Aug. 12, 2014 at 10:05 AM ET
For corporate America’s next act, big egos need not apply.
A new study suggests that people who come of age in a recessionary economy are less likely to develop narcissistic tendencies, or an egotistical preoccupation with self, common among successful business leaders. As the young adults who entered the workforce during the worst recession in decades establish their career footing and move into leadership positions, this could mean fewer big heads as company heads.
“If the pattern still holds, we should expect the generation that’s been entering the workforce in the last five years or so might be more humble,” said Emily Bianchi, an assistant professor of organization and management at Emory University, in Atlanta. Bianchi found that people who enter their adult years during times with higher unemployment rates rank lower on measures of narcissism later in life.
This could be a plus for companies that need team-oriented, consensus-building leadership, said John Challenger, CEO of executive outplacement firm Challenger, Gray & Christmas.
“When you get egotists and narcissists who stab each other in the back and put themselves first, projects get delayed [and] don’t get done well,” he said.
Bianchi also found that recession-era CEOs tended to give themselves lower compensation compared to other executives. Challenger said fewer inflated egos could mean less-inflated salaries.
“People who aren’t as narcissistic don’t have this hubris that it’s all because of them and they should get paid commensurate with this outsized sense of who they are,” he said.
Conversely, one drawback could be a dulling effect on entrepreneurship, Bianchi said. “You have to take a certain amount of risk to go out on your own,” she said, and the risk-aversion that characterizes today’s young adults could have a spillover effect on their willingness to start new ventures. “Narcissism certainly is correlated with risk-seeking,” she said. “If they are less narcissistic, the odds are people will be more risk averse.”
Challenger suggested the next generation of business could be more about expansion than experimentation. “It may be more of an era of consolidation when this age demographic is in power… [and] build companies to another level rather than start them up,” he said.
More humble executive suites could have a profound effect on the technology sector in particular, Challenger said, with a potential shift from start-up to consolidation mode. “The tech sector is going to be looking for leaders that can take companies... that were formed in this generation and take them to the next generation,” he said.