Archive for September, 2011

‘One out of every 25 business leaders could be psychopathic* ‘

Friday, September 23rd, 2011

Is your Boss a psychopath?
Is your Boss a psychopath?

What a great headline and timely – we’ve all worked with bosses from hell, and at times of turbulence when people are very stressed, these stories have a particular resonance. But the headline is a gross simplification.  **1 in 25 out of small sample of 200 individuals – that’s 4% of a really small population. 

Many of the skills sets required to be a good boss could easily be confused with those described as psychopathic traits.  Doing business means that we are not always authentic in our emotional response to situations.  Appropriate senior management behaviours include:

·         Always outgoing and charming in public, (even if you’ve just lost a major contract).

·         Knowing when not to engage at an emotional level, and even when to ignore individuals (and how not to give offense when you do not).

·         Staying adult, (whatever the provocation), with staff, and customers.

·         Maximising time to useful contacts; minimising time given to those who are not useful – and making assessments about the ‘usefulness’ of the people concerned.

·         Firing people  – even if they have families to support and there is no other employment for them.

·         Making political accommodations and contracts with people and companies you do not ‘admire’.   

Consider also entrepreneurs?  Individuals who succeed against the odds – be it in commercial or not for profit sectors tend to have different psychological traits to those of the general population.  Some of these traits are not very attractive.

Here is how to protect your organisation from psychopaths:

1                    Know your business – it’s hard to fake when managers are knowledgeable about their business. 

2                    Manage performance – manage performance against objective criteria and agreed timelines.  To underline the point, business plans usually come with numbers and dates. 

3                    Have robust hiring systems.

4                    Inform everyone one of and apply relevant processes (including informal networks) to stamp out bullying.

5                    Ensure the Organisational Values are alive, not just written on a piece of paper – which means including them in performance management.

 

 Talk to us, in confidence and without obligation about helping your managers develop the competence and confidence to manage effectively.  Solutions that engage, motivate and fit around, rather than disrupt the business.

*The Guardian newspaper and other media sources.

**The study was conducted by Dr. Paul Babiak, you will find more – including a (n interesting) check list of psychopathic traits at http://aftermath-surviving-psychopathy.org.

Revenge of the Organic Carbon Units?

Wednesday, September 7th, 2011

Robosigner sued!

Emerging news that the US Federal Housing Finance Agency is suing various banks caught our eye.  The cases allege that the banks systematically failed to follow both market regulations and their own procedures in approving mortgages in the run up to the credit crunch.  The resulting ‘bad’ loans were then guaranteed by Fannie Mae and Freddie Mac, quasi-government agencies, and the FHFA is seeking to recover the billions the US tax payer lost.

The case has been rumbling for a while, with attention initially on how the banks foreclosed using the same inadequate approach, which we mentioned back in October 2010.   At that time we asked what was the purpose of management in such organisations?  Machines would be simpler to employ, less troublesome to manage. 

Now it would seem that the malaise was deeper, perhaps revealing a cynical disregard for the customer in the chase for short term advantage? If so the cynicism would seem to have been less than smart on the part of the banks’ Boards, as one of the customers they ‘turned over’ was a powerful government agency.  Such customers, backed with legal as well as market power, tend to hit back hard.   

Our premise still stands – management matters, and it is the Board that ultimately sets the standard.  Was this a sin of commission rather than omission?  It will be interesting to see the resolution of these cases, and the resulting impact on the regulation of financial markets and the banks.  

 Talk to us, in confidence and without obligation about helping your managers develop the competence and confidence to manage effectively.  Solutions that engage, motivate and fit around, rather than disrupt the business.

 (from October 2010) So, why use people?

The news that Wells Fargo management used ‘robo’ signers to approve mortgage foreclosures caught our eye*.  Also in the frame for similar practices are JP Morgan Chase and GMAC Mortgage (Ally Bank).  The Wells Fargo VP of Loan Documentation giving evidence in a Florida lawsuit said she only checked if her name and title were correct on the documents.  She also signed affadavits stating she had “personal knowledge of the facts regarding the sums of money which are due and owing to Wells Fargo”.  These were used in foreclosure proceeding.  This is gold for the lawyers who are challenging the bank foreclosures.

This information raises intriguing questions, not least what is the purpose of managers in such institutions? Does the process manage the manager or does the manager add some value by managing?  And even if the (automated?) process worked as designed (aka those affavdavits), then the fact that the lawyers are able to make hay with it, shows a management failure.  Was the organisational effort to deal with the historically challenging volume of foreclosures such that sight was lost of treating customers (and thus the market) with proper respect?  Where were the supervisory and audit functions in the organisations?

What we find most confusing of all is that if all that was required from management was a signature, why didn’t they use an automatic signature machine?  After all why pay people, and put up with all that unpredictability and emotion?

Talk to us, in confidence and without obligation about helping your managers develop the competence and confidence to manage effectively.  Solutions that engage, motivate and fit around, rather than disrupt the business.

* See www.ft.com 14/10/10

 

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