Hubristic Start‐up Founders – The Neglected Bright and Inevitable Dark Manifestations of Hubristic Leadership in New Venture Creation Processes

• Date: 01 July 2020
• DOI: http://doi.org/10.1111/joms.12604
• Published date: 01 July 2020
• Author: Martin Gersch,Jörg Freiling,Janina Sundermeier

© 2020 The Authors. Journal of Management Studies published by Society for the Advancement of Management

Studies and John Wiley & Sons Ltd

Hubristic Start-up Founders – The Neglected Bright

and Inevitable Dark Manifestations of Hubristic

Leadership in New Venture Creation Processes

Janina Sundermeiera, Martin Gerscha and Jörg Freilingb

aFreie Universität Berlin; bUniversität Bremen

ABSTRACT The hubris tradition of research has been criticized for limiting its scope by associat-

ing hubris predominantly with detrimental leadership behaviours. To counteract this bias, we

provide a more nuanced exploration of hubris and consider both beneficial and detrimental

manifestations of hubris in start-up founders’ leadership behaviours. Our analysis, based on

qualitative data from expert interviews and two case studies, indicates that, whilst hubristic start-

up founders are likely to fail overall, they also excel in creating and communicating visionary

scenarios, steering employees through critical situations, and extracting commitment from third

parties. These under-researched ‘bright’ manifestations of hubris allow start-up founders to lead

their venture towards a stage, in which their visionary power and resilience become crucial pre-

requisites for economic progress. Our findings extend knowledge on hubristic leadership, offer

new directions for the hubris tradition of research, and open up avenues for future research with

a more balanced view of hubris.

Keywords: entrepreneurial personality, hubris, leadership behaviours, start-up founders

INTRODUCTION

‘I thought, nobody is going to be crazy enough to do space, so I’d better do space’.

(Elon Musk[1])

‘We’re here to put a dent in the universe. Otherwise why else even be here?’. (Steve

Jobs[2])

‘When I’m told absolutely no, it’s a definite maybe’. (Dean Kamen[3])

Journal of Man agement Studi es 57:5 July 2020

doi:10. 1111/j om s. 126 0 4

Address for reprints: Janina Sundermeier, Freie Universität Berlin, Garystraße 21, GE - 14195, Berlin, Germany

(janina.sundermeier@fu-berlin.de).

This is an open access article under the terms of the Creative Commons Attribution License, which per-

mits use, distribution and reproduction in any medium, provided the original work is properly cited.

1038 J. Sundermeier et al.

© 2020 The Authors. Journal of Management Studies published by Society for the Advancement of Management

Studies and John Wiley & Sons Ltd

Processes of ‘creative destruction’ in the Schumpeterian sense have often been initiated

by start-up founders who set out to actively shape the future rather than merely antic-

ipate changes (Hayward et al., 2010; Maccoby, 2000; Ranft and O’Neill, 2001). T hese

godlike ambitions are interpreted in reference to Greek mythology as driven by hubris,

a rather abnormal psychological disposition particularly pronounced in leaders (Claxton

et al., 2015; Trumbull, 2010). Hubristic leaders are biased by a grandiose belief in their

talents and abilities, which they express through high levels of self-confidence, exagger-

ated pride, overinflated positive self-evaluations, and arrogance (Judge et al., 2009; Owen

and Davidson, 2009; Petit and Bollaert, 2012). The ‘hubris theory of entrepreneurship’

suggests that hubris is particularly prevalent in start-up contexts, as it supports founders

to enact their seemingly far-fetched plans despite facing high levels of failure rates, time

constraints and uncertainty (Hayward et al., 2006). These ‘bright’ effects of hubris on

leadership emergence are, however, rarely reflected in research on leadership effective-

ness, which is primarily focused on the determination of hubris’ ‘dark’ manifestations in

leadership behaviours: excessive risk-taking (Hodgkinson and Partington, 2008; Li and

Tang, 2010); flawed, subjective assessments of decisions (McManus, 2016; Mishina et al.,

2010); and strategic persistency (Chowdhury, 2014; Hiller and Hambrick, 2005). The

only exception is a more recent study by Tang et al. (2015a) who found that hubristic

leaders are drivers of firm innovation.

Research in this area has been recently criticized for its limited scope, particularly

with regard to the inherent association of hubris with detrimental leadership behaviours

(Bollaert and Petit, 2010; Judge et al., 2009; Tang et al., 2015b). This research bias has

resulted in the literature to date lacking holistic and impartial investigations of how hu-

bris is manifested across core leadership behaviours (Judge et al., 2009; Picone et al.,

2014). This is surprising as similar shortcomings have long been addressed in literature

on narcissistic leadership (Chatterjee and Hambrick, 2007; Maccoby, 2000; Rosenthal

and Pittinsky, 2006), and the examples of the three successful start-up founders referred

to above should invite closer investigations into a more rounded approach to research-

ing hubris in start-up leaders. Whilst the ventures of all three of these founders have at

times teetered on the verge of failure due to spectacular misjudgements of markets and

stubborn resistance to criticism on their part, they have also had the courage to realize

their visions for highly innovative and disruptive business ideas, which more conservative

founders would rather not have pursued (Hayward, 2007; Picone et al., 2014). Crucially,

their success rested on their ability to persuade investors and employees to provide re-

sources, without which the exploitation of their far-fetched ideas would not have been

possible (Hayward et al., 2010; Ranft and O’Neill, 2001).

These observations could entail two interesting, yet hypothetical, implications for the

hubris tradition of research. First, it seems feasible that hubristic founders succeed in

certain leadership matters, particularly those involving the conception of visionary, po-

tentially disruptive scenarios and their enactment through the extraction of commitment

from third parties, while failing in others (Bollaert and Petit, 2010; Hayward, 2007; Judge

et al., 2009). Second, whilst the three cases do not disprove the higher failure rate of hu-

bristic founders, they do indicate that ‘such failure is not necessarily bad for ventures and

entrepreneurial activity’ (Hayward et al., 2006, p. 170). On the contrary, hubristic found-

ers seem to be able to lead their ventures towards a stage, in which their visionary power