Are You Working For a SOB?

The debauchery-laden film by Martin Scorsese, The Wolf of Wall Street is a prime example of financial corruption, excess, and corporate greed.

It’s the rags to riches to rags story of a hotshot, real-life New York stockbroker, Jordan Belfort, who conned his way through life, starting at the bottom of the Wall Street pecking order and (in the 1990s) ended up making millions selling worthless stocks. He succeeded in acquiring large amounts of stock with minimal public disclosure, to subsequently pump up the price and sell it, providing him (and a group of insiders) with large profits while public investors were the losers. Belford’s story is also a tale of complete disregard for others, of careless spending, and of a raging drug and prostitute habit. His enormous success and affluence gave him the title “The Wolf of Wall Street.” But in 1994, the fairy tale ended, with Belfort being banned from the securities business for life, and being sent to jail for fraud and money laundering.

In cases like Belfort, it isn’t always easy to distinguish between corporate genius and psychopath. Frankly, it’s often a thin line that divides them. Some of these people rise to astonishing heights, but in the process they cause enormous damage. They can poison the workplace, putting the health of both their companies and staff at risk.

People that behave in such manner are what I call SOBs, for “Seductive Operational Bullies.” Without going so far as to commit murder or arson, but unburdened by the pangs of conscience that moderate most people’s interactions with others, such people qualify for the label of “psychopath lite.”

These SOBs can be found wherever power, status, or money is at stake. Outwardly normal, apparently successful and charming, their inner lack of empathy, shame, guilt, or remorse, can have serious interpersonal repercussions, and can destroy organizations. Their chameleon-like qualities mean they often reach top executive positions, especially in organizations that appreciate impression management, corporate gamesmanship, risk-taking, domination, competitiveness, and assertiveness. Unfortunately, however, SOBs have no loyalty to their colleagues or their organization.

For reasons of our own self-protection, it’s wise to accept that a small portion of the population has a psychological makeup and mindset very different from the rest of us. Though they possess within themselves a great destructive proclivity, they can blend in and assume a kind of stealth position within organizations and society. To make matters even worse, they may not realize that they are different. Their lack of conscience means that the usual tools for societal regulation are irrelevant and don’t work on them. The implication is that these people often bring havoc to the lives of others.

We need to remind ourselves that psychopaths have always been around. Many historical figures that committed crimes against humanity fall within this category. Most often, we come across psychopaths in popular fiction and films. These morally depraved individuals represent the “monsters” in our society, inevitable and incorrigible predators whose crimes are calculated and emotionless. But only a small subset of psychopaths turns into violent criminals. What we need to realize is that there exist many less extreme forms of psychopathy. Not all psychopaths are destined for prison; some may reach top executive positions. The games that typify organizational life come naturally to them. Compared to the monstrous historical and fictional characters, these people are not blatantly violent or antisocial; their disturbing behaviour is not so in your face. Instead, they are likely to channel their energies in less obvious, less violent ways.

Greed, ambition and selfish disregard for others are nothing new in business. But for their own self-preservation, companies should do more to guard against such people, either by identifying them and weeding them out, or by avoiding hiring them in the first place. I do realize, however, that SOBs can be hard to spot, due to their manipulative personalities. Because of the way they operate, however, they are often “hidden in plain sight.” Ironically, many of the qualities that indicate mental problems in other contexts may appear appropriate in senior executive positions. But they often do long-term damage to both through their deceitful, abusive, and sometimes-fraudulent behaviour.

Exactly what makes a psychopath is still open to discussion. If we construct a spectrum of pathology, “heavy” psychopaths, fictional and historical, weigh down one end of the spectrum while the often-successful psychopathic “lite” executives sit at the other. Unlike fundamental psychopaths, born without the capacity to form emotional bonds (due to possible genetic abnormalities), “lite” psychopaths experience a deactivation of the development of basic affective patterns (due to the interplay of nature-nurture). In their case, developmental forces have played a more significant role. Their capacity for empathetic response may have been incapacitated due to repeated disillusionment in their childhood, caused by physical or sexual abuse or other forms of maltreatment. Over time, these negative environmental experiences may have led to the deactivation or poor repair of normal human emotional , neurological pathways, resulting in psychopathic behaviour patterns. In later life, affective inhibition can have serious consequences, particularly if psychopaths function on a larger stage—like organizations or society.

