Link: https://www.cutter.com/article/overconfident-ceos-simplifying-firms-ignoring-risks
From Leadership
Shuhui Wang and Hirindu Kawshala analyze more than 14,000 earnings call transcripts to examine how CEO overconfidence impacts firm complexity. They find that overconfident CEOs tend to reduce complexity, often at the cost of long-term alignment, as illustrated by John Flannery’s short tenure at General Electric. Their study underscores the importance of aligning CEO traits with a firm’s strategic and operational needs, particularly during leadership transitions. Boards must discern whether simplification efforts reflect sound strategy or risky overconfidence.
Leadership
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