Why Do Leaders Matter? The Role of Expert Knowledge

Why do some leaders succeed while others fail? This question is important, but its complexitymakes it hard to study systematically. We examine an industry in which there are welldefinedobjectives, small teams, and exact measures of leaders’ characteristics. We showthat 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 15,000professional basketball games. The effect on team performance of the coach’s ‘expertknowledge’ is large and is discernible in the data within 12 months of his being hired.