Are psychopaths responsible for the financial crisis? Some think it's possible. It almost seems too easy to believe that we could end corporate corruption and excessive risk-taking if only we could root out a few "crazy" bad guys. It's also not very likely. Ample research (and experience) has taught us that perfectly normal and decent people can do pretty objectionable, even horrible, things under the right conditions (quintessential case in point: the Stanford Prison experiments). No need to be born a psychopath. Yet, the idea that psychopaths may be exerting influences on organizations and consumers could be a piece of the puzzle worth looking at. That is what I, along with marketing professor Dante Pirouz, are setting out to do, thanks to the generous support of the Ian O. Ihnatowycz Institute for Leadership. In the related blog below, Dante describes the side of the research that aligns with her interest in how psychopathic leaders influence consumer behavior. In another blog listed below, I describe the parts of our research that are more consistent with my discipline, organizational behavior. Here, I provide background on psychopathy and some interesting research that has already been conducted on its prevalence and influence in the corporate sector.
In the past, the study of psychopathy has been confined to the domains of criminology and psychopathology. It was always assumed that psychopaths were so deviant and parasitic that they would inevitably end up in the penal system. If they did end up in business, they would be the hucksters, the cons, the slick-haired guys peddling olive oil as a cure-all to people in retirement communities. They'd be easy to pick out and easy to avoid. Certainly, they would not be executives.
Not so. In a study of 203 managers and executives labeled as "high potential" by their organizations, a team of researchers led by Paul Babiak found that 3% met the cutoff for psychopathy on the Psychopathy Checklist-Revised, a measure originally developed by Robert Hare , arguably the father of modern psychopathy research. Another 5.5% scored within the range signaling a strong potential for psychopathy, what some researchers call "subclinical psychopathy." Those numbers don't seem like much to worry about. But compare these percentages to those found in diverse community samples. In one large-scale community sample, only 1.2% scored in the subclinical psychopathy range (compared to 5.5% in the corporate sample) and 0.2% scored as psychopathic. To put things further in perspective, criminological researchers have documented steep costs to society caused by psychopaths, even given the small rates of psychopathy found in general community samples.
The average psychopathy score in the corporate sample was lower than that in the community sample, suggesting that the average manager is less psychopathic than the average person in general, but a larger proportion of the pool of managers is psychopathic or sub-clinically psychopathic. There must be fewer people in the middle range in corporations, which suggests to me that the managerial ranks of these companies are populated by mostly reasonable, conscientious, upright people struggling to work productively with a handful of manipulative, abusive, and dishonest colleagues because those in the latter group have somehow convinced upper management that they, too, are rising stars.
Whether my interpretation is correct or not, the point is that all psychopaths are not on the streets or in prisons. Some of them are in corner offices and boardrooms or are climbing the ranks to these top spots. My next post discusses the implications of this, but it is first worth taking a moment to talk about what psychopathy is.
Psychopathy is a multi-faceted trait. People high in psychopathy tend to be narcissistic and dishonest, lacking in empathy, fail to accept responsibility for their actions, are abusive and parasitic in their relationships with others, shun planning and goal-setting, and are impulsive in their behavior (although some research suggests that lower impulsivity differentiates between psychopaths who end up in prison and those who end up doing fairly well in a conventional sense). Despite this laundry list of negative traits, psychopaths tend to be charismatic. They are the ones who can screw everything up and somehow convince the world - or at least a few key people - that other people or forces beyond their control were responsible. That's why it's no surprise that, although Babiak et al. found that higher scores on psychopathy were associated with lower performance evaluations, the high scorers had still managed to be tapped for grooming into higher level positions. Despite the widespread negative perceptions of psychopathic managers by their immediate colleagues, reflected in 360 degree evaluations, they were believed by upper-level decision makers in their organizations to be delivering considerable value. My research is intended to begin developing an understanding of why this happens.
Charlice Hurst, Assistant Professor, Organizational Behaviour (Ivey)
Related Blog - Leaders Who Exhibit Psychopathic Characteristics