One job of a leader is to help the members of a group communicate with each other. If information is flowing between group members, then better decisions can be made. So, what do narcissists do to information flow amongst group members?
What Nevicka et al.'s study found was that narcissistic leaders actually reduced information sharing among groups, which led to worse group performance.
Crucially, though, this wasn't the perception of the group. The groups thought the narcissists were doing a good job, when actually they weren't (as measured by task performance). This perception is probably dynamic:
"It is possible that over time, group members’ positive impressions of narcissistic leaders decrease. Indeed, previous research has shown that although people’s impressions of narcissists are positive at first, they decline over time (Paulhus, 1998)." (emphasis added)
But by then we're stuck with them.
Well, maybe, but sometimes underperforming narcissistic leaders actually get the boot depending on how much accountability they have for job performance. Depending on what organization you're in there are ways to opt out. In employment settings, yes, you're stuck with a narcissist but in voluntary associations (i.e. clubs, churches, etc.) you can go somewhere else.
It can certainly turn out that a narcissist gives an impression of being very competent and accomplished in the short run and then it is possible to surmise that the person isn't even close to being as good as he or she thinks he or she is. I suppose to put it in absurd comic book lingo, the Riddler can think he's the best and smartest criminal out there and that he can't be figured out but we know Batman will work things out sooner or later. Riddler's narcissistic pursuit of proving his individual glory doesn't beat Batman's willingness to cooperate to solve a problem.
There is a point where the sentiment "none of us is as dumb as all of us" is a realistic skepticism about herd tendencies but there is another point at which the sentiment "none of us is as dumb as all of us" is a reflection of a narcissism that proposes that the individual transcends the huddled masses of the stupid, the average, and the pedestrian. I have been reviewing a bunch of Batman: the animated series episodes lately and so I trust you'll just overlook my reflexive tying things to Batman cartoons. I'm still struggling to work out a whole bunch of ideas about themes and character arcs in this series for Mockingbird.