Posts Tagged ‘reputational risk’

Reflective Space: Using New and Social Media (N&SM) as a Business Tool

Tuesday, January 29th, 2013

Making Virtual Relationships Real

The web has revolutionised how we live. It offers more information, more contacts, and more business relationships across more geographical areas than imaginable. The potential is enormous.

We are persuaded that by buying the services from social networking websites we will transform our working lives. These ‘treasure chests’ of job and contract oppor-tunities are enticing. But how can we capitalise on them?

How do we sell ourselves and our companies in this brave new world? How do we make that virtual re-lationship real?

Who should attend?

The meeting is of particular interest to social media, IT, Sales, Marketing and HR professionals.

Format

The IQEQ network offers a stimulating, relaxed environment for peer to peer learning. Chaired to en-sure productive use of time, the group explores the EQ and IQ balance of optimal staff and company performance. The meeting is jointly hosted by Ann Todd (MBA, PGcert Psychotherapeutic Supervision and Adult Learning) Founder of IQEQ Network, and Martyn Wright (Director of HR Recruitment) of HYF,

Emperor Rupert and Prince James – A master class in Competitive Advantage?

Wednesday, April 25th, 2012

Illustration: Truth and LieThe trouble with Faustian Pacts is that sooner or later you pay for the privileges provided.  Was it naivety or a deliberate decision on the part of our politicians to do a deal?  Levinson makes fascinating watching as the extent of News Corps’ influence is revealed.  That interest is beyond merely media and government sectors. 

In our increasingly international markets the ethics and values of competitors differ, adding significantly to the complexity of managers’ task.  Some practices are culturally based such as the dormitories of the Apple subcontractor which allow hours to be adjusted according to product launch requirements.  We might also include the use of forced or indentured labour and the lack of a safe working environment.  The legal frameworks of national markets also differ, some having a much clearer and equitable application of the rule of law.  Whatever the basis, lower costs of production give competitive advantage.  

How do organisations compete when competitors gain super profits from illegal or culturally unethical practices?  The good news is that it is possible to fight back; it takes intellect, courage and a holistic plan.  It takes above all the ability to think through the likely consequences of actions – including the consequences of accepting too quickly siren invitations from very persuasive and apparently charming individuals and corporations.  This requires reflection – which requires time and practice – as well as a guiding management culture that is clear about values and the reason the organisation holds them.   

What would your organisation look like if you were able develop this skill in your managers?  What would stop them repeating what used to work and think about and implement new behaviours that work now?  

Don’t miss out, talk to us about how others have benefited from our expertise in developing thoughtful practice in managers that enable them to drive performance and leverage new opportunities – without the Faustian Pacts.

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


‘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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