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You are at:Home»Blog»My Gray Rhino»On Narcissism and Risk Taking
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Photo 113503360 / Narcissist © Prazis | Dreamstime.com

On Narcissism and Risk Taking

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By Michele Wucker on March 9, 2022 My Gray Rhino

The psychological profile and state of mind of Vladimir Putin have been on many people’s minds lately, for obvious reasons. One word that has come up repeatedly is “narcissist,” which perhaps not coincidentally also has been applied to at least one American politician.

It is, of course, impossible to diagnose narcissistic personality disorder from a distance, even with the right training and credentials. But that hasn’t stopped countless pundits and politicians from calling Putin a narcissist, at least in the more general sense of the word: someone whose extreme self-involvement –often rooted in a defensive personality—prevents them from seeing the needs of others. From an armchair-psychology perspective, personal history, words, and behaviors certainly would support such a diagnosis, at least.

Shortly after Russia’s annexation of Crimea in 2014, the psychologist and narcissism expert Joseph Burgo wrote for The Atlantic that while some evidence (bare-chested horse riding, perhaps?) fits with a narcissism narrative, alternative explanations for Putin’s behaviors also could apply. “Putin may or may not be a clinical narcissist, but it may be wise just to treat him like one either way,” Burgo wrote.

What does treating a leader –whether a president or a CEO– like a narcissist mean? Specifically, how does narcissism affect risk and decision-making dynamics? You may be surprised to find that some of the answers are useful for relationships with non-narcissists as well.

Key Insights into Narcissism

Some research suggests that narcissistic CEOs, who have an inflated self-view and seek to have that self-view continuously reinforced, tend to take bold and risky actions to attract attention and admiration. Though these CEO narcissists tend to deliver extreme performance outcomes, those can be positive or negative, so it’s hard to demonstrate that they produce better or worse outcomes over time.

And, in fact, good leaders need at least some narcissistic qualities to take the “good” risks that lead to innovation and success. But the most successful leaders also possess non-narcissistic tendencies, like preserving stability and seeking wider inputs. In other words, all good things in moderation.

The literature on narcissism details several typical personality traits. Narcissists seek attention and association with high-status individuals. They tend not to accept responsibility for their failures, and instead blame it on others. They have an overly positive conception of themselves, which may hide an underlying feeling of worthlessness. They are more likely to show charisma but less likely to show or need warmth or intimacy. They tend to seek dominance and to exploit others for personal gain. They also may both believe they have more control than they really do and seek additional control.

Narcissists also may be likely to surround themselves with people who reflect their own world view. This can blind them to risks because of group social pressures to avoid disagreeing or offering alternative information.

The Narcissism-Risk Nexus

Studies focused on the connections between narcissism and risk taking like gambling, financial investment, substance abuse, dangerous driving, and sensation seeking (including promiscuity and binge shopping) have suggested that people with narcissistic personality traits are more risk-seeking than the general population. Though there is some debate over whether or not narcissists perceive certain risks as being lower than do non-narcissists, it does seem clear that narcissists perceive the potential benefit to be much more likely to justify the possible downside.

Because people have different risk tolerances in different parts of their lives, risk choices like the ones above may or may not extend to certain leadership behaviors. However, there is evidence that risky personal behaviors –speeding, drunk driving, cheating on spouse, or domestic violence– can correlate with professional decisions. (I discuss some of these tendencies in my most recent book, You Are What You Risk: The New Art and Science of Navigating an Uncertain World.)

I find two characteristics of narcissistic risk-takers to be particularly interesting: the kind of risks that attract them, and their often over-optimistic assessment of the probability of success. (Many observers have noted the latter in the context of the Ukraine invasion.)

A Preference for Rare and Impactful Bets

Narcissists are especially prone to accepting high-risk, high-reward bets –ie low probability, high value bets– over high probability, low value wagers—a team of psychologists concluded in a study of gambling in their widely cited 2008 Journal of Behavioral Decision Making article. They tied narcissism to overconfidence and its effects on risk taking, as well as a narrow focus on reward rather than on risk.

