“75% of CEO’s think that they belong in the group of 25% best managers”. This quote by Professor Manfred Kets de Vries (Insead, France), expert on dysfunctional behaviour in top management, is based on his experiences with the CEO’s that he coached.

One of the most common behaviours in this respect is narcissism. This is not new at itself but a recent research (Rijsenbilt, 2011) shows hard evidence about the negative effects of narcissism in top management for a company.

What is narcissism?

The origin comes from the beautiful, proud and unfeeling Greek Narcissus who refused the love of a nymph. Aphrodite, the goddess of love punished Narcissus with self-love. Narcissus then fell in love with a reflection in a pool, not realizing it is his own reflection. He reaches out for the beautiful reflection, bows further and further and drowns in his own image.

Today, in psychological terms, narcissism reflects the personality trait of self-love which includes a set of character traits like vanity, hubris, selfishness, self esteem, self confidence, egoism, dominance, ambition and a lack of empathy (DSM-IV). Narcissistic individuals usually lack self esteem and self confidence and try to compensate these shortcomings by presenting themselves as being more important than others and they are constantly looking for affirmation. This is called the narcissistic paradox; in order to protect themselves from being criticized by others, narcissistic people tend to ignore the feelings, sayings and behaviours of others and therefore cultivate their own underdeveloped feelings of empathy.

Effects of narcissistic CEO’s

CEO’s with an average level of narcissism are very effective, based upon a secure self-esteem; this solid self-esteem secures the rights and wellbeing of others. These CEO’s are great visionaries with charisma and they can inspire a great number of followers. They are not obsessed with power, they use the formal power of their position accordingly, they create a positive culture and a productive and motivated workforce.

CEO’s with high levels of narcissism can be dysfunctional, obsessed with power, not respecting others’ rights and well-being and they are arrogant, suspicious and even paranoid. They treat human beings as objects and are totally self-centred which forms the most important indicator for defective leadership. They abuse their formal power in many ways, create a negative company culture and an unproductive, unmotivated workforce. The company results are negatively influenced by these CEO’s and they score a ROA (return on assets) which is in average 11% lower.

In practice high level narcissistic CEO’s surround themselves with subordinates who agree with everything this CEO says, does and wants, and these followers keep on complimenting and confirming the high quality performance of this narcissistic CEO, the so called ‘yes nodders’ or ‘his masters voices’. The effect in the organisation is paralysing.

The small top group is like an ‘ivory tower’, questions or new ideas from ‘outside’ are not tolerated, discussion is impossible. Employees are sitting and waiting for orders from above to execute them without asking, even if they don’t understand what they should do. They do what they think they are supposed to do, and if they did wrong they will hear it in all negative wordings.

How to recognise narcissism?

The four components that together enables to recognise narcissism are:
- authority / leadership: ‘I like to be the centre of attention’
- superiority / arrogance: ‘I am better than others’
- self-admiration: ‘I am preoccupied with how extraordinary and special I am’
- entitlement: ‘I insist upon getting the respect that is due to me’.

If you recognise these four factors combined at a high level in the daily behaviour of a person you can be pretty sure that this person is highly narcissistic.

Boards and narcissists

Because they have this top position only board members can handle the highly narcissist CEO, if they cooperate and have the guts. Boards should be aware that at the top of an organisation there is space for a CEO to become more and more narcissistic and that this is a danger for the organisation.

The research shows that higher level narcissists have larger boards with more members and more frequent board changes meaning that the board is less effective in this power play. One of the first things a newly appointed high narcissistic CEO with a low board power will do is directly move toward a statutory change because ‘the power of the board cannot surpass the power of the CEO’. This also leads more easily to fraud and corruption because these CEO’s feel that the company procedures, rules and values don’t apply for them and their position feels ‘untouchable’ to them.

Where do we find high level narcissists?

In the top of every organisation and in every profession where a top person has the (nearly) absolute power and/or knowledge. You may think of CEO’s in (non)profit organisations, but you also find narcissists in sectors like e.g. medicine, law, politics, army etc.

Dealing with narcissists as an employee

It is absolutely not easy to deal with narcissists because they have the power of their top position. You have to be an adult when they are running around acting like kids, it requires wisdom and strength.

Narcissists exploit weaknesses, or they create it in people. They are charming. They make you feel you are the greatest, they make you dependent on their approval.

Don't criticize them face to face, they never forget and they will take revenge on you. Remember that knowledge is not wisdom, wisdom is the ability to make the right choices. Understanding them and yourself is the only way to survive in playing along in their game.

Dealing with narcissism  

My belief is that every single person knows that (s)he is performing well or performing bad or something in between, you always know how you executed a task, for yourself!

Admitting this is something different, everybody finds defence mechanisms to cope with their personal situation. But this will not change the situation thus it will not improve the personal well-being. This also applies for narcissists. The only solution for high level narcissists is to recognise to themselves that they need counselling and that they make a conscious choice for it.

That is the only way they will be able to improve their personal happiness and the well-being of the organisation and people they are responsible for.

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