The narcissistic leader and his toxicity

This article sets out the clear stages of a narcissist’s rise within a corporation and the reasons the corporation collapses.

These traits can be traced both from inside a company and by watching it from the outside. Understanding certain nuances of the leader of a large corporation can help save investors billions of dollars in a crisis.

The psychology of narcissism.

The road to success.

A great many narcissists succeed in their careers, in business and especially in politics. Manfred Kets de Vries was one of the first to raise the problem of leadership and narcissism. In his later works he notes that his in-depth research shows most executives are driven by narcissism. American management experts have described narcissism as a “dark” leadership trait with some potentially “bright” sides. The impact of CEOs’ narcissism on the development of organisations was studied after the 2008 banking crisis in the United States, and a fairly clear pattern emerged: narcissists take more risks, but their organisations are least resilient in a crisis. The study covered ninety-two executives and found that organisations led by narcissistic leaders were less resilient to systemic shocks and crises. The press and experts named the greed and reckless behaviour of bank executives among the causes of the financial collapse. Added to this was poor corporate governance in the form of inflated executive pay and a lack of external monitoring. All of it mixed into a powerful toxic cocktail and led to a systemic shock and a global crisis (DeYoung et al., 2013).

To do so, he quite often leads his company into bankruptcy. A business is very vulnerable to a narcissistic leader, especially once he enters the toxic stage. I would note that it is the fear of living through shame — and of dying of that unbearable feeling — that can drive a narcissist to destroy all the fruits of his work. A narcissist has his own particular career path, which can be divided into five rough periods. This psychological type can be spotted as early as the interview or CV stage, and the potential risks to the organisation noted.

At the first stage, as soon as the narcissist joins an organisation, his task is to show off his abilities as much as possible.

This period lasts three years at most. To draw attention to himself, the narcissist uses every method available: a raised tone of voice, excessive gesturing, extensive networking, above all with the bosses and with those who make decisions. He is sure to take part in every company event and to take on projects through which he can promote himself. These projects must, in his view, be bound to succeed; if they fail, the blame is pinned on subordinates. There must be no defeats in a narcissist’s biography. He enters competitions only when everything goes by his rules. The aggressive and counterproductive behaviour of highly narcissistic people intensifies whenever their self-esteem is under threat.

The narcissist’s career.

At the second stage, once the first fruits have come in the form of a promotion, the narcissist turns to political games. Incompetence forces him to: he is not up to his position and can no longer compete by his old methods with colleagues at the same level. The main task of this stage is to form alliances and reach all kinds of verbal agreements with as many people as possible. Highly narcissistic employees are more likely to engage in counterproductive work behaviour that harms the organisation or their colleagues.

The third stage begins after a move to a new, more important position. But in the narcissist’s fantasy this is not the limit of his abilities. To go further, he must consolidate his position so as not to be toppled. The first thing the narcissist does is to clean up the history of his rise. All the subordinates who witnessed his career path are dismissed — especially those he relied on to climb. Rivals he cannot fire himself are fought through public discrediting and compromising material. Highly narcissistic employees are more inclined to see their colleagues’ behaviour as insulting and threatening. Then the narcissist forms a new team, first of all from those he can poach from his rivals. A strong team compensates for his fear of lacking personal competence. This stage is easy to spot with the naked eye, even from outside: he acquires the image of an outstanding leader who delegates everything. At the same stage, in order to move on, the narcissist reviews all his many agreements, which have become too burdensome and begin to contradict one another. To solve these problems, the search begins for a future partner who will run things.

The toxic narcissist.

The career collapse of a narcissistic leader.

At the fourth stage the narcissist finally reaches the top position or sets up his own business. There is nowhere left to grow within the organisation, and the struggle turns towards competitors. At this point there is a fork in the road. If the market doesn’t allow a war with outside competitors, the war begins inside the company itself. The narcissist secures his own growth by increasing the distance from his subordinates and staff. He needs to isolate himself from those around him: such a leader may be given a separate entrance to the building, a separate lift, a separate floor and several levels of security. At this stage the volume of communication and agreements becomes too burdensome, and the fear of exposure approaches its peak. It is at this moment that narcissists make a series of mistakes and take unlawful, punishable decisions — for example, falsifying financial information, fraud (Rijsenbilt et al., 2013), intimidation and compromising material. They try to manipulate politicians to achieve their own goals. The more narcissistic a corporation’s CEO, the riskier his investment strategies will be. The criteria for right decisions are erased; a kind of omnipotence takes over. All mistakes and shortcomings are pinned on subordinates, and more and more scapegoats are appointed. The leader becomes toxic to the organisation and those around him. Safe decisions are made only for himself. Other people’s interests, laws and external rules are ignored. Anyone who knows about the violations is driven out or destroyed: the toxic narcissist’s inner circle becomes the greatest threat to his existence.

The fifth stage is the narcissist’s downfall. Too many rules have been broken, and the chance of exposure is too great. There are two possible paths. In one, the narcissist destroys everything he has done and, if it is in his power, the whole organisation too — for example, by driving it into bankruptcy. In the other, if it is impossible to destroy everything right now, he leaves the organisation after bringing it to a state beyond rescue, taking only his closest people with him. The narcissist may defend himself with the argument: “I left, and that is why everything collapsed.” He will not take responsibility for what happened.

I would add that grandiose toxic narcissists do not go to psychologists or coaches; more often they try to teach everyone in the corporation how to live and work. Their main fear is being exposed. And it is their inner shame at their incompetence and the deep pain of inner emptiness that make them take risks and raise the stakes. If the market is more or less calm and allows risky manoeuvres, the business will grow. But as soon as a crisis begins, such leaders are the first to plunge into the abyss, taking the corporation, its employees and its investors with them.