Why Do Leaders Matter? The Role of Expert Knowledge
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Goodall, Amanda H.; Kahn, Lawrence M.; Oswald, Andrew J.
Why do some leaders succeed while others fail? This question is important, but its complexity makes it hard to study systematically. We draw on a setting where there are well-defined objectives, small teams of workers, and exact measures of leaders’ characteristics and organizational performance. We show that a strong predictor of a leader’s success in year T is that person’s own level of attainment, in the underlying activity, in approximately year T-20. Our data come from 15,000 professional basketball games and reveal that former star players make the best coaches. This ‘expert knowledge’ effect is large.
Organizational performance; firms; leadership; fixed-effects; productivity