PERSONALITY, LEADERSHIP, AND
ORGANIZATIONAL EFFECTIVENESS
Robert Hogan, Ph.D.
WHAT THIS TALK IS ABOUT
The quality of peoples’ lives depends
on their careers.
The quality of peoples’ careers depends
on their organizations.
The fate of their organizations depends
on their leadership.
Leadership depends on personality.
Personality, leadership, career success,
and organizational effectiveness are
linked.
Personality rules the world and Karl Marx was wrong.
HISTORICAL FOOTNOTE
In the 1970’s,
psychologists and
business schools
argued that
personality
doesn’t exist.
1970s
In the 1980’s,
psychologists and
business schools
argued that
leadership
doesn’t exist.
1980s
Today,
psychologists and
business schools
don’t discuss
organizational
effectiveness.
Today
WHY EFFECTIVE
ORGANIZATIONS MATTER
Life is about competition within and between
groups.
Psychologists focus on competition within groups.
But competition between groups drove human
evolution.
Group survival trumps individual survival.
What is good for the group is always good for the individual;
what is good for the individual may not be good for the
group —free riders.
WHY PERSONALITY MATTERS
And Who Cares?
People are
the most
dangerous
and
consequentia
l forces on
earth.
Personalit
y
psycholog
y concerns
the nature
of human
nature.
We ought
to take the
subject
seriously.
Social
psychologist
s (situational
explanation)
wiped out
the field.
WHAT IS PERSONALITY?
Universal Themes and Differences
Universal Themes:
How we are all alike
Individual Differences:
How we differ in consequential ways
DEFINING PERSONALITY:
Universal Themes
The fundamental problems in life concern
getting along and getting ahead —
developing relationships and developing
careers.
These problems exist in a state of
tension.
We resolve these problems during social interaction
—especially at work.
Personality is about individual differences in the ability
to get along and get ahead.
DEFINING PERSONALITY:
Individual Differences
Personality should be defined from two perspectives: Yours and Ours
Your perspective concerns your hopes,
dreams, fears, and values (Identity).
Our perspective concerns how we
evaluate you (Reputation).
Identity is the person you think you are.
Reputation is the person we think you are.
IDENTITY VS. REPUTATION
100 years
of research
on identity
has
produced
no results.
Hard to study,
no taxonomy,
no
generalizations,
no conclusions,
but irresistible.
20 years of
research
on
reputation
has been
highly
productive.
Easy to study,
Five-Factor
Model
taxonomy
base, lots of
generalization
s.
WHAT IS LEADERSHIP?
The leadership literature is immense but can be
separated into two broad traditions:
The Troubadour Tradition:
Unsupported opinions of business gurus and former
CEOs
The Academic Tradition:
Empirical conclusions from academic researchers
EVALUATING THE TWO TRADITIONS
The Troubadour Tradition is entertaining but misleading
The Academic Tradition doesn’t converge.
I think the academic study of leadership has failed:
1.
2.
3.
Wrong definition
No attention to subordinates
Ignores ROI of leadership
DEFINING & EVALUATING LEADERSHIP
Most writers define leadership in terms of who is in
charge. Why is this is a mistake?
Remember warfare and human evolution?
Leadership is best defined in terms of building and
maintaining high performing teams.
Leadership is best evaluated by the performance of
the teams compared to their competition.
DEFINING ORGANIZATIONAL
EFFECTIVENESS
•
Talented team members
(found using valid selection methods)
•
Good managers/coaches
(found using valid selection methods)
•
Engaged team members
(created by good management)
•
Effective competitive strategies
•
Monitoring systems
Senior leadership controls these elements of effectiveness.
WHAT IS LEADERSHIP?
Reviewing leadership from the perspective of group
effectiveness reveals six dependable conclusions:
1.
2.
3.
4.
5.
6.
Competency Models
Implicit Leadership Theory
Good to Great Themes
Personality predicts leadership
Leadership predicts business unit performance
The corporate elite is no race of heroes
COMPETENCY MODELS
All large organizations have competency models.
Every competency model has the same themes:
Intrapersonal Skills Interpersonal Skills
Integrity,
emotional
stability,
self-control
Building and
maintaining
relationships,
empathy,
humility
Business Skills
Leadership Skills
Analyzing
data,
allocating
resources,
forecasting
budgets,
executing
Vision,
empowering
staff, being a
good role
model
IMPLICIT LEADERSHIP THEMES
People evaluate leaders using four criteria:
1.Integrity: honor commitments, play fair, tell truth
2.Decisiveness: make good decisions quickly
3.Competence: be good at the business
4.Vision: explain why it matters
These dimensions of reputation are essential
components of any 360.
GOOD TO GREAT THEMES
Characteristics of CEOs of Fortune 1000 companies with
15 years sustained superior performance:
• Amazingly persistent
• Humble
Charismatic leadership is a myth.
PERSONALITY AND LEADERSHIP (I)
Modern research defines personality in terms of five
broad dimensions of reputation:
1. Adjustment – Poise and self-confidence
2. Ambition/Extraversion – Leader-like assertiveness
3. Agreeableness – Warmth and charm
4. Prudence – Integrity and
citizenship
5. Openness – Curiosity and vision
This is the Five-Factor Model (FFM).
