A Surprising Trait for Successful Business Leadership

For many, the stereotypical way to think of CEO's these days centers on greed, self-centered egoism, and striving for power and prestige, no matter what the human costs. While this isn't accurate, I find that many of my students believe that it is and that such is the necessary cost of being successful in the world of business. But there is some evidence that humility plays a crucial role in successful business leadership.

In a study of the leadership of a particular kind of successful company—a “good to great” company—humility was found to play a significant role. In this study, 11 of the 1,435 companies that made the Fortune 500 between 1965 and 1995 were identified as being “good to great.” To qualify as “good to great,” a company had to follow a particular pattern:

1. Cumulative stock returns at or below those of the general market for 15 years; then
2. the occurrence of a transition point; followed by
3. returns of at least triple the market rate over the next 15 years.

If an entire industry followed this pattern, the company would be dropped from the study to rule out industry-wide success as a factor in particular company’s move from “good to great.” Humility was identified as an important characteristic of the CEO’s of each of these successful 11 companies. Leaders with this trait have many advantages that can lead to long-term success.

Humility is linked not only with a better quality of social relationships and being seen by others as well-adjusted and kind. It is also linked with many prosocial behaviors and traits including gratitude, forgiveness, and cooperation. So while self-centered arrogance and disregard for others may lead to some short-term success, it is quite plausible to think that humility in one's social relationships and approach to leadership is crucial for long-term success as a leader, not only in business, but in the rest of life as well.

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References:Jim Collins, “Level 5 Leadership: The Triumph of Humility and Fierce Resolve,” Harvard Business Review 79 (2001): 66-76. See also J.A. Morris, C.M. Brotheridge, and J.C. Urbanski, “Bringing Humility to Leadership: Antecedents and Consequences of Leader Humility,” Human Relations 58 (2005): 1323-1350; and Julie Exline and Peter Hill, “Humility: A Consistent and Robust Predictor of Generosity,” The Journal of Positive Psychology 7 (2012): 208-218.