Sometimes, it pays to judge a book by its cover

By Dr. Yungu Kang

Would Tesla really be Tesla if its CEO was named Roger instead of Elon? Surely, the fact a CEO has a rather unusual name is irrelevant to the strategic choices made by its firm?

While factors like the personality, values, experience, and demographic characteristics of top executives have been linked to the strategies and performance of their firms, psychology also suggests that an individual's name is a key anchor of identity and an important determinant of personality. Since the uncommonness of an individual's name does substantially influence how other people view that individual – we have all made fun of someone’s name at some point – could it be that the ‘funny” names of a firm’s senior executives shape its strategy? In “Being extraordinary: How CEOS' uncommon names explain strategic distinctiveness¹” researchers use 19 years of data on given names from the U.S. Social Security Administration and 1,172 public firms to explore whether the link between a firm’s strategic distinctiveness (a combination of 6 dimensions influenced by CEOs such as R&D spending, capital expenditures and leverage) and the name of its CEO. Conclusion? Names matter!
 
In life, having a “weird” name can initially reduce a person’s self-esteem, especially when it leads to bullying and racism. But the situation can improve fast as others get to know the individual, so much so that uncommon names are now synonym with creativity and popularity, especially for high achievers. Successful professionally and with healthy levels of self-esteem and confidence, CEOs with uncommon names show there’s life after middle school for kids not named James or Karen.
 
Because of the way they are treated, people with uncommon names often grow to think of themselves as different from their peers, a feeling further amplified when a person has a different heritage. As they grow up, that feeling remains.
 
Moving from the schoolyard to the executive suite, CEOs compare themselves with other CEOs. Having overcome the early challenges of being different, CEOs with uncommon names still believe they are not the same as other CEOs. As per the data, pursuing strategies that differ from industry peers is one way of expressing that difference. Although innovative strategies can work, they can be riskier. Used to being different, CEOs with uncommon names appear more opened to try something new. This willingness to challenge the status quo is higher when for CEOs who are more confident (using the exercise of stock options as proxy), more powerful (such as being chair of the board) or operate in a growing business environment.
 
While firms may add “name commonness” to their selection criteria when deciding between a leader keen to set a new direction or a CEO happy to stay the course, the real question is how parents should name their children to help them climb the corporate ladder!

Reference:

¹ Kang, Y., Zhu, D., & Zhang, A. (2021). Being extraordinary: How CEOS' uncommon names explain strategic distinctiveness. Strategic Management Journal, 42(2), 462-488.