PERSONALITY AND LEADERSHIP (II)
The leadership literature is immense but can be
separated into two broad traditions:
A major meta-analysis shows:
• 4 of the 5 dimensions of the FFM predict leadership
ratings independent of the organization or occupation
• Adjustment is the best predictor
• Agreeableness is the worst predictor
• Multiple R = .55
• The correlation for IQ was .23
PERSONALITY IS STRONGER THAN VIAGRA
Correlatino
(Pearson’s r)
Sample Size
Used
Coronary bypass surgery and survival
rate
Smoking and lung cancer within 25
years
Antihistamines and reduces phlegm
.08
2649
.08
3956
.11
1023
Effect of ibuprofen on pain reduction
.14
8488
Effect of Viagra on headaches and
flushing
Viagra and improved sexual functioning
.25
861
.38
779
Height and weight of U.S. adults
.44
16948
Procedure
LEADERSHIP AND BUSINESS
UNIT PERFORMANCE
A second important meta-analysis shows:
•Manager’s personality directly influences employee
engagement
•High engagement predicts positive business outcomes
•Low engagement predicts negative business outcomes
•The link between manager’s personality and business
unit performance is mediated by staff engagement
•People don’t quit organizations, they quit their
immediate bosses
Harter, Schmidt, & Hayes, 2002
MANAGEMENT AND CORPORATE
PROFITABILITY
•
Bloom and Van Reenen (2007) studied 732 manufacturing
companies in the US, UK, France, and Germany and 4000 in Asia
•
Companies using good management practices make more money
•
The best managed companies are multi-nationals; the worst are
owned by government or second generation family members
•
Good management came from the top
•
Bad managers cost money
THE CORPORATE ELITE IS
NO RACE OF HEROES
What is the base rate of bad managers in modern
business?
•
•
•
We estimate 50% to 75% of current managers are
incompetent
Bad managers are hired based on technical skill and
business knowledge, not on talent for leadership
Bad managers alienate employees and create
negative business outcomes
LEADERSHIP MATTERS
•
•
•
Personality predicts leadership, good or bad
Leadership predicts team performance, good or
bad
What are the mechanisms?
The next slide presents our model.
HOGAN LEADERSHIP VALUE CHAIN
Personality
Behavior
Values
Decisions
Structure and
Consideration
Rewards and
Sanctions
Staffing and
Strategy
Staff
Morale
Culture
Judgment
Engagement
Business Unit
Performance
LINKING PERSONALITY AND
ORGANIZATIONAL PERFORMANCE
Psychologists focus on leader behavior—the left
path.
Business schools focus on decision making—
strategy, staffing, and structure—the right path.
Few people study values—the middle path. But
values drive culture, and some cultures are more
functional than others.
Personality predicts all three paths.
DEFINING PERSONALITY:
Operational Themes
At the operational level, we think about
personality in terms of the bright side, the
dark side and the inside.
• The bright side describes people when they
are at their best.
• The dark side describes people when they are
being themselves.
• The inside concerns core values.
THE BRIGHT SIDE OF
PERSONALITY
Hogan Personality
Inventory
Adjustment
Calm, stable moods, steady under pressure
Ambition
Competitive, status seeking, initiative taking
Sociability
Talkative, outgoing, approachable
Interpersonal Sensitivity
Charming, responsive, warm and engaging
Prudence
Formal, diligent, conscientious, honest
Inquisitive
Curious, original, unconventional, creative
Learning Approach
Up to date, well read, coachable
THE DARK SIDE OF
PERSONALITY
Hogan Development Survey
Excitable
Erratic emotional outbursts
Stephen Jobs, Apple
Cautious
Risk averse, won’t make decisions
CIA & United Nations
Skeptical
Mistrustful and vindictive
Vladimir Putin
Reserved
Leisurely
Poor communicator, insensitive to morale
issues
Passive-Aggressive meanness
Stanley O’Neal, Merrill
Lynch
Information Technologists
Bold
Narcissistic feelings of entitlements
Bill Clinton
Mischievous
Careless about commitments, constant lying
Bernard Madow
Colorful
Manages by crisis to be center of attention
Ellison, Oracle
Imaginative
Bad ideas and decisions
Gerald Levin, Time-Warner
Diligent
Over-controlling micro-manager
Michael Eisner, Disney
Dutiful
Too concerned about pleasing superiors
George Tenet, CIA
THE INSIDE OF
PERSONALITY
Motives, Values, Preferences Inventory
Recognition
Attention and approval
Power
Success
Hedonism
Fun
Altruism
Service
Affiliation
Companionship
Tradition
Ritual and hierarchy
Security
Avoiding Risk
Commerce
Profits, money
Aesthetics
Quality
Science
Right answers
LAST THOUGHTS:
Leadership Is Not An HR Fad
Consider the 20th century.
•
•
•
•
•
How many people died in natural disasters?
Consider that in the 20th century 167 million
people were killed for political reasons.
Thirty million were killed by invading armies.
130 million were killed by their own
government.
Leadership is often a matter of life or death.
LAST THOUGHTS:
Leadership Matters
The personality of the CEO is the most important
determinant of profitability other than the industry
sector in which the company is embedded.
Well-run companies are significantly more
profitable than poorly-run companies.
Good management starts at the top.
When good leaders are in charge, everyone
wins.
When bad leaders are in charge, everyone
loses.
LAST THOUGHTS
The effectiveness of organizations (families,
schools, businesses, countries) drives the
well being of their members.
Leadership drives organizational
effectiveness.
Leadership is a function of personality.
All organizations have poor selection
systems, managers, business models, and
monitoring systems.
The best organizations make the fewest
mistakes.
Remember Thucydides.
THANK YOU
[email protected]
FREQUENTLY ASKED QUESTIONS
•
•
•
•
•
•
•
•
•
•
•
•
Does personality change over time?
Can leadership be learned or coached?
Are there any gender differences in leadership?
Should people just focus on their strengths?
Can anybody be a great leader?
What is the typical profile of a great leader?
Are politicians better leaders?
Should we select on charisma?
How important is IQ?
How important is EQ?
What defines good judgment for leadership?
How do we identify high potential individuals?