New study outlines how narcissistic leaders 'infect' company culture

Bad leadership can drive employees away and deeply damage a company’s culture, according to a recent paper by Prof. Jennifer Chatman and colleagues at the Berkeley Haas School of Business.

It’s not the first study to outline the negative impacts of a toxic workplace. Past research has shown that near-sighted leadership can lead to employee burnout and elevated levels of stress. It can also create an environment where racism, sexism, and other forms of discrimination can flourish.

But removing a problematic executive may not make much of a difference. The paper argues that narcissistic leaders work “like carriers of a virus” and “infect” corporate culture, leaving lower levels of collaboration and diminished integrity “at all levels,” even after they are gone. Further compounding the problem is the fact that many organizations outwardly or inwardly reward and protect toxic behaviour from “high performers.”

In previous research, Chatman’s team found that narcissistic CEOs have a “dark side” that manifests slowly over time. They’re typically paid more than their non-narcissistic counterparts, largely due to a lack of empathy, and tend to steer their company toward more lawsuits.

The findings in the latest paper are the result of several experiments conducted by Chatman’s team on 1,862 participants, as well as a field study that included CEOs of major companies.

“Narcissistic leaders affect the core elements of organizations and their impact on society,” Chatman says in a statement.

“Companies organize because they can do something together that no individual could accomplish alone. When narcissistic leaders undermine collaboration, they by definition reduce the effectiveness of an organization. Without integrity, an organization risks its very survival.”

VIDEO: SIGNS OF A TOXIC WORK ENVIRONMENT

‘ORGANIZATIONAL CULTURE OUTLASTS ANY LEADER’

The negative impacts of a narcissistic leader are long-lasting, Chatman argues, because the leader creates a culture that allows employees to act less ethically and less collaboratively. Once the habit has formed, it can become ingrained.

“Organizational culture outlasts any leader,” Chatman says.

“Even after a leader is gone, the culture that has been cultivated has a life of its own.”

COMBATTING TOXIC LEADERSHIP

The paper suggests organizations put in place “special measures” to screen for toxic personality traits in the hiring process, but that’s where things become prickly.

For starters, there’s no standardized way to vet for narcissistic personality disorder in the interview process, meaning hiring managers will likely rely on arbitrary cues and unintentional (or intentional) biases, putting every candidate who is a minority at an even greater disadvantage.

And narcissistic personality types are known to circumvent these kinds of traps anyway, the paper admits.

Another way to rein in a toxic leader, Chatman says, is to tie executive compensation to peer reviews, but that only works if the company fosters an environment where employees can speak freely without fear of repercussions.

If organizations really want to curb the problem, they should consider diversifying their C-suites.

Research shows that hiring a diverse workforce can create a healthier environment. Evidence suggests that inclusive workplaces perform better and that supporting all minority groups — including people of colour, individuals with disabilities, and those from the LGBTQ+ community — can help a company’s bottom line, allow employers and schools to develop untapped talent, give institutions a competitive edge, and improve productivity.