Study: Companies With Humble CEOs Perform Better

Not only is it more pleasant to work for humble CEOs, but research has found that a healthy dose of humility could also yield higher financial returns.

A study conducted by the National University of Singapore (NUS) and Arizona State University determined that a company’s financial performance improves with better decision-making. This is pretty obvious, but what’s interesting is how a CEO’s humbleness impacts these decisions.

The study found that more grounded CEOs encourage others to participate in decision-making and eliminate destructive self-interest and politics. They are more committed to achieving shared goals, as opposed to goals that only benefit the person at the top.

This creates “a more balanced division of executive labour,” which in turn improves motivation across the top layer of management all the way down to the lower rung of workers. It also results in a lower pay disparity between CEO and management/employees; obviously a company’s financial returns are boosted when its CEO doesn’t take home $156 million in salary.

Finally, more cooperative atmospheres spur companies to execute more efficiently in the present and plan more judiciously for the future.

“Our study suggests that humility should not be overlooked in executive selection and training, particularly for firms operating in highly dynamic industries,” the researchers wrote. “Firms that face uncertainty or crises often turn to celebrity or superstar CEOs, thus forgetting that those CEOs are sometimes part of the problem.”

A big part of the problem.

Now, there are some limitations here. The study considered small and medium enterprises of under US$5 million in revenue and less than 500 employees, so it may be accurate to assume the big fish need equally big heads. Snapchat CEO Evan Spiegel comes to mind.

It’s also very possible that CEOs ditch their humble attitude once they start rolling in cash and hire thousands of people, but that’s just a theory.

But for now, staying small and staying humble seem to lead to big things.