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Study: Humble CEOs Good for Business

Forget the stereotypes of arrogant, macho leaders who don’t care about anyone else’s opinion. A new study from the W. P. Carey School of Business at Arizona State University shows humble CEOs significantly benefit a company and its management — likely more than the blowhards who think it’s their way or the highway.

“Humble CEOs are more open to making joint decisions and empowering others,” says Professor Angelo Kinicki of the W. P. Carey School of Business, one of the study authors. “Their behavior positively affects both top and middle managers, who then exhibit higher commitment, work engagement, job satisfaction and job performance. We see a trickle-down effect that seems to influence the company overall.”

The new research published in Administrative Science Quarterly comes from Kinicki, Anne Tsui and David Waldman of the W. P. Carey School of Business, as well Amy Ou of the National University of Singapore, Zhixing Xiao of George Washington University, and Lynda Jiwen Song of the Renmin University of China.

They interviewed the CEOs of 63 private companies in China. They also created and administered surveys measuring humility and its effects to about 1,000 top- and middle-level managers who work with those CEOs. The researchers specifically chose China because they needed a context in which CEOs would display a wide variety of humility levels. However, they believe the findings will generalize to many companies in the United States.

“Our study suggests the ‘secret sauce’ of great, humble managers,” explains Kinicki. “They are more willing to seek feedback about themselves, more empathetic and appreciative of others’ strengths and weaknesses, and more focused on the greater good and others’ welfare than on themselves.”

Kinicki says leadership behavior normally cascades downward, so it’s likely humility at the top effects just about everyone at a company. He points out a few examples of humble CEOs making news:

* Tony Hsieh of Zappos is a Harvard graduate, who helped boost his company to more than $1 billion in gross merchandise sales annually. He also helped drive Zappos onto Fortune’s “100 Best Companies to Work For” list, with innovative customer- and employee-pleasing policies, such as “The Offer,” where new employees are offered one-month’s salary to leave the company if they’re not dedicated and happy.

* John Mackey of Whole Foods has shown concern for the greater good through his advocacy of organic food and spearheading his company’s move to become the first grocery-store chain to set standards for humane animal treatment. He also announced in 2006 that he was chopping his salary to $1, putting caps on executive pay, and setting up a $100,000 emergency fund for staff facing personal problems.

* Mary Barra of General Motors has faced severe criticism for problems created at the company before she took the helm in January. However, she has been quick to apologize and maintain that she’s moving from a “cost culture” to a “customer culture” at GM. She has promised to do “the right thing” for those affected by recent recalls and the problems that led to them.

Kinicki knows some people may be surprised by the study results, but he summarizes, “It’s time we understood that humility isn’t a sign of weakness or lacking confidence, but rather, a good thing that can benefit us all.”

The full study is available at http://asq.sagepub.com/content/59/1/34.full.pdf+html.