#Leadership & Power: Good Girls Don’t Talk

Find “your voice”, “speak your mind”, if I hear this advice to women one more time, I think I’m going to scream. Why? Because at least for high powered women, speaking your mind may result in backlash.

A recent study by Victoria Brescoll suggests that a high powered female CEO who was perceived to talk more than the average CEO was ranked by both male and female observers as less competent and less “suitable for leadership” than a male CEO who spoke for an equal amount of time. It also showed that male CEOs who were less talkative than average was seen as less competent and less suitable for leadership than a more talkative male CEO.

Powerful women reported reducing their volubility (or the amount of time they spoke in a group), because they feared backlash. And that backlash is real, if the study is accurate. Less powerful women did not reduce their contributions, however, their contributions were different than those of men.  Women were more interested in developing and maintaining relationships with others in the group, while men were more interested in establishing dominance.

Here is the unfortunate result of this research. It suggests the double bind that women experience in leadership roles. In order to be perceived as powerful and competent, they must act in a way that is inconsistent with power.  So if leaders talk, and powerful leaders talk more, but women aren’t allowed to talk, then they can not acquire power.  You get my drift.

This makes me sad, frustrated and angry all at once.  As an extroverted, talkative person, I hate this. But I can’t change it. I can only be aware of it. And I can work with my students to help them understand this double standard. If both men and women can see how their gender role expectations influence their judgements of both men and women, the possibility exists that we can reduce the impact of these judgements in the future. Maybe. Meantime, I’m going to be a bit more judicious in encouraging my female students to “find their voice”.

Source: Brescoll, Victoria L. “Who Takes the Floor and Why: Gender, Power, and Volubility in Organizations.” Administrative Science Quarterly 56, no. 4 (December 1, 2011): 622–641.

#Leadership: Human Capital & Motivation

Nations prosper when every one, including the poor, believe that they will profit fairly from investment and growth. When people believe that the spoils of prosperity are unequally and unfairly distributed, they disengage from development and self-reliance, according to a recent article in the New York Times.  Greater income gaps are often a symptom of a broader problem with cultural inequity.

For those of us living in developed Western nations, income gaps are increasing and are increasingly differentiating the working class and middle class professionals.  Access to health care and education are particularly influenced by socio-economic status. The U.S. vaunted upward social mobility is now just a myth. If the research is correct, this will likely lead to reduced prosperity. Not a pretty picture.

So why does this matter to business leaders? Part of strategic leadership is the acquisition, development and retention of human capital (or people, as I like to call them). If people feel that the benefits of their work go disproportionately to others in an organization they will be de-motivated. As a result, the design of remuneration and reward and recognition programs are essential to effectively delivering on an organization’s strategy. Paul Marciano, in the Monster Inc Blog talks about ineffective reward and recognition programs:

Imagine fitting employees into one of three buckets: Top performers, average performers and poor performers. Now, when you put a program into place, who wins? The top performers! What is the impact on the poor performers? None or negative; the program is just another example of their “loser” status in your organization.

Even worse, often these programs are not well designed and reward bad behaviour or the boss’ favourite person. So employees feel that the deck is stacked against them, there is no way they are going to get a fair shake from the system. The same goes for “high potential” leadership development programs and other types of programs designed to separate the “stars” from the “average” employee.

As Henry Mintzberg noted, creating categories like “stars” and all others, “we demote” everyone else, and discourage community, collaboration and engagement.

Rather than rewarding individual performance, creating huge financial rewards for a small few, leaders need to think about how to engage all organizational citizens, ensuring that everyone gets a piece of increased prosperity, not just a select few.

CEOs Do Impact Performance, but Not the Way You Think

CEO narcissism impacts company strategy and performance. Donald Hambrick and Arijit Chatterlee, in a 2007 study, demonstrated that CEO narcissism influenced the degree of strategic dynamism, strategic grandiosity, extreme operating results and highly fluctuating results.

Narcissism consists of the four traits: 1) superiority/arrogance; 2) exploitation/entitlement; 3) self-absorption/self-admiration; 4) leadership/authority. (Emmons 1987 in Chatterjee & Hambrick 2007).

