The popular story of success is one of steady accumulation: competence yields wins, wins bring confidence, confidence compounds into bigger wins. But there’s a darker arc that shows up in boardrooms, war rooms and laboratories alike. A growing body of research suggests that repeated success and the power that comes with it can nudge personalities toward hubris, dull empathy, and skew risk assessment—sometimes with costly consequences for everyone else.

When winning changes the self

Neurologists David Owen and Jonathan Davidson coined the term “hubris syndrome” to capture what they observed in political leaders who rose to extraordinary power and then began to behave as if rules no longer applied to them—becoming more impulsive, overconfident and contemptuous of advice. Their analysis in Brain proposed that hubris can be an acquired personality change, more likely to manifest the longer and greater the power exercised. It is not a clinical diagnosis but a pattern serious enough to merit its own name, they argued, and one that often recedes when power is lost.

Psychologists have since filled in the mechanism. In a string of experiments, researchers show that power—often the companion and consequence of success—systematically shifts how people think. Adam Galinsky and colleagues found that people primed to feel powerful became worse at taking others’ perspectives and reading emotions, a subtle empathy erosion that matters in high-stakes judgment.

Power does not just narrow perspective; it inflates precision. Nathanael Fast and co-authors showed that those who felt objectively and subjectively powerful became more overconfident in their judgments, making costlier mistakes in tasks that penalized miscalibration.

Put together, this is a recipe for self-reinforcing error. Success confers power; power reduces perspective-taking and raises overconfidence; overconfidence feeds decisions that discount dissent and push risk boundaries. It is not that successful people become reckless overnight. It’s that the psychology of winning quietly re-weights how evidence is processed and how uncertainty is priced.

From laboratory to the corner office

The corporate-finance literature adds hard edges to these psychological findings. Ulrike Malmendier and Geoffrey Tate pioneered ways to identify overconfident CEOs—leaders who hold in-the-money stock options far too long, revealing an exaggerated belief in their own firms. In The Journal of Finance, they documented that companies led by such CEOs invest more when they have abundant internal cash, consistent with managers who overestimate project returns and view external capital as unduly costly.

In mergers and acquisitions—the arena where executive hubris has long been suspected—Malmendier and Tate found that overconfident CEOs are markedly more acquisitive and more likely to destroy value when they buy. Their study estimates that the odds of making an acquisition are 65% higher when the CEO is classified as overconfident, with significantly more negative market reactions at announcement.

These are not one-off curiosities. Across samples and settings, “success plus slack” tends to amplify managerial miscalibration. Internal funds and past wins encourage more aggressive bets, and when checks—like skeptical boards or the discipline of external capital—are weak, those bets are more likely to be value-destructive. The psychological and financial strands meet at a single point: the more your recent performance tells you “you were right,” the more tempting it is to overweigh your own judgment next time.

The house money problem

Behavioral economics explains a further nudge from success to risk. Richard Thaler and Eric Johnson’s classic “house money effect” shows that people treat prior gains as if they were the casino’s money, and so they take more risk after winning. In experiments, prior positive outcomes increased risk-taking even when the rational calculus should not change.

In corporate settings, that “house money” can arrive as a surging stock price, excess cash flow, or a string of successful deals. The psychology is the same: windfalls are mentally segregated from hard-won capital, loosening risk constraints. If the leader at the top is both flush with internal funds and buffered by adulation, you have the conditions under which hubris can migrate from a personality quirk to an organizational hazard.

Can anything inoculate against success?

If success can tilt personality toward overconfidence and poorer risk assessment, the natural question is whether anything pushes back. The research offers a few guideposts. First, the overconfidence effects in Fast et al. are strongest when objective power translates into subjective feelings of power; structures that diffuse authority and demand justification can interrupt that translation.

Second, perspective-taking is a trainable discipline. Galinsky’s work explicitly measures perspective-taking deficits under power; later work in social psychology suggests targeted perspective-taking interventions can improve decisions in intergroup and negotiation contexts.

Third, financial frictions can be features, not bugs. When overconfident managers face the scrutiny of outside capital, they are less able to chase pet projects; when they sit on large internal cash balances, investment becomes more sensitive to those internal funds. That asymmetry is central to Malmendier and Tate’s results.

Fourth, boards should be alert to the telltales of Owen and Davidson’s hubris syndrome: contempt for criticism, exaggerated self-confidence, a belief in personal infallibility, and a drift toward impulsive decision-making. While their paper analyzes political leaders, the behavioral pattern is portable to corporate life.

Success without the spiral

The uncomfortable conclusion is not that success corrupts, but that it reliably changes the decision environment inside a successful person’s head. The best leaders counteract that change with process and culture. They create dissent channels that actually bite, insist on pre-mortems for big bets, and tie risk-taking to ex-ante decision rules rather than ex-post outcomes. They keep perspective-taking rituals in the calendar—customer calls, frontline visits, devil’s advocates—precisely because power makes those habits harder to sustain. And they treat cash cushions as obligations to be justified, not chips to be played.

What the evidence says, across neuroscience-inspired observation, psychology experiments and corporate data, is that too much unchallenged success breeds the conditions for hubris and misjudged risk. The antidote is not to punish winning but to design for humility: structures that reintroduce friction, perspectives that puncture certainty, and disciplines that separate luck from skill. In other words, if success is a stress test of character, the pass mark is not perfection. It’s whether you put guardrails in before you need them.