Glossary

An organization's capacity to pursue exploitation (refining what it already does) and exploration (developing what it does not yet do) at the same time. In the humility research it appears as the strategic orientation that mediates between an integrated top team and firm performance (Ou, Waldman & Peterson, 2018).

The curriculum's description (not diagnosis) of the bank CEO's working disposition: a drive to grow the franchise held in permanent tension with the knowledge that a bank fails from the tail, not the average.

The five broad personality dimensions used in most trait research: openness, conscientiousness, extraversion, agreeableness, neuroticism (or its inverse, emotional stability). In CEO studies they are usually estimated from proxies (language, observer ratings) rather than administered directly.

A contextual signal about one's current ability

A bank's capital relative to its risk-weighted assets; the buffer that absorbs losses before depositors and creditors are affected. A first-order constraint on a bank CEO's discretion.

Media-conferred status in which journalists attribute a firm's distinctive actions to the CEO's disposition; theorized to foster hubris and strategic persistence (Hayward, Rindova & Pollock, 2004) and empirically associated with post-award underperformance (Malmendier & Tate, 2009).

The share of variance in firm performance statistically attributable to CEO identity in variance-decomposition studies. Its size is contested: Quigley & Hambrick (2015) report it rising across decades; Fitza (2014, 2017) argues much of it is indistinguishable from chance. Any specific percentage must carry that caveat.

The risk that the other side of a transaction fails to perform. In banking and distribution it is a source of hidden concentration: many small exposures to one type of counterparty behave like one large exposure.

The explicit allocation of who may decide what, at what threshold, without escalation. A core Architect-level design choice; in partnerships and family firms, decision rights are often set by the ownership agreement rather than the CEO.

The deliberate withholding of concerns, information or opinions from superiors. In a 40-person interview study, 85% recalled at least one occasion of withholding an important issue, mainly from fear of being labeled negatively or of futility (Milliken, Morrison & Hewlin, 2003).

The statistical problem that arises when the "cause" being studied is itself shaped by the outcome or by unobserved factors

The stance "We will accomplish this; people who disagree simply don't understand the vision." Contrasted with productive conviction. Detectable in statements that carry no assumptions, no evidence and no condition under which the speaker would change course.

The five tags every consequential claim in the curriculum carries: FACT (uncontested, verifiable); RESEARCH FINDING (reported in cited research, usually correlational); INTERPRETATION (the program's reading of what findings mean); FRAMEWORK / MODEL (a teaching structure, useful rather than "true"); HYPOTHESIS (plausible, not well tested).

The two poles of a principal dimension in structured executive assessments: "hard" abilities (resoluteness, efficiency, persistence, holding people accountable) against "soft" abilities (teamwork, listening, respect). Execution predicted later success more strongly than interpersonal skill in PE/VC-backed CEO candidates (Kaplan, Klebanov & Sørensen, 2012), while boards appeared to favor interpersonal skills at hiring (Kaplan & Sorensen, 2021).

Investment in uncertain, potentially breakthrough directions rather than refinement of the known. Founder-led firms sustain more exploratory patenting, with more output at both quality extremes, than the professional CEOs who replace them

Industry × Scale × Lifecycle × Strategy × Governance × Problem = CEO Fit. Multiplicative by design: fit fails at the weakest term, so a strong match on five dimensions does not compensate for a zero on the sixth.

In Shen & Cannella's (2002) typology, a follower is an insider who succeeds a CEO who left voluntarily; a contender is an insider who succeeds a dismissed CEO; both are distinct from outsiders. Each type's consequences depend on what happens to the rest of the senior team afterward.

A chief executive who founded the company and still runs it. Structurally distinct through identity, ownership concentration, firm-specific knowledge and time horizon; associated with more R&D and capital investment (Fahlenbrach, 2009), more optimistic language and forecasts by proxy (Lee, Hwang & Chen, 2017), and a higher likelihood of replacement after hitting milestones (Wasserman, 2003).

The curriculum's name for the progression from "I'll figure it out" (Player) to "everything has to come through me" (a Coach who still plays): the founder's earned competence becomes the organization's bottleneck.

An index built from a CEO's résumé (number of positions, firms, industries, conglomerate experience, prior CEO roles) that captures breadth of transferable experience. Generalists earn a pay premium of about 19%, largest for complex mandates such as restructurings and acquisitions (Custódio, Ferreira & Matos, 2013).

