Research: Why CEOs Shouldn’t Take All the Credit

As a CEO, it’s only natural to want to take credit for unexpected positive outcomes — especially if your compensation is tied to self-reported updates on company performance. But in a recent study, the authors find a hidden cost to taking credit for success. Their analysis of 23,000 media articles about more than 350 CEOs showed that when CEOs credit their strategic decisions for unexpected positive earnings, they are more likely to be blamed for negative results in the future (and more likely to be fired as a result). Conversely, when leaders are humble and take less credit for positive outcomes, they are less likely to be blamed or removed from their positions when earnings fall. In light of these findings, the authors argue that CEOs should take a long-term approach to impression management by erring on the side of humility when times are good, so they’ll be less likely to be blamed if and when the tides inevitably turn.