Estimates vary, but approximately 3.9 per cent of corporate professionals can be described as having psychopathic tendencies, a figure considerably higher than is found in the general population. From these observations we can deduce that many people working in organizations have a fair chance of having an experience with a pathological boss. Unfortunately, most people working for SOBs lack the knowledge and skills to effectively respond and deal with them. Either they don’t understand the cause of their problems, or they don’t know how to fight back. To make matters worse, these SOB executives usually have the dedication, focus and business acumen to create the appearance of success. The weapons these people use to succeed include emotional blackmail, dishonest yet persuasive language, discrediting others around them, deflecting the issue at hand when confronted; concealed threats; and lies or distortion of the facts. These SOBs have mastered the art of manipulation disguised as helpfulness, good intentions, or working “for the good of the company.” They are very talented at hiding their true motives, while making others look incompetent, uncooperative, or self-serving. But the only thing that counts for these people is to win. They prey on people’s emotional vulnerabilities. They also shine in situations that call for “tough” and unpopular decisions such as to lay off staff. In particular, the financial sector has become a playground for such people, because “that’s where the money is.”

So what can be done to prevent such people can causing havoc? Ideally, organizations should fine-tune their recruitment procedures in order to avoid hiring them in the first place. To help managers recognize them, there are a number of clues:

Does the person come across as too glib and too charming? Do they lack in shame, guilt or empathy? Are they sexually promiscuous? Are they chronic liars? Does the end always justify the means? If the answer is yes to more than a few of such questions—and the list goes on—then the chances are that you are dealing with an SOB.

There are some lines of defence, however. If you haven’t yet hired the person there is still time to avoid trouble. For example, it’s worthwhile to take a closer look at the résumé and scrutinize it for inconsistencies. Try putting the candidate through multiple interviews. SOBs have a tendency to tell interviewers what they think they want to hear, and different interviewers can elicit different, sometimes contradictory, responses.

But what if the SOB is already on your staff? The best line of defence then, is a coaching culture where trust and openness prevail and where people can speak their mind. But prevention is really the first line of defence. To make that happen, you need to identify the SOB. Watch out for behavioural clues. If you see talented people leaving a project or a company, find out why. A red flag should go up if there are glaring discrepancies between how direct reports and junior employees perceive an executive, and how their peers or boss perceive them. Lower-level employees are often on the receiving end of an SOB’s psychopathic behaviour and usually spot a problem much sooner than senior management. To ensure accountability, try introducing key performance indicators clearly tied to outcomes. It’s also important to encourage teamwork, as that’s something that psychopaths don’t feel comfortable with. And take steps to develop a corporate culture in which junior employees are able to express concerns about their colleagues and superiors without fears of recrimination.

Finally, if you are so unfortunate as to have an SOB as your boss or even as CEO of the company, recognize that you are unlikely to be able to get him or her to change. Trying to oust the SOB is likely to be difficult and attempts to do so might jeopardies your own career. The best advice is not to stick around but to cut your losses, and move on.

Manfred Kets de Vries is the Distinguished Clinical Professor of Leadership Development and Organisational Change at INSEAD, France, Singapore, and Abu Dhabi. He is also a psychoanalyst. He is the Founder of INSEAD’s Global Leadership Centre. Furthermore, he is the author, co-author, or editor of 49 books and more than 400 articles. He is program director of INSEAD’s top management program “The Challenge of Leadership.” He is a member of seventeen editorial boards. He is a Fellow of the Academy of Management. In addition, he is the recipient of the International Leadership Association’s Lifetime Achievement Award for his contributions to leadership research and development. He also received a Lifetime Achievement Award from Germany for his contributions to executive education. Furthermore, he is a founding member of the International Society for the Psychoanalytic Study of Organizations (ISPSO), which has made him a lifetime member. The American Psychological Association has given him the “Harry and Miriam Levinson Award” for his contributions to the field of consultation. In addition, he has received the “Freud Memorial Award” for his contributions at the interface of management and psychoanalysis, and the “Vision of Excellence Award” from the Harvard Institute of Coaching. INSEAD made him the first beneficiary of the INSEAD Dominique Héau Award for Inspiring Educational Excellence. Furthermore, he is the recipient of two honorary doctorates. The Financial Times, Le Capital, Wirtschaftswoche, and The Economist have all judged Manfred Kets de Vries as one of the world’s leading thinkers on management.