Feedback-seeking CEOs boost firm performance
For chief executive officers who want to boost their company's bottom line, it pays to be humble. In fact, something as simple as seeking feedback from those who work closely with the CEO has important payoffs.
New research indicates that a CEO who asks for feedback on his or her performance from top managers can improve the executive team's confidence and, through that confidence boost, can affect firm performance positively. It also shows that such seeking may be a useful substitute for more heroic forms of leadership such as articulating a vision and bringing it to the group.
"We provide the first evidence that seeking feedback from top management team members is an important avenue through which CEOs can strengthen the team and improve firm performance," said Sue Ashford, professor of management and organizations at U-M's Ross School of Business.
Ashford and colleagues developed and tested a conceptual model to explore the effects of more and less humble behaviors when they are enacted at the top of the organizational hierarchy and analyzed responses from CEOs and top managers from 65 firms.
"Feedback seeking is a strategy for leadership available to those who might feel less confident to determine and then articulate a vision for the firm," she said. "Our findings highlight feedback seeking as a humble means through which CEOs might enhance firm performance."
They found that CEOs impacted the top management team's confidence either by clarifying a vision for the firm or by seeking feedback on their behavior and approaches to managing. Both were effective. However, for some CEOs and other leaders, being visionary is not a comfortable style.
Given that, this study's finding that CEOs who are not perceived as articulating a clear vision can achieve the same success as more charismatic, articulate CEOs as long as they are frequently seeking feedback from their top managers is important. In contrast, the benefits of feedback seeking are less pronounced for CEOs who are described as articulating a vision.
"Although more research is needed, this finding raises the possibility that CEOs may be better served to employ either a more or less humble leadership style, rather than blending elements of these styles," Ashford said.