Sometimes you have to give more to get more. The same is true when it comes to how CEOs lead their company and how well their company performs. According to a new study (Peterson, Galvin, & Lange, 2012), when the CEO (usually the most powerful and influential player in the organization) demonstrates servant leadership, the firm becomes more successful.
THE ROLE OF SERVANT LEADERSHIP
Recently, organizational research—in combination with business strategy—has shifted its interest to study how the more relational styles of leadership have an impact at the organizational level. In this study, servant leadership was the style of choice and is defined as leading by placing a heavy weight on personal integrity, caring for the needs of followers, and having a “strong moral compass.” The authors wanted to see the organizational outcomes of servant leadership, as well as understand what determines this leadership style.
After sampling 126 CEOs from the technology industry, the researchers found that narcissism negatively predicted servant leadership. This means that the more narcissism a CEO had, the less servant leadership they engaged in. The researchers also found that CEOs who were founders of the firm they lead were more likely to engage in servant leadership. This is because the founder-CEOs viewed their identity as being synonymous with the identity of the organization. As for firm performance, servant leadership was associated with return on assets, meaning that there is a relationship between leading by valuing others more highly than oneself and organizational performance.
PRACTICAL IMPLICATIONS FOR ORGANIZATIONS
The most obvious practical implication is that the non-narcissistic, founding CEO who highly identifies with his or her organization and displays servant leadership will be more successful. But there are other important points to note. As the authors suggest, having leaders at any level possess a “we” mentality over a “me” mentality will lead to more organization-wide servant leadership. Also, knowing what kind of leadership characteristics to identify will be helpful to anyone involved in the decision-making process in promoting or selecting new leaders for the future.
Peterson, S. J., Galvin, B. M., & Lange, D. (2012). CEO servant leadership: Exploring executive characteristics and firm performance. Personnel Psychology, 65, 565-596.