There are no superhero CEOs

December 3, 2012: 5:00 AM ET

Because many chief execs control so much money and we pay them so handsomely, we want to believe they deserve to be treated like stars. Most of the time, we are building ourselves up for disappointment. How to break the cycle.Superhero Businessman Standing on Pedestal --- Image by © Images.com/Corbis

FORTUNE -- We want so badly to believe in superheroes. When it comes to business leaders, that can quickly turn into a liability. Many chief execs control so much money, and we pay them so handsomely, so we treat them -- and want to believe they deserve to be treated -- like stars.

In business, "the culture of celebrity is maybe as strong as it's ever been," says Zachary First, managing director of The Drucker Institute.

Several forces create a star CEO. For one, high-profile leaders tend to know how to work a room, and many may have learned to like the limelight. But also, employees, the market and the media want strong leaders, and sometimes strength becomes conflated with infallibility. Star CEOs are not inherently bad for business, though they can be. J.C. Penney (JCP) CEO Ron Johnson, for example, is dealing with a particularly tight margin of error at the struggling retailer partly because of his especially impressive performance as senior VP of retail operations at Apple (AAPL).

A couple of organizations have tried to mitigate dependence on one central leader. W.L Gore and Associates, the company behind the high-tech, waterproof fabric GORE-TEX has what is called a "flat lattice" leadership scheme. They've created an entire language around this: they call bosses "sponsors," and have no employees, but "associates." The company holds that leaders will naturally emerge when groups form to accomplish certain tasks.

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But a non-hierarchical structure requires a tremendous amount of work, says First, and even functional flat companies have founders and CEOs. "To look up the social hierarchy and not see anyone at the top is an extremely stressful position for companies to be in. We want to know that somebody's in charge, that there is an authority."

It takes a village to make those authorities stars. "They're only celebrities because a lot of people choose to go and sit in the audience to hear them," First says.

Celebrity can become a crippling distraction from good leadership, but it doesn't have to play out that way. Leaders can be both self-obsessed and humble, claims David Waldman, a management professor at Arizona State University. His research suggests that some capable business leaders are what he calls "softer" narcissists. "Okay yeah, they like to be the subject of the limelight, they have high self-regard, and a degree of hubris. But they also recognize that other people around them deserve a lot of praise."

It's an idea he first read about in Michael Maccoby's 2000 Harvard Business Review article about the pros and cons of narcissistic leaders. "Throughout history, narcissists have always emerged to inspire people and to shape the future," Maccoby writes in the piece. The ones who lead companies to greatness, he suggests, are those who can recognize their own limitations.

There are a couple of ways to keep a clear head in the face of CEO stardom. Pay is one. In a study of Waldman's that he is currently submitting to peer-reviewed journals, he found that in the United States, CEOs with salaries close to those of their next top managers tend to be more humble than CEOs at companies with large pay gaps. Those management teams tend to be more effective, he says. "[They] engage in exploration and new learning and also exploit existing knowledge quite well."

Star CEOs can also stay humble by creating less physical distance between themselves and employees. One example is Alfred Sloan, who was CEO of General Motors from 1923 to 1956. "Sloan was the first celebrity CEO," said David Farber, author of the biography Sloan Rules, in an interview with the University of Chicago Press. Sloan certainly believed he was destined for greatness. But he also worked with employees in the field. In a 1992 book called Managing for the Future, management scholar Peter Drucker wrote that Sloan would leave headquarters every three months and work openly as a salesman at GM (GM) dealerships across the U.S. Seeing the CEO hawking Buicks probably humanized him for his employees, First suggests.

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Solid succession planning can also temper star power. "If you believe that you are superman, there's no need to wonder who is going to fill your shoes," First says. CEOs with a good grip on their limitations will think about a successor early on in their tenure. Humble CEOs can also see the benefits of choosing a successor who has different strengths. It takes a degree of healthy perspective to see that companies need different things from leaders at different times in their history. "The question is not great leadership period," First says,  "it's always great leadership by whom for what."

And there is the crux. Star CEOs grow dangerous when they see their success as destiny, their place at the head of the pack as the only path possible, rendering all of their choices justified. The best leaders might enjoy the red carpet, that's fine, as long as they understand that being the best fit for the CEO job is a relative status -- relative to the needs of the rest of the people in an organization at a specific moment in time.

And fame, no matter how great it may feel, does not equal infallibility. "There is no superman," First says. "Those people are not there. Everybody's making tradeoffs."

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Shelley DuBois
Shelley DuBois
Writer - Reporter, Fortune

Shelley DuBois writes on management issues for Fortune.com. Before joining Fortune, she was a producer for National Public Radio's Science Friday and worked for Wired. Shelley has a graduate degree in science, health and environmental reporting from New York University. She lives in Brooklyn.

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