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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Strong family financial planning can help reduce taxes and support younger generations. From intrafamily loans and asset gifts to inheritance disclaimers, strategic cooperation can create meaningful financial benefits—when families have the trust and structure to make it work.
4 min
Happy is the family whose members—parents, grandparents and grown children—trust each other enough to cooperate on shared goals, especially financial ones. When that is truly the case, Uncle Sam’s tax rules can help as well.
This matters especially now that mortgage rates are above 7%, and many families are looking for ways to help younger members. If the elders have resources and are confident younger ones can cooperate, a family loan could make homeownership possible while providing the elders with a useful income stream.
Other strategies can actually lower taxes, such as when funding 529 plans or Roth IRAs, or when someone inherits a traditional IRA with required withdrawals larger than they will need.
Here are three strategies useful for functional families.
It is perfectly legal for families to lend money to a relative for a down payment or even a private mortgage.
But it is important not to cut corners, says Ryan McKeown, a CPA with Modern Wealth Enhancement in Minnesota. If the loan is for a down payment, be honest with the mortgage provider and have a formal agreement. The lender owes tax on the interest payments received.
If the loan is for a private mortgage, both sides should have legal representation with a formal written agreement, including payment terms. The lender owes tax on the interest, and the borrower often can deduct it if he or she itemizes.
To avoid IRS trouble, the interest rate shouldn’t be lower than the agency’s Applicable Federal Rate at the time of the loan. Currently that is about 5% for loans longer than nine years; about 4.5% for loans three to nine years; and about 4% for loans three years or less. Currently, traditional mortgage rates are generally above 7%.
In addition, the lender could use the $19,000 annual gift-tax exemption (described below) to forgive some or all of the interest or principal annually. If both lenders and borrowers are married, that is up to $76,000 a year. There is no tax for the borrower on such forgiveness, because it is from a gift.
If you’re going this route, McKeown advises against having a fixed plan to forgive the debt. Instead, do it in one-off letters specifying the amount—and keep careful records. Otherwise the IRS might try to treat the loan as a taxable gift.
Powerful tax-saving moves for families often use gift-tax provisions. Under current law, anyone can give anyone else up to $19,000 of assets annually, free of gift tax. That means a married couple with three grandchildren could give them a total of $114,000 in 2026.
The gifts can be cash or other assets, like stock. For noncash gifts, the cost basis—which is the starting point for measuring taxable gain after a sale—“carries over” to the recipient. So if someone buys $1,000 of stock and gives it away when it is worth $5,000, the recipient’s cost basis is $1,000. If the recipient later sells the shares for $8,000, the taxable gain is $7,000.
Here’s an example showing how gifts could save a family taxes. Grandma is a widow of modest means, while her child and spouse have prospered. The couple has two children, and they want to contribute $5,000 to a 529 college-savings plan for each—but they need to sell stock to do it. Their tax rate on the sale would be 18.8%, and they would need to sell about $11,000 of stock.
However, Grandma’s federal tax rate on the stock sale is 0%. If the couple gives $10,000 of shares to Grandma, she could sell them, pay no tax, and fund the grandchildren’s 529 plans. This saves about $1,000 of tax.
These moves are legal, and they could be used in other ways, such as to help a young person fund a Roth IRA.
But trust among family members is essential: Under the law, givers can’t put conditions on a gift. Grandma could use her stock proceeds to take a cruise, but she makes 529 contributions instead.
Mark Sellner, a retired tax attorney and CPA living in Sarasota, Fla., uses this strategy. His children sell stock he gives them and fund 529 plans for his grandchildren.
The family’s tax savings aren’t huge, but he likes other benefits. The sales by his children don’t boost his adjusted gross income, which in turn could raise his Medicare Irmaa premiums or his 3.8% surtax on net investment income.
Sellner doesn’t worry about his children using the funds for another purpose.
“There can’t be any strings attached to gifts. Of course, it is up to us to decide whether to make them in the future,” he says.
Two caveats: The “kiddie tax” applies to most children under age 24, and it is levied at the parents’ rate on investment income above $2,700 in 2026. Consider this before making gifts to a young person.
Investors who give away stock also forgo the step-up, an important provision that exempts assets held at death from capital-gains tax.
Sellner knows he’s losing a step-up, but says, “The children could use a little more now. Why should they wait 20 years to get it?”
A disclaimer is a highly useful strategy in which one heir renounces an inheritance in favor of another heir. Assuming family members cooperate, this can save taxes.
Here’s one example. Dad died and had a large traditional IRA that he left to Mom. She has enough assets and income to cover her expenses, and she lives in a state with a stiff estate tax. The inherited IRA would put her estate over the threshold.
Also surviving are three young-adult children. If Mom disclaims all or part of Dad’s IRA within nine months of his death, that amount could go directly to the children. They will have 10 years to empty the account, and the family as a whole will likely save estate and income taxes.
Disclaimers have many key details, especially regarding beneficiary documents. Although heirs have great freedom in choosing what assets to disclaim, the rules about who gets disclaimed property are rigid. It is best if the original owner names tiers of heirs so that if one disclaims, the next recipient is clear.
