Archive for October, 2011
Enterprise Risk and Psychopathic Employees
Saturday, October 1st, 2011

Star employee or Psychopath?
We understand the attraction of trading to those who may show psychopathic tendencies. It is an impersonal activity – a matter of spread sheets and automatic execution into anonymous markets. It offers all the excitement of gambling and computer gaming, with the real risks of the gamble being taken by the employer and apparently mediated by risk management software. It doesn’t require EQ skills.
However, we don’t agree that every trader fits this profile[3]. People who are extremely numerate may not have good EQ. Corporate cultures may reward and encourage what could be described as selfish behaviour[4]. Similarly the effort that went into destroying internal competitors may be the consequence of a failure of performance management. The real risk management issue is not purely individuals (or trading teams). It is both how the organisation assesses and manages performance, and the impact of the prevailing organisational culture on the development and display of these traits.
Psychopathic behaviour damages organisations. Sabotaging colleagues destroys team working, creating a hostile environment with an internal rather than market focus. The consequences include increased churn, with the real talent leaving. Once the realities of working in the organisation are known, attracting good candidates for employment becomes difficult. Promoted into management the damage is worse. Productivity of other teams will plummet as internal competition ‘hots up’, more talent will leave and actions for bullying and harassment will eventually surface. The inevitable resulting internal focus compromises competitive advantage and the organisation’s future.
Fortunately, the psychopath’s ability to blag and charm does not stand scrutiny from effective performance review. A key part of this is the review and feedback process itself. Ironically those who are best qualified to deal with the technical competencies in this population are unlikely to have the interpersonal skill sets to do so, and will feel most challenged by it. Given the risks, it is important that your managers are competent in their interpersonal performance management skills. Talk to us now about how to ensure your managers have the essential interpersonal skill sets to thrive at this challenging task.
[1] University of St Gallen: authors Pascal Scherrer and Thomas Noll
[2]The brain chemistry/mechanism that could be at play has been evidenced by research published by the University of Vanderbilt http://news.vanderbilt.edu/2010/03/psychopaths-brains-wired-to-seek-rewards-no-matter-the-consequences-109865/
[3] Psychopathic tendencies do not automatically mean that an individual becomes a psychopath. The difficulty is semantic, the association with criminality. As we have noted elsewhere, psychology and neurobiology are useful sciences to inform our interaction in the real world which is where organisations operate.
[4] See our ‘Hard Wired to Fail?’ www.theperformancepractice.co.uk/ideas-blog May 2011
Tags: Add new tag, Bad Science, Bullying, competitive advantage, culture of challenge, Enterprise Risk, ERM, governance, grievance, High IQ, Insurance, Intelligent Workforce, leadership, Learning and Development, performance management, reputational risk, risk management, Talent, Team, uncertainty, whistleblowing
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