“The results suggest that narcissists appreciate the risks associated with risky behaviors just as much as do less narcissistic individuals,” the psychologists Joshua D. Foster, Jessica W. Shenesey, and Joshua S. Goff concluded in their 2009 Personality and Individual Differences Journal study of what drives narcissists. “Their risk-taking appears to instead be fueled by heightened perceptions of benefits stemming from risky behaviors. These results are consistent with a growing body of evidence suggesting that narcissists engage in some forms of potentially problematic behaviors, such as risk-taking, because of a surplus of eagerness rather than a deficit of inhibition that heightened perceptions of benefits and diminished perceptions of risks stemming from risky behaviors.”

Other analyses, however, suggest another dynamic may be at play: that is, narcissism may increase risk perception to the point of paranoia, at least in some areas.

“Putin’s recent speeches and news conferences suggest he may have fragmented psychologically and slipped into a paranoid mindset. He also seems to have responded with fear and dread to the pandemic,” Charles B. Strozier and David M. Terman wrote recently in The Bulletin of the Atomic Scientists. “Those huge tables at which he interviews foreign visitors and the extreme distance between him and his advisers suggest his need for an exaggerated isolation from potentially contaminated others.” Further, they warned, “Paranoid leaders often start wars out of the certainty of their grandiose read of their historical mission and the need to exterminate the ‘evil others’ who prevent or interfere with the realization of their grandiose goals. For that very reason they cannot accept defeat.” 

This dynamic can be especially dangerous when paranoia combines with the common cognitive bias known as loss aversion, which makes people willing to take bigger risks in order to avoid losing something than to gain something. For example: Ukrainians fighting to hold on to their country versus Russians sent to seize it.

Whether or not Putin is a narcissist, it’s worth keeping these risk-taking characteristics in mind when dealing with political leaders, CEOs and pretty much anyone who displays narcissistic tendencies.

Understanding Risk Motivation Is Power

Insights into what drives their risk behaviors can help you to understand what motivates narcissists –and, in turn, how you might behave around them to maximize your own risk outcomes.

Techniques for interacting with narcissists can work well for relationships with non-narcissists as well. Play to their sense of self-worth and what they think is important. Find ways to alleviate their fears, rational or not. Heighten the perceived costs of failure and benefits of success. The difference is that it’s easier to get away with neglecting these habits with non-narcissists than it is with narcissists, for whom forgetting them can be very dangerous.

Finally, if any of the above descriptions resonate with you –as they very well could with any risk-taker or leader—think about how you can counter-act them. Make sure that you have access to a variety of reliable advisors and viewpoints. When considering scenarios, make sure to include worst-case scenarios alongside your hoped-for ones. Find ways to reduce your fears and concerns –and realize that if you are too confrontational or aggressive in addressing your perceived weaknesses, you could aggravate the other party’s defensive instincts as well.

This article is part of my LinkedIn newsletter series, “Around My Mind” – a regular walk through the ideas, events, people, and places that kick my synapses into action, sparking sometimes surprising or counter-intuitive connections. 

To subscribe to “Around My Mind” and get notifications of new posts, click the blue button at the top right corner of this page. Please don’t be shy about sharing, leaving comments or dropping me a private note with your own reactions.

For more content, including guest posts and ways to engage me for keynotes, workshops, or strategic deep dives, please visit www.thegrayrhino.com.

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Michele Wucker
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Michele Wucker is a policy and business strategist and author of four books including YOU ARE WHAT YOU RISK: The New Art and Science of Navigating an Uncertain World and the global bestseller THE GRAY RHINO: How to Recognize and Act on the Obvious Dangers We Ignore. Read more about her at https://www.thegrayrhino.com/about/michelewucker
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Michele Wucker is a policy and business strategist and author of four books including YOU ARE WHAT YOU RISK: The New Art and Science of Navigating an Uncertain World and the global bestseller THE GRAY RHINO: How to Recognize and Act on the Obvious Dangers We Ignore. Read more about her at https://www.thegrayrhino.com/about/michelewucker

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