S+B: Is that what you mean by narcissism? Grandiosity?
KETS de VRIES: Not exactly. Narcissism is a clinically recognized disorder. In an oversimplified way, it can be viewed as a pathological reaction to problems concerning self-worth. It manifests itself in the need to prove to yourself that you are special, and entitled to special treatment. Other indicators include a need for constant attention and admiration, selfishness, a lack of empathy, the exploitation of others, and enviousness.
Narcissistic people may evade rules and regulations; their attitude is that these apply only to others. They may throw tantrums when they don’t get their way. Their outbursts of rage can be phenomenal. But some of their behavior can be interpreted by others as quite charismatic. And thus they often rise to lead large organizations and put a strong stamp on them.
Keep in mind that narcissism in itself isn’t a bad thing; it’s part of our makeup. It may have received a bad reputation because of the Greek myth of Narcissus, the youth who fell in love with his reflection. But in moderation, the condition is natural and even necessary. It contributes to assertiveness, self-confidence, and creativity. These are all very desirable qualities for business leaders. People who achieve things — who write books, who run companies, who oversee projects — have to be somewhat narcissistic, or they wouldn’t be motivated to excellence. Some of our most gifted leaders have evident narcissism. John Harvey-Jones, for instance, the head of Imperial Chemical Industries [ICI] during the 1980s and host of a BBC television show called Troubleshooter in the 1990s, was a charismatic individual, with wild eyes, wild ties, and wild hair. He was also a consummate, constructive narcissist.
But narcissistic people in elevated positions can be destructive. When they reach the highest echelons, given their need for positive mirroring, those who work for them start to tell them what they want to hear. They lose their sense of reality. And then their narcissism needs to be harnessed.
S+B: What kinds of situations are you thinking of?
KETS de VRIES: You see it in many mergers and acquisitions. The chief executive, who is often somewhat narcissistic, gets a bit anxious or bored. Then a consulting firm comes in and says, “Listen, if you don’t take over this other company, there may be a good chance that you will be taken over yourself.” Investment bankers enter into the fray, and suddenly there’s a deal to be made. Everyone is excited. The boredom is gone. They all wave the flag of synergy while talking about the marvelous things that are going to happen due to the merger or acquisition. Of course, synergy is really a disguise for saying that they are going to cut jobs.
We know from looking at a wide range of research findings that approximately 70 percent of corporate mergers and acquisitions don’t add shareholder value. That being the case, why then do some of them happen? Usually one ingredient for successful closure is that the two companies have CEOs of different ages. The younger one comes in to run both companies, and the older one goes out with a big golden handshake. It tells you something about the influence of self-interest.
What’s more, the consultants and investment bankers don’t suffer financially. The shareholders and senior executives get a bit of money. But eventually, the expected lovefest turns sour. Value is destroyed; lives are ruined. Large numbers of employees feel alienated. And the most capable employees may leave.
I wrote about some examples in The Leader on the Couch. There is the story, for example, of Jean-Marie Messier, who was the CEO of Vivendi Universal until he was ousted in disgrace in 2002. In his glory days he went by the name “J6M” [pronounced jeeseezem], which stood for “Jean-Marie Messier: moi-même, maître du monde.” This roughly translates to “myself, master of the world.”