When Does Narcissistic Leadership Become Problematic? Dick Fuld at Lehman Brothers

Abstract

Driven by intense needs for power and prestige, narcissists all too frequently are to be found in leadership positions. Drawing on the dichotomy outlined in the literature that some narcissistic leaders are “constructive” (helpful) whereas others are “reactive” (unhelpful) to their organizations, I offer a new approach by reframing the debate and arguing that, at different times, a single individual may be both constructive and reactive. I draw on concepts from psychoanalysis in this formulation. I also argue that a downturn in the environment is the key factor that may lever a constructive narcissistic leader to become reactive. I use the example of Dick Fuld—whose leadership at Lehman Brothers was at the eye of the 2008 credit crisis storm—to illustrate this. A key implication is that constructive narcissistic leaders may be incubating problems that only become manifest at a later stage.