Sponsored Article

Effective Leaders Need This Quality and it Isn’t Charisma

Charismatic leaders are great persuaders, but are they actually effective?
By: | October 1, 2018 • 5 min read

Much Ado About Charisma

We are instinctively drawn to charismatic people—the definition itself explains why: Charisma is a compelling attractiveness that inspires devotion from other people. It’s easy to understand, then, why we seek to work for charismatic leaders. They’re confident, charming and deliver messages with grand promise. And, until relatively recently, academic literature was rife with details on the effectiveness of charismatic leaders—for example, their success as transformational leaders. A transformational leader persuades other people to do what he or she wants them to do, which requires, among other things, charisma.

According to Ryne Sherman, chief science officer at Hogan Assessments, agency theory compels companies to find charismatic CEOs. Charismatic CEOs are flashy, love media attention and put forward big visions for the future. This artificially drives up stock prices and is very appealing to investors. But, Sherman says, there is no link between charismatic leaders and business success.

Sherman says that charisma can help a person land a leadership position and even help them move up the leadership chain, but “there’s little association between charisma and making the company more effective, more efficient and more profitable.”

The academic literature on leadership tends to focus on emergent leaders and people who are currently in top leadership roles, thereby using these leaders as the only examples of success and concluding that they must be effective.

According to, Sherman there’s an important factor that gets lost in the literature: Leadership emergence equals charisma, but leadership effectiveness to build and maintain a winning team or organization isn’t very closely connected to charisma.

“There’s a myth that the most effective leaders have charisma, and the data suggest that it isn’t true,” he says.

Rather, recent research, including Sherman’s, have found that the most effective leaders are those who have humility.

Humbleness is Underrated

Sherman mentions that an audit of Indeed.com job listings unearthed more than 200,000 jobs explicitly stating charisma as a core component applicants must possess, whereas humility was listed in fewer than 4,000 job requirements. Sherman says humility is one of the key characteristics related to leadership effectiveness and building and maintaining high-performing teams.

“We’re blinded by charisma and we tend to overlook humble people with great track records,” he says. “[Humble leaders] may come across as ‘rough around the edges’ and not as polished or charming as charismatic leaders, which means they’re not as likely to ‘sell us’ on a big message like charismatic leaders can.”

Sherman compares the differences between Jack Welch, former CEO of General Electric, and Darwin Smith, former CEO of Kimberly Clark, to highlight charisma and humility. Most people have heard of Welch and his endeavors at General Electric, but fewer know about Smith, whose successes, Sherman says, include greater market returns than GE, 3M, Coca-Cola and other large corporations. Despite the paper market floundering, with Smith at the helm, Kimberly Clark had four times greater returns than the market average.

But because Smith was a humble leader, the public wasn’t necessarily aware of who was in charge at Kimberly Clark, which, Sherman notes, is the only downside of such leaders. Unknown CEOs may have a harder time convincing investors to put money into the company or stock values increase at slower rates than they might with a charismatic leader, which is also unappealing to investors.

On the upside, humble leaders empower their teams to be successful, which, Sherman says, leads to less turnover and absenteeism and reduces counterproductive behaviors, such as sabotaging their team. Additionally, employees working for humble leaders are more engaged and don’t mind spending free time on work, which significantly increases an organization’s productivity.

Looking at charismatic leaders, there are fewer benefits than drawbacks. The first is the company will receive a lot of attention because, in a highly charismatic CEO’s mind, there’s no such thing as bad press. Other benefits include an organization’s marketability and increase in stock prices that come with big ideas and lots of attention.

Sherman warns that there are long-term consequences for companies led by highly charismatic leaders.

“Charismatic leaders are likely to overpromise because they think they can achieve anything,” he says. “When those achievements aren’t met, they blame other people until eventually they ruin the company or someone else comes in and removes them.”

He adds that the irony in finding a replacement is that the next leader will be another highly charismatic person because it’s whomever can sell the decision-makers on the next big vision for the company. And, when these leaders fail, they are carried away on golden parachutes while the company sinks. Employees lose their jobs and possibly their retirement accounts and investors lose their investments.

“You can be charismatic and effective, but the association between the two is zero,” says Sherman.

Based on his own research, Sherman identified the six characteristics of what makes a leader truly effective: integrity, competence, good decision-making skills, vision, humility and an “insatiable persistence to achieve … as a team.” Note, charisma is nowhere to be found.

What to Do About Charisma?

Sherman says it’s hard to avoid hiring or promoting highly charismatic leaders because they are great public performers who can easily win over any audience—including during an interview.

“It’s difficult to select leaders based on interviews because you’ll be blown away by charisma,” he says. “Instead, we think the optimal way to do it is through well-validated psychological assessments that put everyone on the same page and give you actual scores on charisma and humility.”

To highlight this point, Sherman points to research published in the Journal of Personality and Social Psychology, in which authors conducted three studies of 800 business leaders from around the globe and approximately 7,500 of their superiors, peers and direct reports. The goal was to determine how to identify highly charismatic leaders and whether they were actually effective. In the first study, the 800 leaders took the Hogan Development Survey, a personality-assessment tool developed by Hogan Assessments that uncovers the “dark side” of leaders. Researchers were particularly interested in how leaders scored on four personality tendencies: bold, colorful, mischievous and imaginative.

They found that more charismatic leaders scored high on those traits, which reflected their self-confidence, flair for the dramatic, eagerness to test limits and expansive visionary thinking. The authors validated these characteristics as effective measures of charisma with a sample population of leaders and their direct reports, finding that highly charismatic leaders were also viewed as charismatic among their direct reports.

Further research revealed that, as charisma increased, so did perceived leadership effectiveness, but only until charisma reached the 60th percentile—any higher and perceived effectiveness decreases. One explanation is costs—highly charismatic leaders are strategically ambitious but fail at managing the day-to-day operations and don’t follow a methodical approach to complete tasks. Rather, they think to the future and ignore what must get done to implement change.

Sherman says once these leaders are identified, getting them to change their charismatic ways is difficult, but not impossible, if leaders get the right coaching. But, he notes, it’s best to begin coaching these leaders before they’re promoted into the C-suite.

“Don’t promote highly charismatic leaders to CEO and then coach them. Identify the potential of the leader and assess them to find their strong points and weak points and start working on those,” he says.

The key to developing great leaders is helping them identify their weaknesses and eliminating them. While the identified weakness may never be someone’s strongest area, it will no longer be their weakest either, thus vastly improving leadership effectiveness, he adds.