Narcissistic and Workaholic Leaders Guide Young Firms to Success
Scientists at HSE University—St. Petersburg studied how the founder's personal characteristics impact a young firm's performance. It turns out that a narcissist and workaholic who also fosters innovation will effectively grow their company. The paper has been published in IEEE Transactions on Engineering Management.
Companies in the early stages of development are highly dependent on their founders, making the leader's personal characteristics crucial in either enhancing or undermining the firm's performance. Scientists of the Strategic Entrepreneurship Centre at HSE University—St. Petersburg and students of the St. Petersburg School of Economics and Management studied the impact of founders' workaholism and narcissism on the performance of young companies. Additionally, they examined the effect of innovation on the firm's results. This study is part of a project aimed at investigating student entrepreneurship and identifying factors that encourage proactive behaviour in young people. The project was implemented with support from the HSE Basic Research Programme.
Galina Shirokova
'It is believed that business model innovation is not relevant to a young firm that has only recently developed its business model. Research on this topic is scarce and primarily focuses on established companies. We hypothesized that in our evolving market, young firms must actively adapt to the constantly changing environment, so the introduction of innovation can positively impact their performance,' according to Galina Shirokova, Director of the Strategic Entrepreneurship Centre.
To test the study's hypotheses, the researchers used Russian data from the 2021 Global University Entrepreneurial Spirit Students' Survey (GUESSS). The survey aims to assess students' entrepreneurial intentions and activities, along with the key factors influencing them. Data from GUESSS is extensively used by business and management scholars around the world.
The Russian researchers focused on the leaders of young firms that have been in the market for 2 to 10 years. The final sample comprised 205 students—founders of firms, most of which were small, with an average staff of four people. Among them, 18.05% were involved in trade, 14.63% in education and training, and 13.17% in advertising and marketing. The average age of respondents was 22 years. The majority of respondents—77.7%—were enrolled in bachelor's programmes, with 33.17% pursuing education in business and management.
Selected participants completed an online questionnaire in which most responses were measured on a Likert scale, assessing the degree of agreement or disagreement with each statement, ranging from 'strongly agree' to 'strongly disagree.' Thus, respondents assessed the company's sales, market share, and profit growth relative to key competitors using a 7-point scale, where 1 represented 'very poor' and 7 represented 'very good.'
When measuring business model innovation, respondents were first prompted with the phrase: 'Indicate your level of agreement with the following statement about your company over the past three years (1 - strongly disagree, 7 - strongly agree).' The questions addressed changes in core competencies, revenue mechanisms, and target customers.
In a questionnaire used to assess workaholism, participants indicated their level of agreement with various statements, such as: 'It’s important for me to work hard even when I don’t enjoy what I’m doing'. When assessing narcissism, respondents indicated how true statements such as 'I tend to seek prestige or status' were for them. A 7-point Likert scale was also used, where 1 represented 'strongly disagree' and 7 represented 'strongly agree.'
After analysing the data, the researchers concluded that there was a positive relationship between business model innovation and young firm performance. This finding supports the resource-based view of firms, which suggests that organisations can achieve a competitive advantage through the development of unique resources and capabilities, including innovations.
At the same time, the workaholism and narcissism of the founder have a reinforcing effect on the positive impact of business model innovation on the young firm performance. These research findings align with the theory of strategic leadership, which states that leaders with a clear vision for their company's development foster innovation and inspire employees to work productively.
'This is an important practical insight for potential investors: a narcissistic and workaholic leader can guide a young firm to success. The key is not to be afraid to innovate and continuously seek unconventional solutions to establish your position in the market,' Galina Shirokova stressed.
The paper was prepared within the framework of the Strategic Project 'Success and Self-Sustainability of the Individual in a Changing World', 'Autonomy and Proactive Behaviour' subproject, implemented as part of the 'Priority 2030' programme.
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