Anyone who has watched a company go through a change of leadership is keenly aware of how strongly the personality of the chief executive can shape performance. Manfred F.R. Kets de Vries, the Raoul de Vitry d’Avaucourt Chaired Clinical Professor of Leadership Development at INSEAD business school, has built his career on studying this impact. Starting with his first major book, Power and the Corporate Mind: How to Use Rather Than Misuse Leadership (coauthored with influential management thinker Abraham Zaleznik; Houghton Mifflin, 1975), Kets de Vries has focused his attention, in this and more than 30 subsequent books, on the psychological realities that determine human and organizational behavior — or, as the title of his recent book calls them, Sex, Money, Happiness and Death: The Quest for Authenticity (Palgrave Macmillan, 2009).
Along the way, Kets de Vries has dedicated himself to leadership development: first for MBA students at INSEAD, and then for CEOs and other senior executives. With professor Elisabet Engellau, he founded INSEAD’s Global Leadership Center, which provides the core of the school’s leadership coaching programs. Unlike many other executive education programs, the center is explicitly dedicated to teaching decision makers to improve their performance by knowing themselves and acting on that knowledge more effectively.
Kets de Vries’s insights are particularly pertinent now, in the aftermath of economic crisis. He argues that although governance reforms may help shield companies (and the economy) from the destructive impulses of some decision makers, corporate failures and meltdowns are driven by deeply embedded attitudes. Those will not go away, no matter how strongly companies are regulated. One of the most prevalent influences is embedded narcissism: the profound self-centeredness of many high achievers, which is both a creative and a destructive force. Another is the willingness of everyone else to indulge that force.
In his 2006 book, The Leader on the Couch: A Clinical Approach to Changing People and Organizations (Wiley & Sons), Kets de Vries explains the “shadow side of leadership,” and how it keeps many companies from realizing their full potential. But he also defends corporate leaders who explicitly merge their own search for self-improvement with the improvement of their companies’ performance.
We are publishing this interview on the occasion of the 50th anniversary of INSEAD. With campuses in Fontainebleau (outside Paris), Singapore, and Abu Dhabi, it is an independent business school, not attached to a larger university, and one of the most prominent and innovative management learning institutions. (Many of the partners and staff members of Booz & Company, the firm that publishes strategy+business, are INSEAD alumni.) Kets de Vries met with strategy+business in his Paris apartment.
S+B: In The Leader on the Couch, you blame the struggles of many companies on their tolerance for narcissistic leaders. How serious a problem is this?
KETS de VRIES: The economic crisis was a reflection of narcissism and very primitive defense mechanisms (such as a complete denial of economic reality) built into the financial system. The best and brightest MBA students have been going into investment banking; many of them used their brains essentially to play casino games, and not to add much value to society.
Now, we’ve seen the result. Look at the least-admired professions in most countries over the years: telemarketers and used-car salesmen. Today, you have bankers and CEOs achieving the same low rating. Companies like Citibank — which was the brainchild of one of the most visibly narcissistic executives in the world, Sanford Weill — have essentially collapsed. They have grown too complex for the people who work there to understand. I strongly question what the different parts of Citibank have in common. No matter what kinds of regulatory reforms are initiated, more companies will collapse this way, because narcissism breeds this kind of unmanageable grandiosity.