Mark Zuckerberg once told a group of young entrepreneurs at Y Combinator’s Startup School in Palo Alto that it’s risky not to take chances. “In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks,” he said. Looking at the world’s most successful leaders, including Zuckerberg, daring to dream and risk-taking are almost essential for the task.
Why is this the case? According to McGill University’s Jingjing Zhang, “sensation seekers” tend to embrace innovation and change, which intrinsically makes them better CEOs.
Zhang is the assistant professor of accounting at Desautels School of Management at McGill, and led the study that revealed the correlation between dynamic risk-taking and leadership. Research revealed that CEOs who search for exciting yet risky experiences, such as flying small aircraft, seek out and embrace diverse and high-impact innovation projects in business.
The researchers examined the performances of 88 CEOs who were also pilots, and over a thousand non-pilot CEOs in US firms from 1993 to 2003. Firms with a pilot CEO managed to increase the number of patented products or services by 66.7 per cent and the number of citations of these patents by 43.9 per cent.
“Our research demonstrates that companies led by ‘sensation seekers’, who display the same thrill-seeking tendencies as pilots, are able to generate more patents with greater market impact than their peers. This is because CEOs with this particular personality typically improve innovation effectiveness and pursue more diverse and original projects,” Zhang says.
The research suggests that businesses with a “sensation seeker” CEO are likely to be far more innovative.
“Managers with an inclination for creativity in corporate settings are far more successful when innovating. An openness to new ideas, and a willingness to pursue new methods of working overrides their desire to maintain structured and repetitive situations. They are also likely to be more innovative consumers, unafraid to try new products and always aware of alternatives,” Zhang adds. “Having this personality type at the helm of a business in an industry requiring high levels of innovation is likely to be a stepping stone to success.”