humility, the leadership traits of narcissism and competence are often emphasized as desirable. This study challenged the view of humility as associated with shyness or lack of self-esteem, and, in contrast, positioned it as a critical strength for strategic leaders possessing it, and a dangerous weakness for those lacking it. Humility was conceptualized as having five dimensions: accurate self-awareness, appreciation of others, teachability, low self-focus, and self-transcendent pursuits. The primary purpose of the study was to examine the impact of CEO humility on firm outcomes. Furthermore, I argued that humility can not only coexist with CEO competence, and with some degree of CEO grandiose and vulnerable narcissism, and, but that the most benefit for companies occurs when the CEO embodies combinations of these characteristics. To test my model, I developed and validated a new unobtrusive measure of CEO humility, through two pilot studies, and used a sample of 102 male CEOs to test my hypotheses. The findings showed partial support for the positive effects of CEO humility on firm performance, and partial support for the positive moderating effect of CEO humility on the relationship between CEO grandiose narcissism and performance performances. Post-hoc analyses explored the dimensionality of the humility and competence variables, and examined the relationships included in my model by using individual items and dimensions of these two constructs.