Failed and Flawed Leadership
and Ethics Violations:
The White Collar Psychopath
A rose by any
other name…
Whether called “white-collar
psychopath, successful
psychopath”, or “corporate
psychopath,” these all describe
a person who narcissistically
conducts business with deceit,
manipulation, charm, and
predatory behavior while being
unremorseful and unempathic
of the impact on others or
ethical standards.
Organizations value and
reward people who have
charisma and can inspire
others, have a “can-do”
attitude (regardless of
methods), and are able to
think strategically and even
manipulatively
http://www.leadershipnow.com/leadingblog/leadership_development/
Characteristics of personality disorders include:
• Self-centeredness that manifests itself through a
me-first, self-preoccupied attitude.
• Lack of individual accountability that results in a person
blaming others and society for their problems.
• Lack of perspective-taking and empathy.
• Manipulative and exploitative behavior.
• Unhappiness, suffering from depression and other mood and anxiety
disorders.
• Vulnerability to other mental disorders, such as obsessive-compulsive
tendencies and panic attacks.
• Distorted or superficial understanding of self and others' perceptions,
being unable to see his or her objectionable, unacceptable, disagreeable, or
self-destructive behaviors or the issues that may have contributed to the
personality disorder.
• Socially maladaptive, changing the rules of the game, introducing new
variables, or otherwise influencing the external world to conform to their
own needs.
http://www.mentalmenace.com/personalitydisorders.php
“Successful” or
White Collar Psychopathy?
• Andrew Fastow, formerly of Enron,
stands accused by an American court
of taking $30 million in kickbacks
from the company while its
shareholders lost more than $70
billion
• Bernie Ebbers of WorldCom
arranged for his telecom company to
lend him $408 million as it went
toward bankruptcy
• John Rigas, founder of Adelphia
cable TV, built a $13 million golf
course for himself while
shareholders lost $60 billion in
investments
Psychopathic features and their positive corporate labels
Psychopathic Dimensions
No conscience
Aberrant self promoter
No fear
Lies and schemes
Thrill-seeking
No guilt or remorse
Grandiose self image
Cold-hearted
Glib, superficial charm
Severs ties with those no longer useful
Exaggerated promises
What is considered as indications
of pathology in some settings…
Corporate Label
Gets the hard jobs done
Makes an excellent first impression
Shows courage and steadfastness
Strategically-minded
Risk-taker
Can live with tough decisions
Confident, knows self worth
Objective, analytical
Networks well
Move up hierarchy without loyalties
Visionary
…is recognized and rewarded as skilled,
competitive, and “action-oriented” in
other settings
Wexler, M. N. (2008). Conjectures on systemic psychopathy: reframing the contemporary corporation. Conjectures on
systemic psychopathy: Reframing the contemporary corporation. Society and Business Review, 3(3), 224-238.
Corporate officers
with psychopathic
features?
John Rigas
Adelphia
“Chainsaw” Al Dunlap
Sunbeam
Bernie Madoff
Financier
Bernie Ebbers
WorldCom
Kenneth Lay & Jeff Skilling
Enron
Leona Helmsley
Hotelier
Dennis Kozlowski
Tyco
Sam Waksal
Imclone
Jordan Belfort
“The Wolf of Wallstreet”
Deutchman, A. (July, 2005). Is your boss a psychopath? Fast Company, 96, 44ff.
Jack Abramoff
Lobbyist
Tom Petters
MN Ponzi scheme
In a study of 200 executives from eight international
companies, 3.5% were found to have psychopathic
personalities (that’s
The psychopathic personality (PCL-R)
1.
Glibness/superficial charm (1)
2.
Grandiose sense of self-worth (1)
3.
Pathological lying (1)
4.
Cunning/manipulative (1)
5.
Lack of remorse or guilt (1)
6.
Shallow affect (1)
7.
Callous/lack of empathy (1)
8.
Failure to accept responsibility for own actions (1)
9.
Need for stimulation/proneness to boredom (2)
10.
Parasitic lifestyle (2)
11.
Poor behavioral controls (2)
12.
Early behavior problems (2)
13.
Lack of realistic, long-term plans (2)
14.
Impulsivity (2)
15.
Irresponsibility (2)
16.
Juvenile delinquency (2)
17.
Revocation of conditional release (2)
18.
Promiscuous sexual behavior (T)
19.
Many short-term relationships (T)
20.
Criminal versatility (Hare, 1986) (T)
Factor 1: Callous emotional and
interpersonal detachment;
affective impairment
Most corporate psychopaths
score more on Factor 1 than 2
?
Factor 2: Chronic and socially deviant
antisocial behaviors & lifestyle
http://www.softpanorama.org/Social/Toxic_managers/psychopath_in_the_corner_office.shtml
Unlike the criminal or antisocial psychopath, the white-collar psychopath
usually does not engage in violence or direct criminal behavior. Instead,
they operate through glibness, manipulation, deceit, and with a lack of
remorse or guilt
http://en.wikipedia.org/wiki/Psychopathy
Labour’s estimated impact of psychopathy on the organization
• 25% of all resignations are due to the effect
of a corporate psychopath
• 50% of all stress leaves are related to or
caused directly or indirectly by a corporate
psychopath
• 25% staff turnover rate is the norm for
psychopathic managers
• Each victim of a psychopath is out of pocket
$10,000
• The community is out of pocket to the tune
of $5000 per victim
Gilbert Labour is an executive coach and bases his estimates on 30 years experience
http://www.psychopath-research.com/forum/ubbthreads.php/topics/1074/2/Corporate_Psychopaths
Stages of
progression of
the corporate
psychopath
through the
organization
Ascension
And finally, there is the betrayal of the patron and the promotion
into the patron’s job.
