Why Do Leaders Matter? The Role Of Expert Knowledge

Why do some leaders succeed while others fail? This question is important, but its complexity makes it hard to study systematically. The authors draw on a setting where there are well-defined objectives, small teams of workers, and exact measures of leaders' characteristics and organizational performance. They 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. The data come from 15,000 professional basketball games and reveal that former star players make the best coaches. This 'expert knowledge' effect is large.