The researchers describe discontinuous technologies as “contradicting the prevailing mindset in an industry, rendering existing organizational structures and processes obsolete, and diminishing the value of existing knowledge.” As such, existing firms are often seen as resistant, based on the risk and the high level of resources that would be needed for implementation.
But not all existing firms eschew adoption of these technologies, according to the researchers. Their study shows that CEOs with narcissistic personalities are more likely to take the associated risks. The researchers examined investments in biotechnology made by large pharmaceutical firms from 1980 to 2008 and found considerable support for their hypothesis.
Narcissism, as a personality dimension on which everyone can be arrayed, refers to traits such as a “strong sense of superiority,” a drive to “dominate their environments,” a “high degree of restlessness,” a “lack of empathy” and a “strong need for attention and applause,” the researchers wrote.
CEOs who exhibit more narcissistic traits, then, are seen as more likely to adopt discontinuous technologies for several reasons. Their sense of superiority gives them the confidence to take big risks. Their tendency toward restlessness makes them more open to change — even the radical sort that discontinuous technologies can bring. And they lean toward more dramatic decision-making with the understanding that their bold moves will garner attention among peers and in the press.
To this, researchers add two moderating factors: audience engagement — “the degree to which observers view a domain … as noteworthy and provocative” — and managerial attention — the level of focus that a firm’s senior managers place on a certain phenomenon.
“Bearing in mind that audience enthrallment with a technology can ebb and flow, and envisioning that managerial attention to a technology can similarly rise and fall, we anticipate that the narcissistic CEO will press for more attention at those times when a respected audience considers the technology as provocative and noteworthy,” wrote the researchers.
“CEO Narcissism, Audience Engagement, and Organizational Adoption of Technological Discontinuities” appears in the June 2013 issue of Administrative Science Quarterly. In addition to Hambrick, who is Smeal Chaired Professor of Management, authors include Wolf-Christian Gerstner and Andreas Konig of the University of Erlangen-Nuremberg, and Albrecht Enders of IMD International.
Donald Hambrick is the Smeal Chaired Professor of Management and an Evan Pugh Professor in the Smeal College of Business.