CEO Name Uncommonness Linked with Firm’s Strategic Distinctiveness
Wed, April 21, 2021

CEO Name Uncommonness Linked with Firm’s Strategic Distinctiveness

 

A person’s name is the core of their individuality and identity. It’s a way of recognizing people, a sign of courtesy, and one way of getting someone’s attention. Some recent research even suggests that names can influence where people live, the grades they earn, and their choice of profession. This influence of names on behavior has been attributed to the implicit-egotism effect, a hypothesis that humans have an unconscious preference for things they associate themselves with.

The tendency to implement unconventional strategies

Now, a new study published in the Strategic Management Journal shows that Chief Executive Officers (CEOs) with uncommon names also tend to implement unconventional strategies for the firms they lead. The authors believe that the positive relationship between their name uncommonness as well as their strategic distinctiveness is strengthened by their environmental munificence (scarcity or abundance of critical resources), power, and confidence.

To find support for their theoretical predictions, the team used the name commonness data from the US Social Security Administration and financial data of 1,172 public companies for over 19 years. They found that the company’s unique strategies are also systematically linked to their CEOs’ uncommon names.

A person’s name influences their behavior and sense of self

Yungu Kang from the W. P. Carey School of Business, Arizona State University, and co-authors explained that past studies have examined how organizational outcomes are linked with leadership personalities, demographic characteristics, values, and experiences but these did not focus on CEO names. The researchers argue that such a factor is also one of the most fundamental attributes since a person’s name influences their sense of self, cognition, and behavior.

Individuals with uncommon names are inclined to have a self-conception that they are different from their peers. While many people with uncommon names may not be confident enough to exhibit how unique they perceive themselves to be, such is not the case with CEOs. This is because these leaders are generally confident people.

So, CEOs with uncommon names are driven to differentiate themselves from other CEOs. Because of such, it influences the degree that their business strategy will vary from industry peers or they will have strategic distinctiveness. This is in agreement with findings from the previous psychological study, which found that successful professionals with uncommon names tend to perceive themselves as more creative, interesting, unique, and special than their peers.

Coming up with unique business strategies and implementing them is important for companies not only to achieve superior performance but to also gain a competitive advantage over their rivals. If a CEO has an uncommon name, they tend to adopt company strategies that deviate from the norms of the industry and this led to unique strategies.

 

 

Significance of the findings

The team hopes that their findings can help stakeholders predict and better understand a CEO’s strategic decisions for the company. Boards that seek to improve the distinctiveness of their company’s strategies, may, therefore, hire CEOs with uncommon names because they are the ones who tend to pursue distinctive strategies, the authors added.

Employees, middle-level managers, and other top executives can similarly expect a higher likelihood of adopting distinctive strategies in their company if their CEOs have a more uncommon name. On the part of competitors, they can expect their rival firm to have unusual competitive moves when the person that leads them has an uncommon name.

Unique and unusual names becoming a trend

Previously, BBC also reported that unique and unusual names are becoming far more common in today’s society and this reflects a profound change in culture. The effect, though, is that judges across the world would sometimes have to challenge and intervene with the parents’ choice of name for their baby. For instance, there was a baby named “Talula Does Hula Form Hawaii.” When the girl reached 9 years old, she was put into court guardianship so her name could be changed. The family court judge said that he gave the order after hearing that the child was embarrassed about her name and even refused to reveal it to her friend. “It makes a fool of the child and sets her up with a social disability and handicap, unnecessarily,” the judge said.

University of Leicester’s sociologist Jane Pilcher told BBC that names are at the core of everyone’s identity and are also linked to important legal identities, such as how we are identified by governments and states.

CEO Today has listed the top Chief Executive list worldwide based on a wide range of factors, such as their net worth, innovation public perception, and company value. Top in the list is Sundar Pichai, followed by Elon Musk, Satya Nadella, Bill Gates, and Daniel Zhang. Also included in the top 10 are Jeff Bezos, Mark Zuckerberg, Lakshmi Mittal, Warren Buffett, and Indra Nooyi.

 

 

Top CEOs in the US for 2019

In the US alone, Glassdoor ranks CEOs based on their approval rating. VMware CEO Pat Gelsinger earns the top spot with a 99% approval rating. H E B’s Charles C. Butt, In-N-Out Burger’s Lynsi Snyder, and T-Mobile’s John Legere also have a 99% approval rating.

Adobe’s Shantanu Narayen, Microsoft’s Satya Nadella, and McKinsey & Company’s Kevin Sneader earned a 98% approval rating. Glassdoor said that they also considered the employees' feedback in honoring the Top CEOs.

Meanwhile, tech jobs platform Leftronic published that the percentage of CEOs worldwide has increased dramatically in the past decade. At the end of last year, 29% of all senior management roles worldwide were fulfilled by women. Women CEOs also earned nearly 44% more than their male counterparts in compensation. However, female CEOs are also more likely to be fired than male CEOs. So far, there are an estimated 195,530 CEOs in the US and California is the state with the most CEO (30,290) followed by Florida (20,860). Some of the most famous CEOs in Florida are Facebook’s Zuckerberg and Apple’s Tim Cook.

In 2018, the share of companies in the US with ethnically and racially diverse CEOs are detailed as follows: Asian/Indian (30%), African American (5%), and Hispanic/Latino (19%). The list is provided by database company Statista.

Our names are important in forging one’s identity. The new study reiterates that it does not only influence a person’s lives to a certain point but even the direction of the company they work with, should they end up as leaders later on.