Behind the economic impact of charisma Charisma seems like a mystical concept. However, social scientists now know how to model it and show how it can be a powerful motivational tool, encouraging staff to work in a more engaged manner. We spoke to Professor Christian Zehnder and Professor John Antonakis about their work in studying charisma scientifically and investigating its economic value. An
organisation’s
commercial
prospects depends on its staff, and financial incentives are an important motivational tool in encouraging people to work efficiently and effectively. However, charismatic leadership, a ‘softer’ means, can also help motivate people to work hard, a topic that Professor Christian Zehnder and Professor John Antonakis are addressing. “We thought it would be very interesting to combine my background in economics with John’s knowledge of leadership to examine the topic of charisma,” says Professor Zehnder. The aim here is to study charisma scientifically, although the concept itself is not easy to define. “Individuals are seen as charismatic for many reasons – disentangling these reasons, and finding specific verbal and non-verbal behavioural strategies used by charismatic leaders is what we are after,” outlines Professor Antonakis.
What is charisma? Professor Zehnder and Professor Antonakis conceptualise charisma as signalling information, as operationalized in 12 charismatic leadership tactics. “There are 9 verbal and 3 non-verbal tactics, that were clearly defined. With this definition, we can then scientifically study charisma by exogenously manipulating these tactics,” says Professor Zehnder. In a previous experiment, the two researchers together with their colleagues Roberto Weber (University of Zurich) and Giovanna d’Adda (University of Milan) investigated the impact of these 12 tactics on the behaviour of a group of temporary workers recruited to stuff donation envelopes for a hospital fundraiser. The workers were split into groups. “We had two treatments where we paid fixed wages. The key difference between these two groups was that one listened to only a standard motivational speech beforehand, while the other listened to a speech where the speaker employed charismatic tactics, such as using anecdotes, metaphors, and rhetorical questions. An additional, third treatment was that on top of the fixed payment, we also put incentive pay,” explains Professor Zehnder.
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This use of financial incentives is known to motivate people doing routine tasks to work harder, which provides an effective benchmark against which to investigate the impact of charisma. “We wanted to look at the impact of charisma, relative to a motivator that we know well, like incentives,” says Professor Zehnder. The two versions of the speech were delivered by the same actor, with the same content, but with differences in terms of style. “In one version, the speaker acted in a charismatic way according to the definition, while in the other he acted in a non-charismatic, though still reasonably effective way. We wanted to see whether this had an impact on the workers,” continues Professor Zehnder.
on practical outcomes, yet it is not clear whether the effects of charismatic tactics can be sustained over a long period in motivating workers. Although financial incentives tend to retain their power, a charismatic speech may not have the same impact if repeated to the same group, so a speaker may have to come up with entirely new material. “For some people that might be quite easy, but for others it might be much more difficult,” points out Professor Zehnder. Professor Antonakis adds that “the information content of the speech, and what it signals is costly; not just anyone can signal charisma well.” This is an area researchers plan to explore in future, while Professor Zehnder is also working on an experiment investigating
In one version of the speech, the speaker acted in a charismatic way according to the definition, while in the other they acted in a non-charismatic way. We wanted to see whether
this had an impact on the workers.
The results of this experiment were striking, with the researchers finding that the group who listened to the charismatic speech were significantly more productive than those that didn’t. Moreover, the motivating effect of charisma was comparable in size to that of financial incentives. Effective use of charismatic tactics can also have an impact in other arenas, for example politics, a topic of great interest to Professor Antonakis. “We have developed a model to predict who’s going to win the US presidency. We previously looked at the nomination speeches to the Republican and Democratic conventions in the US, and we have data on speeches of all the US presidential candidates, from 1916 to 2008,” he says. Whereas incumbency and the state of the economy are the most important factors in determining the outcome of the US presidential election, Professor Antonakis says that the charisma of a candidate can make the difference if economic signals are fuzzy. “Our model is pretty effective in explaining who wins,” he continues. The team’s findings provide further evidence that charisma can have a real impact
the impact of charisma in a different type of working environment. “We want to look at an environment in which incentives don’t work,” he says. “In the first experiment the working environment was very simple, and we didn’t find evidence for a quality/ quantity trade-off. It is well established that in those types of environments incentives are very powerful.”