Abandonment & Confrontation
At this stage, the pawns are abandoned when they are no longer
considered of use. The psychopath stops talking to people who
previously thought they were friends with the psychopath.
Manipulation
The manipulation stage is where they start to create conflict among their coworkers – the pawns – often through a campaign of disinformation. When in
conflict, people don’t talk to each other – a perfect environment for the
psychopath. At the same time, the psychopath will continue to groom the patron,
often their direct boss, as a means of protection and defense.
Assessment
The assessment stage is the honeymoon period where the psychopath will establish an
influence network normally based on one to one interaction with individuals – what is
described as the ‘Psychopathic Bond’. The Psychopathic Bond is based on lies and
manipulation and the ability of the psychopaths to analyse the victim’s expectations and
desires. At this stage, the psychopath will identify ‘pawns’, ‘patrons’ (bosses and those
with power) and the ‘police’ (HR and accounting departments). One thing to note –
psychopaths don’t like group meetings where it is more difficult to manipulate people.
Organizational Entry
Psychopaths tend to be very adept at the entry and interview stage. They are confident,
charming, have no qualms lying and say whatever it takes to get the job.
Babiak, P. (November 12, 2008). Psychopaths in the boardroom. 2008 Meyler Campbell Annual Lecture, Royal Society of Medicine.
how an individual
sees oneself and
attitude toward
others
Personal Style
Insincere
Arrogant
Untrustworthy
Manipulative
understanding of
feelings and emotions
of self and others, and
how they are used in
the business setting
Interpersonal Relations
Insensitive
Remorseless
Shallow
Blaming
what is required to
be a contributing
member of an
organization
Organisational Maturity
Impatient
Erratic
Unreliable
Unfocused
Parasitic
effectiveness of
one’s interaction
with others
Antisocial Tendencies
Dramatic
Unethical
Bullying
The B-Scan
Inventory
Reducing Psychopathy and the
Cultures That Enable Them
• Conduct extensive background, assessment and interviews for
people in leadership positions or aspiring to such.
• Conduct regular performance reviews that examine prosocial and
antisocial behavior
• Document abuses over time to show a pattern of behavior
• Model prosocial and ethical behavior from the top down the
organization
• Annually review the organizational culture and the behavior that
indicates transparent and hidden indicators of what is valued
• GroupThink is likely with highly cohesive leadership teams; use
countermeasures to reduce the risk (e.g., devil’s advocates at
meetings, invite external experts to observe and feedback, etc.)
• Build a strong, diverse, and well-informed Board of
Directors/Trustees to balance administrative leaders
More recommendations…
• Have more group involvement at the interview stage; psychopaths tend to
prefer individual interviews that they can control
• Obtain documentation for claims and have follow-up phone confirmation
• Listen to what people say and diligently follow up on accusations
• Corroborate information from multiple sources
Machiavellianism: Assessing
manipulative and deceptive styles
• Niccolo Machiavelli, 16th century Italian statesman, first
described the need for leaders to be deceptive and manipulative
in order to control the state
• Richard Christie and Florence L. Geis in the 1960s formulated a
questionnaire (the Mach IV) based on Machiavelli’s book, The
Prince. This is a widely used test for this trait.
• Although there are important differences between tendency to
manipulate and psychopathy, beliefs about deception are a
central factor in psychopathy
• However, many prominent strategic leaders continue to
conduct themselves according to Machiavelli
• You can take the Mach IV to see how you would score on the
test. Caution—do not draw general conclusions about yourself
based on single sources of information such as self-tests.
However, it can help you explore this aspect of your leadership
style
Niccolo Machiavelli
Additional readings of interest
• Machiavellianism and ethical computer use—
• Managing intellectual property & IT security: The fear-driven workplace
• Leader emergence and ethical attitudes
• Is your boss a psychopath?
• The IS Machiavelli
END
Psychopaths have lower
activity of the amygdala
(emotional arousal)
during emotional moral
decision making. This
reduced activity was
also found to be related
to each of the four
areas of psychopathy.
For these individuals,
other brain areas
showed reduced
efficiency during moral
reasoning.
http://neurologicalcorrelates.com/wordpress/2009/03/02/white-collar-psychopath-fraudfeasors-who-use-other-peopleas-tools-for-conning-duping-manipulating-and-perpetrating-fraud-brain-scan-study-does-a-broken-moral-neural-circuitexcuse-evil/
Problematic Personality Disorders in the Workplace
Antisocial
Often a subject of rule violation and disciplinary actions. May become involved in
altercations or physical violence with co-workers or launch into verbal attacks on supervisor
and then claim harassment or discrimination when disciplined for it
Borderline
Adept at creating scenarios leading to own victimization. May sexualize interactions then
complain of harassment. May act seductively toward supervisor, then become enraged and
bring harassment complaint if rejected
Dependent
Endure abuse by supervisor and co-workers, failing to use internal mechanisms to complain
of harassment or discrimination
Histrionic
Dress flamboyantly or provocatively, or address flirtatious innuendos to supervisors or coworkers, then react with surprise and harassment complaint when reacted to. May handle
stressful situations poorly.
Narcissistic
Self-centered & imperious , perceiving personal slights in neutral situations. May react with
rage with career setbacks such as demotion or termination, and respond with aggression or
legal action directed at some perceived culprit. Insensitivity of needs of subordinates may
lead to increased turnover and eventually failure as a manager
ObsessiveCompulsive
Difficulty interacting with peers who find rigid perfectionism difficult to accept. Often fails
as a manager due to insisting that subordinates meet impossible standards.
Paranoid
Often finds malevolent meaning in innocent actions. May perceive unfavorable
development to be rooted in discrimination or part of a plot. Spread rumors & gossip ,
creating dissention & apprehension among co-workers
http://www.psychiatrictimes.com/display/article/10168/48556