What Personality Type Makes a Better CEO During Difficult Times?

What Personality Type Makes a Better CEO During Difficult Times?

Is it the brash type or the modest, the pretentious or unpretentious, reserved, or charismatic, introverted or extroverted, Alpha or Omega? Most business leaders are blend of extroversion and introversion. Both personality types are effective leaders depending on the circumstances.

The hard-charging extrovert looks for big wins and often succeeds. But they may also experience big losses due to excessive risk.

The more reserved Omega is focused on the present. They take a systematic approach to business management and everyone in the company knows their roles and responsibilities.

Difficult Times

What do we mean by difficult times? Let’s have a look at what a typical CEO must deal with daily in today’s global marketplace. War, strife, migrant crises, terrorism, fiscal deficits, the renewal of the Cold War are just some of the external stakeholders a global manager must deal with along the supply chain. At the same time, they must deal with internal stakeholder issues on the domestic front dealing with employees, unions, shareholders, political leaders, and leading the executive team.

CEO’s need to keep their finger on the pulse of its domestic AND global interests simultaneously as the global supply chain network expands. This is a new phenomenon for many executives. They spend more time putting out fires rather than implementing long-term strategy. In fact, according to a recent study 78% of executives say they would “take actions to improve quarterly earnings at the expense of long-term value creation.”

If a company doesn’t plan for long-term value; they’ll experience ongoing crises and uncertainty due to inadequate planning or implementation. They’ll constantly be chasing quarterly numbers to meet their targets forsaking long-term value creation.

Two Primary Personality Types

Alpha Leadership

We’ve all experienced the type-A personality or Alpha. They’re easy to spot due to their high energy, visionary talent, authoritarianism, appetite for risk, and extroversion. Alphas as CEO’s can be big asset to a company during large-scale transformations and aggressive sales campaigns. But there can be a downside to the extroverted personality. They tend to have big egos and the aforementioned appetite for risk. Sometimes excessively so, resulting in big losses.

While charisma is a valued character trait for most executive positions, narcissism is not. Narcissistic leaders tend to be visionary but are also inclined to abuse power and manipulate their employees. According to research by Robert Kelley, who wrote the book “The Power of Followership,” almost 40 percent of leaders “have ‘ego’ problems — are threatened by talented subordinates, have a need to act superior, and do not share the limelight.”

Alpha leaders love competition and are masters of corporate politics. They thoroughly enjoy the game of business and are always looking to gain an edge. Alphas are primarily concerned with image and results, respectively. They carefully cultivate their corporate image depending on the circumstances and enjoy the visibility that comes with it. They are less collaborative, tending to keep information private from executives and employees.

This is not to say that the charismatic, narcissistic executive is not an effective leader; they can be. They can be effective as change agents using their energy to motivate staff and drive results. But once the change process is complete, the authoritarian personality can negatively affect staff morale often resulting in talent leaving the company.

To be successful in the long term, Alphas need to surround themselves with trusted advisers such as Omega personalities.

Omega Leadership

The Type-B personality or Omega is more restrained. Like the alpha, they are highly energetic and persistent in achieving their goals. These leaders are often open to suggestion, admit their own mistakes, rarely boast about their successes, spotlight employee strengths, and give credit where credit is due.

The humble leader is more likely to take a variety of factors into consideration when making decisions, not just for profit, but for long-term value. They tend to see the company as part of their family and delegate responsibility throughout the organization.

This is not to say that the Omega leader is not charismatic, they can be. They are also humble and relate to employees equally. Omegas enjoy networking and creating mutual business relations. They can be equally visionary to the Alphas, but the vision is based on mission-oriented goals and long-term value rather than big wins. Because they are humble they tend to be better at developing talent on the executive team and throughout the organization.

Good to Great: Why Some Companies Make the Leap… And Others Don’t

In his book “Good to Great: Why Some Companies Make the Leap… And Others Don’t”, Jim Collins educates us on how to “turn a good organization into one that produces sustained great results. To make that final shift requires core values and a purpose beyond just making money.”

He teaches the timeless principles that have been used in every era by history’s best corporate leaders. During his research he found that:

“Greatness is not a function of circumstance. Greatness, it turns out, is largely a matter of conscious choice. No matter how dramatic the end result, the good-to-great transformations never happened in one fell swoop. There is no single defining action, no grant program, no one killer innovation, no solitary lucky break, no miracle moment. Rather, the process resembled relentlessly pushing a giant heavy flywheel in one direction, turn upon turn, building momentum until a point of breakthrough.”

Collins describes that the best executives have “a unique combination of personal humility and intense professional will.”

Further, Collins found that:

• 90% of Good-to-Great CEOs were promoted from within the company.
• Good-to-great CEOs were self-effacing, slightly introverted, and reserved.
• Parachuting big personalities from outside the company is negatively correlated with taking a company from good to great.
• Executive compensation is not a key driver in corporate performance.
• They achieved revolutionary results in a rather ordinary manner.
• Companies going from good to great did not spend more time on strategic planning than the control companies.
• They focused on what to do to become great, but also at what to discard.
• They surround themselves with the right people, purge the wrong people, and then decide on a vision and strategy.

Moreover, in a study of 105 small- to medium-size companies in the tech industry, researchers found the top management collaborated and shared information throughout the organization when a more humble CEO is at the helm thereby making the most of the company’s talent.

According to the study authors, “building on upper echelons, power, and paradox theories, we hypothesize that when a more humble CEO leads a firm, its top management team is more likely to collaborate, share information, jointly make decisions, and possess a shared vision.”

Managing for the Long-Term is Profitable

Investor Warren Buffet is a good example of a humble leader. He also invests in blue chip stocks that provide consistent, long-term results. Berkshire Hathaway was trading at US$247,340 at the time of publication and is the 4th largest public company in the world.

So, why then are we attracted to the 40% of celebrity CEO’s who Robert Kelley describes as having “ego problems?” Why not hire Warren Buffet types who provide consistent, long-term value?

In times of uncertainty, we tend to look for charismatic leaders who will ‘liberate’ us and lessen our anxiety. We look for leaders who can effectively communicate grand visions for the company. We often don’t stop to consider whether the vision is attainable, but that for a few years, we have a leader we can believe in.

If the plan is feasible and ripe for a big win, then choose the Alpha to lead the charge. But in times of uncertainty, I’d opt for the Omega man or woman to steer the ship through rough seas.

Author Bio

Russell Richer has 15 years of experience as a B2B copywriter. A former 17-year corporate accountant, I specialize in promoting B2B products, software, SaaS, and services related to sustainable manufacturing, industrial contracting, supply chain, environmental health & safety, and business process automation. Contact Russ @ richer-communications.com.