The study found that the more narcissistic the CEO, the more likely they were to rapidly change strategy (strategic dynamism) and to choose highly visible, risky strategies. The authors suggested that this was because a narcissist needs ongoing attention and congratulations for their actions.  These visible, bold, even risky strategies are more likely to result in either highly successful ventures or great failures because of their audacity. These ventures are “grandiose” in their vision. The authors measured the number, sized and relatedness of acquisitions as a measure of grandiosity.

The most interesting aspect of this study was the method used to measure narcissism. Authors selected 105 companies in the technology software and hardware industries from 1992 – 2004. They then analyzed annual reports for the number, size and composition of photos of the CEO. Additionally they considered the CEO’s visibility in company press releases, and CEO’s use of the pronouns “I and me” in press interviews. Finally they considered CEO cash and non-cash compensation as compared to the next highest paid individual in the firm.

Their study showed that even moderate increases in CEO narcissism are linked to more extremes and more fluctuating performance.  However, on average, narcissistic CEOs performed no better or worse than non-narcissistic CEOs, at least in terms of total share holder return.

The authors also controlled for organizational culture, finding that the CEOs in the sample who had changed companies maintained similar degrees of narcissism, while there appeared to be wide variation of CEO narcissism between successive CEOs at the within firms. This led the researchers to believe that it was the CEO and not the firm that was narcissistic.

As an investor, if you are looking for stable, reliable returns, you might want to consider the results of this study. While investing in a company managed by a narcissist may result in outrageously successful results, it may also result in stunning failures. Investors looking for stable consistent results may find this type of firm unattractive. It’s important to note that this study looked at a single industry. It may be possible that results might be different when looking at different industries.

In addition to extreme, risky and fluctuating performance, narcissistic CEOs can have a toxic impact on the culture of an organization, resulting in the loss of talented employees and the demoralization of those remaining. It’s worthwhile to consider the personality of the CEO when buying stock or considering employment at any company. It will tell you a lot.

Chatterjee, A. & Hambrick. D. (2007). It’s all About Me: Narcissistic Chief Executive Officers and Their Effect on Company Strategy and Performance. Administrative Sciences Quarterly. 52: 351-386.

How to Effectively Use the SWOT Framework

I’ve just finished my stint as a preliminary round judge for the Venture London Business Competition, reading six new business plans.  Some of the plans featured great ideas, but were poorly written or did not do a great job of developing the business model.  But the biggest error most of the would-be entrepreneurs made was misusing the SWOT analytical framework.

Anyone who has taken a business course in the last twenty years has heard of SWOT (Strengths, Weaknesses, Opportunities and Threats). But because most people don’t use it correctly, most business profs HATE the framework.

There are two basic problems with SWOT. The first is that most people mix up the Strengths & Weaknesses (S/W) with the Opportunities & Threats (O/T). The second is that most people develop a SWOT and then move on without out drawing any conclusions or actions that should happen as a result of the SWOT.

So let’s start with the first problem. Strengths and weaknesses are a result of the internal environment of the organization. In other words, they are an assessment of the organizations resources, capabilities and core competencies. Opportunities and threats reflect the potential impact of the external environment on the organization. They consider the general environment, political, economic, social and technological trends, as well as the changes within the industry of an organization.  It’s important to rigourously observe the distinctions between these two categories, or the analysis gets so muddled, it’s useless.

Slapping a SWOT table down on paper without interpreting what this means for the business is a waste of time. So now, it’s important to ask “So what do this mean that I have to do in order to address these strengths, weaknesses, opportunities and threats?”

Typically we try to defend against threats and exploit opportunities. So list the specific actions that you will take to defend or exploit. Be specific. What are the competitive actions you plan to take to defend? How do you plan to deal with a change in technology, or anticipated regulatory changes?

Then we try to either offset weaknesses or maintain and/or build strengths. For example, if you have a weakness in technical skills, you might plan to hire or to identify potential business partners with those skills. If you lack the cash to launch your new product innovation (a weakness), then you need to find investors. If your strength is in new product development, you might want to consider how to maintain and build that strength. For example, if customer preferences are shifting, investing in marketing research might be a good way to build your product development skills.

Bottom line, any analytical framework it only useful if you can draw conclusions and proposed actions from your analysis. If my favourite answer is “It depends”, then my favourite question is “So what?”.