Accurate self-assessment, acknowledgment of limits and mistakes, appreciation of others' strengths, openness to corrective information, and willingness to change one's mind. Observable as three behaviors: admitting limits, spotlighting others, modeling teachability (Owens & Hekman, 2012). Associated with TMT integration and empowering climates (Ou et al., 2014, 2018); less effective under extreme threat or time pressure.

Taken-for-granted beliefs that speaking up is risky

The systematic loss of critical information as it moves up an organization, produced jointly by managers' sensemaking (dismissing dissenters) and employees' self-censorship (Tourish & Robson, 2006). The Architect's dominant psychological danger.

Whether a new CEO comes from within the firm or from outside it. The evidence is conditional, not general: outsiders help mainly when prior performance is poor or the environment turbulent (Karaevli, 2007), or when integration is easy and context favorable (Georgakakis & Ruigrok, 2017).

A relationship in which more of something helps up to a point and then hurts. Strategic change shows an inverted-U with firm performance, with both the upside and the downside larger for outsider CEOs (Zhang & Rajagopalan, 2010).

A data-driven classification of CEO time use from week-long diaries: "managers" spend more time in one-on-one meetings with production staff and on plant visits; "leaders" in multi-function, multi-participant meetings with senior executives. A one-standard-deviation move toward "leader" was associated with about 7% higher sales, emerging after about three years; an estimated 17% of firms had a mismatched CEO type

The risk that an institution cannot meet obligations as they fall due because funding leaves faster than assets can be sold. For banks, the difference between core deposits and "hot" wholesale or brokered funding is the practical measure.

The fixed rhythm of reviews, meetings and decision points through which a CEO runs the company

Systematically measured routines for monitoring, target-setting and incentives. Practice scores are strongly associated with productivity and survival (Bloom & Van Reenen, 2007); in U.S. Census data they explain over a fifth of productivity variation, and about 40% of the dispersion lies across plants within the same firm (Bloom et al., 2019).

The latitude of action available to an executive, arising from the task environment, the organization and the executive's own characteristics (Hambrick & Finkelstein, 1987). Discretion determines how much a CEO's traits register in outcomes; empirical support is strongest for environmental sources and weakest for individual ones (Wangrow, Schepker & Barker, 2015).

The problem the CEO has been hired or retained to solve, as understood by the board or owner. A mandate the CEO cannot accept is a zero in the Effectiveness Equation; a mandate that changes (turnaround → growth) can convert a well-fitted CEO into a poorly fitted one without the CEO changing.

Four ordered levels: Temperament (the dispositions that get you to the door) → Capability (the skills that get you the job) → Maturity (the self-regulation that keeps strengths from becoming failure modes) → Fit (whether any of it works in this company, now). Higher levels do not substitute for lower ones.

In archival CEO research, narcissism is proxied by a composite of the prominence of the CEO's photograph in the annual report, prominence in press releases, first-person-singular pronoun use, and the pay gap to the second-highest-paid executive (Chatterjee & Hambrick, 2007). It is a proxy, not a clinical measure, and results vary with the measure used (Cragun, Olsen & Wright, 2020).

OEE is the product of availability, performance and quality rates for a production asset; utilization is the share of available capacity in use. The manufacturing CEO's most concrete feedback signals

Karaevli's (2007) reconceptualization of insider/outsider status as a continuum reflecting a new CEO's distance from the firm and the industry, rather than a binary.

In the Malmendier–Tate lineage, a CEO is classified as overconfident if they persistently hold deep-in-the-money stock options past the point a rational diversifier would exercise ("Longholder"), revealing an unusually strong belief in the firm's prospects. A revealed-preference proxy that could also reflect inside information or risk tolerance. Associated with investment tracking cash flow (2005), more and worse-received acquisitions (2008), more innovation in innovative industries (Hirshleifer, Low & Teoh, 2012), and faster pre-crisis lending growth in banks (Ho et al., 2016).

Strength → overused strength → liability, in twelve pairs: confidence → arrogance; optimism → delusion; persistence → stubbornness; decisiveness → impulsiveness; detail → micromanagement; empathy → conflict avoidance; dominance → intimidation; humility → hesitation; risk tolerance → recklessness; vision → fantasy; rigor → bureaucracy; adaptability → strategy-of-the-month.

