As an extrovert, I hate to admit it, but charisma really doesn’t improve a firm’s performance
3 min
Leigh Thompson is the J. Jay Gerber Professor of Dispute Resolution and Organizations and a director of executive-education programs at Northwestern University’s Kellogg School of Management. She is the author of several books, including “Negotiating the Sweet Spot: The Art of Leaving Nothing on the Table.”
I’m an extrovert and I admit I’ve benefited from it.
Outgoing people are more likely to be noticed, selected as leaders and awarded “halo” traits—meaning that other people just assume extroverts are more likeable, intelligent and have other positive qualities. But as a social scientist, I can’t ignore the research: Most of these beliefs about extroverts simply aren’t true.
Studies show that introverts and extroverts are equally effective in academic and corporate environments, and that there is no actual relation between CEO charisma and firm performance.
Yet the misconceptions about extroverts persist, making them more likely to be chosen as leaders over their more introverted peers. That’s unfortunate because in our post pandemic world, replete with remote work, hybrid communication, far-flung team members, artificial intelligence and global disruption, introverts are particularly well-equipped to lead.
That may be hard to believe because of two persistent myths.
First is the widely held stereotype that effective leaders are gregarious, alpha and comfortable in the spotlight, even craving that attention. In reality, the social skills that extroverts display aren’t necessarily predictive of capable leadership.
Second is the belief that quieter people lack leadership skills. They are seen as less social, unassertive, sad and disconnected. Indeed, in a recent study in which people in different groups were instructed to “act like an extrovert” or “act like an introvert” regardless of their actual personalities, those who acted extroverted were disproportionately selected for leadership. And, interestingly, those who pretended to be introverted in that study reported feeling sad.
Both of these myths ignore the reality that introversion, far from being simply a lack of extroversion, is a distinct set of traits with its own large merits. This was true well before the pandemic, but the remote-work environment illuminated the bias even more and highlighted the need to change our perceptions.
Here are five reasons why introverts could be ideal leaders in the redefined workplace.
1.Remote-work performance. Extroverts’ job performance declined when the pandemic forced many businesses to go remote. A study of remote workers found that extroverted employees became less productive, less engaged and less satisfied with their jobs. A separate study found that team average extroversion had a large negative effective on team performance—that is, the more extroverted the team members were as a group, the worse they performed.
2. Dealing with adversity and change. Introverts show a greater capacity to engage, think through and make wise choices during periods of adversity and change. A recent investigation found that introverts had more positive attitudes toward AI and using AI overall than did extroverts. A separate study found that during periods of high conflict, extroverts develop fewer energising relationships with their teammates and aren’t viewed as proactively contributing to the team. Introverts, however, often possess a predisposition for things like empathy and thoughtful communication—all critical for navigating team dynamics and conflict in tough times.
3. Creativity. Introverts’ creativity flows well in the quiet aftermath of group interactions, positioning them as formidable leaders for innovative and reflective tasks. In studies of communication and conflict, introverts’ tendency to think before speaking was seen to yield more creative solutions.
4.Avoiding avoidance. Most humans approach positive things and avoid negative things. Sounds like a good policy—unless we’re talking about workplace challenges. Research has shown that extroverts commit more passive avoidance errors—that is, when the going gets tough, they tend to avoid the situation altogether; meanwhile introverts are more likely to inspect the half-empty glass or the disappointing customer-satisfaction data, generating insights and solutions.
5. Resilience against quitting. A study of over 200 people revealed a correlation between extroversion and burnout—that is, the more extroverted a person reported themselves to be, the more likely they were to burn out. Introversion, on the other hand, was uncorrelated with burnout, suggesting better immunity.
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Nvidia’s earnings will test Wall Street’s confidence in the AI boom.
3 min
Chip makers are fighting to assure investors that the artificial-intelligence boom is racing forward. Wall Street might not believe it until Nvidia’s NVDA -0.98%decrease; down pointing triangle Jensen Huang says so.
When Huang steps up to the mic for his company’s earnings call Wednesday, he will have the world’s attention. What he says about Nvidia’s present will preview the future of AI, dictate the path forward for a tech-crazed stock market and influence an American economy increasingly tethered to hopes that the boom won’t go bust.
