When Charismatic CEOs Are an Asset — and When They’re a Liability

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Starting in the 1980s, a generation of larger-than-life CEOs became full-blown celebrity, but over time, research suggested that charismatic CEOs tended to have drawbacks at leaders. However, charisma can be especially useful in two business concepts with big unknowns: entrepreneurial startups and corporate turnarounds. In these settings, when everyone — investors, employees, customers, suppliers — is dealing with enormous uncertainties, a leader’s charisma can give people the faith necessary to take risks.

In my role as a professor of leadership at Harvard Business School, I often taught a case exploring how Jack Welch led General Electric during the 1980s and 1990s — and on nearly a dozen occasions in the 1990s and early 2000s, he attended and participated in the discussion.

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