Being a charismatic leader is not the same as being a good manager or CEO.
- The list of great charismatic CEOs is long, with brilliant minds like Steve Jobs and Elon Musk, as equally long as the list of people who would go on to be known as renowned swindlers like Sam Bankman-Fried and Elizabeth Holmes.
- As Harvard Business School Professor Raffaella Sadun writes in the Harvard Business Review, “These stories have something in common. Each combines unique and flashy leadership styles with an egregious disregard for actual management practices.”
- The key to go management is more mundane and requires protocols and skills that charisma doesn’t offer. As Sadun says, “boring management matters.”
- The “Superhero Theory of Leadership,” which suggests that a brilliant charismatic CEO is what drives a successful company, fails to understand that a leader needs to be able to bring the best out of others—not merely driving the company through their own vision.
Why It’s Important
Visionary leaders can provide much intelligence and vision to a company’s mission, but they are not solely responsible for its success. Adherence to the “Superhero” method can create chaotic results. The world saw two prominent examples of this in November with the simultaneous collapse of the crypto exchange FTX and Elon Musk’s chaotic takeover of Twitter, which has indirectly resulted in the billionaire losing $200 billion of his net worth.
FTX collapsed because of a total failure in responsible leadership, despite its founder’s noted desire to be the public approachable face of cryptocurrency. The result is that millions of people lost their money, which is currently tied up in bankruptcy negotiations or lost altogether.
“The Twitter saga is even more intriguing, punctuated by Musk’s constant tweets, product launches, and retractions, massive layoffs and then rehiring, and a ban on remote work retracted within one day. This is again a story of a CEO who proudly shows a complete disregard for the basics of management and an almost unlimited faith in the magic effects of his leadership and intellect,” says Sadun.
Musk is still a highly successful and respected visionary who continues to push companies like Tesla, SpaceX, and Neuralink into cutting-edge industries, defining the future of electric vehicles, space exploration, and the internet. Even so, his leadership at Twitter has worried investors and business partners, who remain fearful that the visionary leader is too busy salvaging his investment in social media to make Tesla profitable or to deliver SpaceX’s promised Starship launch.
The reality is that boring management is superior to vision. People are attracted to charismatic leaders, and investors and customers are predisposed to trusting them because of their ability to control people and guide their vision. But these are not the same thing as leadership skills.
“What is good management? There’s no single, comprehensive answer. But in our research we focus on three facets: target-setting, incentives, and monitoring. Well-managed companies set reasonable, strategic goals; set their staff up to contribute to them; and measure their progress. Call it boring if you like—I call it good business,” says Sadun.