The $5 trillion chip maker has provided the key building blocks for AI since the launch of ChatGPT in 2022 set off a race for dominance among OpenAI, Anthropic and established Silicon Valley giants. Now, as Nvidia backstops sprawling data-center projects and an exotic money pipeline to boost chip demand, the company’s influence is arguably bigger than ever.
But there are signs of trouble ahead. Political pushback to AI is growing. A bond selloff propelled borrowing costs to their highest levels in years. The hyperscalers that include some of Nvidia’s key customers—once cash-printing machines—are relying more on debt. OpenAI recently told investors its revenue rose by a tepid 18% in the second quarter while its losses deepened.
Nvidia is increasingly stepping in to shore up potential weak points across the market. Earlier this month, the company teamed up with six of Wall Street’s biggest firms on a $500 billion AI-financing plan, pledging to backstop lending to customers that can’t afford its chips otherwise. The chip maker last week also took a stake in Cloverleaf Infrastructure, which arranges power for data centers, and struck a $6 billion deal with startup Poolside aimed at developing a powerful open-weight AI model.
After watching shares in other chip makers and the so-called Magnificent Seven tech companies swing wildly in recent months, Wall Street is hoping Nvidia can beat expectations—again. The countdown is on.
“It’s kind of becoming more and more like the World Cup final than the Super Bowl at this point,” said Brian Mulberry, chief market strategist at Zacks Investment Management. “It’s just gotten to be that big.”
The company has smashed analysts’ earnings estimates for each of the 14 quarters since the AI boom kicked into high gear. Nvidia posted 210% annual growth in net income in its last three-month period, according to FactSet, making Wall Street’s 126% projection look pedestrian.
Expectations for a blowout second quarter have risen rapidly over the course of this year. All Nvidia will have to do to beat this target: outrun 95% annual earnings growth to more than $51.5 billion. Analysts project the chip maker will report record sales of $92 billion for the period, up from a forecast of $78 billion at the start of this year.
In July, big-tech earnings sparked volatility. Concerns about runaway capital spending spread across the sector after Alphabet’s and Tesla’s results, driving a $890 billion wipeout that contributed to the unwind of hedge fund Situational Awareness. Microsoft posted the largest one-day gain in market capitalization by any company, ever, after a quarter proving that it could still show investors the money. SpaceX rocketed higher after a record-breaking initial public offering, only to see $1 trillion in value evaporate.
Surging memory prices and borrowing costs have fueled fears that those and other companies will be unable to keep plowing more money into supplies including Nvidia chips. Shaia Hosseinzadeh, founder of OnyxPoint Global Management, has recently bought dips in AI-infrastructure stocks when Wall Street has strained to absorb massive debt issued by Silicon Valley.
“The macro data is really quite robust,” he said. “Of course, there’s a level at which everything breaks.”
Investors have kept pumping money into the AI trade despite concerns around chip consumers—and to the benefit of chip producers. That is why Nvidia’s outlook for semiconductor demand could send ripples through counterparts such as Micron Technology and Sandisk, developers of the data centers in which their chips reside, and a supply chain of power producers, contractors and other specialists that underpin the globe-spanning AI build-out.
“We joke internally that we’re all Nvidia analysts now,” said David Lefkowitz, head of U.S. equities at UBS Global Wealth Management.
The irony is that investors have tended to sell Nvidia stock immediately after blockbuster earnings, with shares falling each trading session after its four past quarterly reports. Some are betting that will be the case this time around, too.
The options market is pricing in a 5.3% swing, higher or lower, in Nvidia shares during the session following earnings, according to Option Research & Technology Services. That is higher than the 4.8% average move in Nvidia’s stock over the last 12 months after the company reports quarterly results.
In recent days, some of the most actively traded Nvidia options have been put contracts tied to the stock falling from its Friday value of $214.75 to $205 and $210 apiece, according to Cboe Global Markets data. Put options give the right to sell a stock by a set price and typically represent a bearish wager.
Many analysts remain optimistic. Frank Lee, global head of tech hardware and semiconductor research at HSBC Global Investment Research, recently raised his price target for Nvidia shares to $360 from $325, citing, among other things, Nvidia’s strategic partnerships with suppliers and its role as a top contributor to open-source AI.
