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|In: Business Ethics|Last Updated:

Ever wonder how they sleep at night?

Business executives sometimes have to let people go. Sometimes they have to lay off large numbers. There are occasions when companies have to push employees hard — to work long hours and extra days without any more pay.

It happens. The future being somewhat less predictable than the past, strategies don’t always turn out to be wise and tactics sometimes backfire. New leaders sometimes come in to find a predecessor has allowed a culture of mediocrity to develop, and with it the accumulation of too many employees, and too many of them with less-than-superb talent.

Business leaders sometimes do have to make hard choices. When the situations arise, the good ones do. That isn’t the question.

The question is whether they sleep well afterward; whether they accept large bonuses and option awards for doing so; whether they take joy in the exercise, as many employees suspect.

It turns out that many of them might.

KJR Club member Paul Novelli pointed me to an article by Alan Deutschman in the July 2005 issue of Fast Company recently, describing the research and conclusions of criminal psychologist Robert Hare.

Dr. Hare is widely known in his field for developing the “Psychopathy Checklist” — a twenty-item personality evaluation that’s the gold standard among law enforcement professionals for the diagnosis of criminal psychopaths. Dr. Hare has reached a disturbing conclusion: Many CEOs are borderline or more-than-borderline psychopaths. He suggests that boards of directors should screen CEO candidates for psychopathy — the absence of empathy, compassion, remorse and guilt.

I hope it never happens. In the modern world of business, if boards of directors were to apply the Psychopathy Checklist to CEO candidates, many would use it to identify those best suited for the job. They’d use it, that is, to systematically exclude candidates exhibiting capabilities for empathy, compassion, remorse and guilt. While conventionally regarded as useful personality traits, they can interfere with the successful operation of a modern publicly held business.

Enterprises compete globally. Among their competitors are companies whose strategies and tactics aren’t constrained by empathy, compassion, remorse and guilt, and which acknowledge responsibility only to shareholders — not to employees, customers, or the communities and nations within which they operate. Even their obligation to the law is limited to a comparison between the cost of compliance and the cost of the fines for noncompliance. (Don’t agree? Research Union Carbide’s track record in Bhopal.)

There have always been amoral corporations. What’s new is that behavior we’d consider psychopathic in a human being is business as usual in business. So when a company competes with psychopathic rivals and doesn’t adopt a similar stance it’s like trying to adhere to the Marquis of Queensbury rules in a knife fight.

Here’s a challenge for you, as chief information officer or as a manager who would like to become a chief information officer: According to Dr. Hare, chances are good that at some point in your career you’ll find yourself working for a borderline or more than borderline psychopath. Can you handle that kind of situation?

The easier (but still hard) version of the question is associated with those business leaders who harm shareholders — the Bernie Ebbers and Chainsaw Als of the executive suite. Harming shareholders is universally recognized to be Bad, so at least the situation is clear.

There are also many business leaders, at all levels, who exhibit more psychopathy than you might personally find comfortable but who don’t express it in ways that break laws or harm shareholders. If you report to them, you might find yourself dealing with abusive behavior, unreasonable demands on your staff, shoddy practices toward customers, assignments or explanations given to you that deliberately conflict with those given to other managers, or any of a number of other circumstances that break no laws.

The question used to be what you should do if you find yourself working for a bad boss. Dr. Hare has just raised the stakes, by letting us know some of these bad bosses are, clinically speaking, psychopaths. Bad boss or psychopathic boss, if you’re looking for the answer here, you won’t find it, because there is no “the answer” — leave, perhaps, assuming you have alternatives. In a large city you probably do. In a smaller community you might not. Not that leaving fixes anything beyond your personal circumstances. And where will you go, when managers are, in increasing proportions, required to behave psychopathically?

Businesses are, increasingly, psychopathic entities. According to Dr. Hare, many have psychopathic leaders.

One wonders which came first.

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|In: Business Ethics|Last Updated:

In boot camp, the military first starves recruits to get rid of their flab. Then it feeds them to build muscle.

Or at least, that’s what I’ve read in various fictional accounts. Not having had the pleasure, I can confirm neither the truth nor the efficacy of this technique. It’s remarkably similar to one I don’t particularly like, but whose efficacy I must admit, for shaking the dust off a complacent organization: Shrinking it through layoffs, then gradually adding the staff necessary to create a newly effective organization.

Among the hallmarks of a complacent organization is the accumulation of second-rate and third-rate employees. You know who I’m talking about. Second-raters just barely pull their weight. Third-raters don’t even do that, but have perfected the ability to hide behind the few strong performers who produce most of the organization’s results. How does this happen?

Complacent leaders hire placeholders who, on paper, have the right skills and who, in their interviews, make it clear they won’t rock the boat. Hiring happens quickly so the hiring manager can go back to sleep. Then the few strong performers, who already have a well-developed bad habit of carrying everyone else, will carry the new faces as well. It’s just business as usual.

And in you come, ready to get your motor running and head out on the highway. What are you going to do? Surgically remove the second and third-raters one at a time?

Which is why the starve-then-feed method is both popular and effective. It’s quick, and it avoids the overwhelming effort needed to document termination-worthy performance one employee at a time. Which in many cases won’t be possible, as many of the employees who need replacing perform at a level that’s just good enough, and report to managers who are incapable of distinguishing good enough from better.

This makes the starve-then-feed gambit hard to argue with. It’s distasteful, but sometimes it’s the only practical tactic.

If you’re in this situation and see starve-then-feed as your only practical option, please … retain and lay off based on merit, not seniority. The whole point is to raise the bar after all. Make it your choice, not an opportunity to volunteer for a generous severance package.

But take the following steps before you do. They’re essential to making sure the organization survives the experience:

  • Develop effective means for communicating directly with the IT staff — listening to them, informing them, and persuading them. Don’t rely on your chain of command. It’s a big part of the problem. It certainly won’t transmit ideas in either direction with high fidelity.
  • Define the desired change in culture, and start the process of culture change. You need a clear picture of where you are now, and a precise description of the change you’re about to undertake. If you don’t, you’ll find yourself overwhelmed with case-by-case decision-making, which inevitably you’ll make in inconsistent ways that cause you to undermine yourself. When you can articulate what you want, start the program. Everything that’s going to happen must fit the design of the desired culture, not the old one.
  • Replace your problem managers. There’s a reason the organization has accumulated so many ineffective employees — the people who hired them and kept them on. Leave the same managers in place and they’ll simply replace the old group of ineffective employees with a whole new group of employees just like their predecessors, except the new ones also lack deep knowledge of your company and its systems.And by the way: One of the most important reasons for developing direct communication channels with staff is that you’ll be replacing many current managers — the existing chain of command.
  • Preserve critical staff. Remember those few strong performers who are carrying everyone else? You can’t afford to lose them. Identify them, develop personal relationships with them; promote those who are looking for that kind of opportunity; give them raises; and let them know — overtly and without any tiptoeing around the subject — that you consider them essential to the organization.
  • Give everyone a chance, but not a lot of breathing room. Managers first: Some have been itching for a chance to lead well but have been stymied by the old leadership and culture. That goes for the staff even more. They deserve a chance.It’s a fine balancing act, though. If you give them too much of a chance, you’ll find yourself reinforcing the old culture instead of promoting the new one.

On the other hand, if you don’t give them any chance you’ll unnecessarily jettison important skills, organizational knowledge, and loyalty. Replacing that will cost a lot. Not only that, but by providing opportunities to succeed, you’ll have fewer sleepless nights yourself.

Think of it as enlightened self-interest.

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