Posts Tagged ‘Add new tag’

Enterprise Risk and Psychopathic Employees

Saturday, October 1st, 2011

 

Star employee or Psychopath?

Star employee or Psychopath?

 

 

 

A  German[1] study has highlighted similarities in brain function between convicted and certified psychopaths, and traders.   Interestingly the traders were more concerned with reward and, “spent a lot of energy trying to damage their opponents”, compared to the prisoners.  Whilst the study was relatively small (27 traders and 24 psychopaths),[2] it would seem to be backed up by anecdotal evidence from, and recent events in, the banking sector.[1] 
 

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


Competence and Risk….. Pigeons coming home to roost!

Tuesday, September 28th, 2010

Are your pigeons coming home to roost?

The news that the Irish government is to wind up Allied Irish Bank, and in doing must consider the markets reaction and the impact on the Irish economy and government (and of course people), is perhaps an extreme example of the proverbial pigeon coming home to roost.

This one is very tatty indeed having been battered by forays, into the debt boom. If Anglo Irish Bank’s exposure to Quinn Insurance is indicative of a lack of effective risk management and associated management competence, it will be interesting to see what is in the balance sheet at Allied Irish.

The bubble made making money appear easy as the market surged upwards, everyone was a Super Hero – and the risk was managed by wonderful IT systems. But there is no substitute for competence – not just technical risk, but management (governance) competence. The ability to understand what staff are doing, (however arcane or black box it may appear), and when it is appropriate to challenge it, and to do so effectively are key competencies that are developed not innate. Business is still about people.

From the outside we cannot know the motivations, and positive actions that led AIB to build up such a toxic balance sheet. We may however seek to ensure that our own Super Heroes do not fall into the same trap and become homing pigeons.

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.

Intelligent, articulate, resourceful and angry….

Tuesday, March 31st, 2009

Tribunals are damaging enough in distraction and cost, however, the damage inflicted by Paul Moore, (Ex-Head of Group Regulatory Risk, HBOS) is in a different category. Moore’s evidence to the House of Commons Treasury Committee is interesting reading. Has the practice of ‘buying off’ employees with an accompanying confidentiality clause made organisations lazy? With the downturn making it hard for employees to move on, the financial and reputational risks of mishandling staff concerns are greater. With markets so challenging, why do organisations increase their costs and reduce their agility and customer focus by failing to nip potential problems in the bud?

? How functional is your performance management framework? Form heavy, impact light? Everyone assessed as mid to high?

? Do your team managers avoid ‘the soft stuff’?

Next steps

  • Talk to us about how to improve delivery of the hard ‘soft’ stuff – practical performance management skills.  And about improving the use and impact of your existing appraisal system.  performance@theperformancepractice.co.uk

Further thoughts – You might also be interested in:

The text of Paul Moore’s memo to the committee – http://www.ft.com/cms/s/0/fca6a706-f81d-11dd-aae8-000077b07658.html

  • Archives

  • Tags