Transformational leaders challenge the status quo, provide a vision of a promising future, and motivate and inspire their followers to join in the pursuit of a better world. But many of these leaders also fit the American Psychiatric Association classification for narcissistic personality disorder. They are grandiose, entitled, self-confident, risk seeking, manipulative, and hostile. This article reviews the literature on narcissism and shows how what we think of as transformational leadership overlaps substantially with grandiose narcissism. As grandiose narcissists can appear as transformational leaders, it is important to distinguish between what leadership scholars have characterized as "transformational" and these "pseudo-transformational" candidates.

Innovation is as important in services as it is in manufacturing. However, competing on innovation in services demands a different organizational approach. Relative to innovation in manufacturing, innovation in services has five distinctive characteristics--it is: distributed throughout the organization; fluid, that is, more continuous than discrete; broadly relevant to hiring and promotion decisions; influenced by reward systems and culture at the firm-wide level; and enabled by leadership. The foundations--both cultural and structural--for competing on innovation in services must operate pervasively throughout the organization. Examines innovation in investment banking and discusses its implications for competing on innovation in other service industries.