The principle that a CEO's traits matter in proportion to the discretion they hold: where latitude is low, traits barely register; where it is high, the CEO's traits become the company's. Supported by hubris × discretion interactions (Li & Tang, 2010) and governance moderation of narcissism effects (Buyl, Boone & Wade, 2019).

Three role-shapes keyed to scale. The Player does the work; the Coach gets work done through a team he or she can still see; the Architect designs the system through which work is done by people he or she cannot see. Each carries a dominant psychological danger: insufficient action; inability to let go; isolation and information distortion.

Succession by the eldest child (historically the eldest son). Family succession by primogeniture is one of the two main correlates of poor management practice in manufacturing (Bloom & Van Reenen, 2007); family successions more generally are associated with

"We can probably accomplish this. Here is the evidence, the assumptions, and what would make us change course." The mature form of confidence: it commits while remaining falsifiable. Used as a rubric on learner-written statements in the simulator.

An indirect indicator standing in for an unobserved trait: option-holding for overconfidence, photo prominence and pronouns for narcissism, earnings-call language for the Big Five, press descriptions for either. Every CEO-personality finding built on a proxy carries measurement error and must be described as proxy-based.

A shared belief that a team is safe for interpersonal risk-taking

The possibility that the supposed outcome is producing the supposed cause: dynamic firms attracting narcissistic CEOs rather than narcissistic CEOs making firms dynamic; success producing confidence rather than confidence producing success.

Wasserman's (2008; HBR, practitioner) framing of the founder's trade-off between maximizing firm value by ceding equity and control ("rich") and retaining control ("king").

Hambrick & Fukutomi's (1991) conceptual model of five phases in a CEO's tenure

Any distortion that arises because the people or firms observed were chosen by a process related to the outcome: CEOs are self-selected, promotion-selected and board-selected, so "CEOs tend to be X" does not imply "X makes a good CEO."

The nine questions to apply to any CEO-research headline: endogeneity, selection effects, reverse causality, measurement/proxy error, industry effects, firm effects, governance effects, survivorship bias, and small samples with many tests. Attached to every research card.

The number of direct reports a manager has. A design variable at every level of Player → Coach → Architect; too narrow produces layers and slow information, too wide produces a CEO who cannot know his or her team.

The distortion produced by observing only those who survived a selection process. CEO populations look more uniformly confident than they are because the unconfident were filtered out earlier; "great CEO" lists are drawn from the survivors of luck as well as skill.

The risk of rare, extreme outcomes that dominate the distribution's consequences even though they rarely occur. Banks, insurers and leveraged companies fail from the tail; a CEO whose feedback comes from average outcomes is not seeing the risk that matters.

The degree to which a senior team actually works jointly

Eight paired settings a CEO can move rather than fixed traits: aggression ↔ caution; decisiveness ↔ inquiry; optimism ↔ skepticism; hands-on ↔ delegation; urgency ↔ patience; unilateral ↔ consensus; innovation ↔ operational discipline; centralization ↔ decentralization. Each has contextual signals that call for either setting and an overuse failure at each extreme.

The traits and behaviors that save a dying company

A mature CEO can say, and mean, both "We're going to do this." (conviction, agency, leadership) and "I was wrong. Change the plan." (intellectual humility, psychological security, adaptability). Every simulation debrief closes with: which sentence did your choice make easier to say later?

The proposition that organizations reflect the experiences, values and personalities of their top managers, because those characteristics shape how executives interpret situations (Hambrick & Mason, 1984). The 2007 update adds three moderators: managerial discretion, executive job demands, and TMT behavioral integration.

The pattern that narcissistic CEOs produce more extreme and fluctuating firm performance without better or worse average performance (Chatterjee & Hambrick, 2007); pooled evidence shows essentially no reliable link to average performance (Cragun, Olsen & Wright, 2020). Discretion is the amplifier.

The capstone's two corrections: the CEOs the public knows are a visible minority, not a representative sample (so charisma looks more common among successful CEOs than it is), and being known is not evidence of being good (award winners subsequently underperform; Malmendier & Tate, 2009).

Current assets minus current liabilities; operationally, the cash tied up in inventory and receivables net of payables. In distribution and manufacturing it is the fastest lever a turnaround CEO has and one of the first things a growth CEO must be willing to reinvest.