example by folding and inserting a small origami heart, which takes time and attention. Although workers can save time by not doing the origami properly to earn a higher piecerate, doing so will reduce the quality of the materials and perhaps lead to reduced donations. Professor Zehnder plans to explore whether charismatic tactics are an effective motivator in this context. “If you use charisma to motivate people, you may be able to both increase the number of letters and also maintain quality,” he says. There are many situations where pure economic incentives are ineffective in motivating people to perform a particular task, but charisma can be used to make people feel good about what they’re doing and stimulate their intrinsic motivation. It will also be interesting to investigate the combination of financial incentives and charismatic tactics in those more complex environments. “It is important to know if charisma allows us to retain the motivating power of performance pay without creating negative side effects. If people do their work because it makes them feel good about who they are or who they wish to be, it helps reinforce their identity; thus, it is key to align the charismatic vision with the values and identity of followers so that they focus on the strategic goal of the leader, instead of lining their pockets by cheating,” explains Professor Antonakis. The wider context around Professor Zehnder and Professor Antonakis’s experiment involves helping children in a hospital, and although envelope-stuffing is by nature a mundane task, it can be made more meaningful by the use of charismatic tactics. In a speech to workers, the speaker uses charisma to
emphasise that doing this task well will help children have a better Christmas in hospital. “The point is that charisma can be harnessed by leaders to make workers incur a cost – to work harder, to work longer, expose oneself to more risk,” explains Professor Antonakis. Through this work, researchers hope to help explain the mechanisms behind the impact of charisma, while further experiments are planned. “Charisma not only affects an individual’s motivation to incur cost, but it can also affect what they believe others will do,” continues Professor Antonakis. “If a speaker is uninspiring, it’s unlikely to induce followers to coordinate their actions and likely make some followers free ride.” Take the military as an example where a battle cry is given to charge. A charismatic speech by an officer could inspire soldiers to move forward together, even though they may be putting themselves individually at greater risk. Why? Because the soldiers know they can count on others to charge at the same time. However, a placid speech would have no such effect; “nobody, or certainly fewer soliders, would charge, because they know that others may not charge either,” says Professor Antonakis. Researchers aim to explore the underlying basis of how to solve such coordination problems using a game theoretic experimental setup. The idea is to get players to entrust their endowment in a public fund; but doing so exposes the investors to a risk if others do not contribute too. “People will only contribute if everybody else puts money in too – they don’t want to be the only person putting in and everyone else free-riding,” points out Professor Antonakis. “Initial evidence shows that charismatic leaders can help solve such coordination problems.”
Quality/quantity trade-off The aim now is to look at situations in which incentives actually backfire, where incentivising workers to increase production has a negative impact on the quality of the product for example. One idea involves again stuffing envelopes addressed to potential donors for a fundraiser, but this time the task would be more complicated. “Workers will need to make sure the letter matches an address they’re given from a list, and they will also need to include some additional materials,” continues Professor Zehnder. In this setup the researchers are exploring how to make the task more difficult, for
EU Research
The Economic Value of Charismatic Leadership The Economic Value of Charismatic Leadership Project Objectives
Novel experimental research combines methods from economics and psychology to explore how leaders can use charisma to engage and motivate their followers. Initial results show that, in some settings, a charismatic speech can induce the same motivational boost as highpowered financial incentives.
Project Funding
Swiss National Science Foundation (Grant No. 100018_169793): “The Economic Value of Charismatic Leadership”.
Project Partners
• Giovanna d’Adda (Università degli Studi di Milano) • Roberto Weber (University of Zurich)
Contact Details
Project Coordinator, Professor Christian Zehnder Department of Organizational Behavior Université de Lausanne Quartier UNIL-Chamberonne Bâtiment Internef 1015 Lausanne T: +41 21 692 36 81 E: Christian.Zehnder@unil.ch W: http://www.hec.unil.ch/jantonakis/ charisma.htm Prof Christian Zehnder Prof. John Antonakis
Christian Zehnder (left) is Professor of Organizational Decision Making and Vice-Dean of the Faculty of Business and Economics (HEC) at the University of Lausanne. His research combines insights from Economics, Psychology and Management and builds on various methodological approaches, including laboratory experiments, field experiments and game theoretic models. John Antonakis (right) is Professor of Organizational Behavior in HEC at the University of Lausanne. John’s research is currently focused on charisma, predictors of leadership, social cognition, and research methods. He frequently consults and provides talks, training and workshops to private and public organizations on leadership and human resources issues.
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