Written by Nick Ryan
here are many ways of dealing with extreme stress at work: chatting around the water cooler with colleagues or sharing the odd drink after hours often does the trick.
The mind, however, also has its own unconscious methods of shutting out aspects of work that can otherwise lead to intolerable anxiety. This helps distance oneself from overwhelmingly bad feelings, such as jealousy, insecurity and anger. However, these coping methods can create more problems than they solve because to varying degrees they all depend on a distortion of reality.
These defence mechanisms might take an optimistic form, with someone rationalising that a situation is not as bad as it actually is. At the other end of the continuum are more destructive responses, such as denying the existence of a problem. Another common coping method is blaming others for problems rather than admitting to responsibility that could leave one feeling guilty or bad about oneself.
Kerry Sulkowicz, a psychoanalyst and founder of the Boswell Group, a New York business consultancy, says these are unconscious choices, determined by an individuals psychology and the nature of the stress: A problem with these defences is that ultimately they break down. They cant last for ever and the longer they persist, the worse the consequences may be for the individual because time is passing them by and opportunities for change may be lost.
An example comes from a founding chief executive who is charismatic and effective in attracting business, but is unable to deal with the stress of making critical decisions about his staff. As a result he has a bloated team of high-paid people who do very little. He is in denial, not of the dire straits that his company is in, but of his role in its impending collapse. He does not see that his inability to make tough personnel decisions and ultimately hand over control to a new CEO is crippling the company. Instead, he projects the problems on to his antagonised board of directors and rids himself of responsibility.
His inability to hear any negative feedback is indicative of another defence mechanism, known as splitting, where people and the news they bring become factors that either make him feel good or bad about himself. While the bad are rejected, the good are rewarded with loyalty.
People such as this CEO cannot tolerate the tension and confusion arising from complexity. The danger is that they trash differing opinions and ignore essential information.
His team in turn employ coping methods for dealing with their conflicting feelings towards the CEO of dependency and admiration on the one hand, and anger and contempt on the other. The healthy ones know this is a dying business and prepare to leave, while others rationalise why they should stay he does bring in business after all and the less aware deny that a problem exists.
Avoiding stress by distorting reality through such psychological defensive measures can also play a detrimental part in financial decision making. David Tuckett, a psychoanalyst and professor at University College London, and author of Minding the Markets: an Emotional Finance View Of Financial Instability, describes how this can lead to a failure to take in crucial information about a particular investment.
According to Prof Tuckett, people can become dismissive of inconvenient evidence because somewhere in their minds, beyond immediate awareness, they feel uncomfortable about the decision they are making but cannot bear to explore further.
He explains: They try not to take in the information because the information is not just information, it creates feeling. It creates anxiety, it creates a sense of risk of loss, or guilt in case they get it wrong, so they try to get rid of it. The more they get rid of it, the more [it] potentially creates a bigger loss in future.
These defence mechanisms originate in childhood and are often the only protection a child may have against the onslaught of perceived threats, such as being rejected or treated unfairly. People carry these unconscious strategies into their working lives, and even though they may be immature reactions to adult problems, they help people maintain a fantasy that life is predictable, benevolent and free from horrible feelings.
This was the case for one man in marketing and sales who came from a reserved, repressed family where strong emotions were never discussed, and self-confidence not encouraged. This left him dissociated from powerful feelings that he could not deal with, such as rivalry and resentment.
Although in many ways he became an ideal employee, never challenging authority or becoming a threat to colleagues, he missed out on his own career advancement and the satisfaction and sense of triumph that comes from such progression.
He reflects on his career: I lived my working life in a state of numbness, drifting through it in a trancelike state, going through the motions and not really reacting to people. Because youre shutting out your own feelings, youre more cut off from colleagues and managers, and certainly you cant read people as well.
Theres a large amount of regret. Not so much that I didnt climb the greasy pole enough, but that I ruled myself out from jobs and experiences that could have fulfilled my potential. But to be ambitious was to put me in line for disappointment and rivalry, feelings I couldnt cope with.
Certain situations, however, are so stressful as to break through any psychological defences, leaving the person overwhelmed with anxiety and unable to make sense of, or manage, the onslaught of confusing events. A sense of worthlessness and loss of confidence prevail, and confirm the worst fears one has of oneself.
This was the case for a woman in banking who found herself confused and unable to think rationally when faced with repeated accusations and threats from a bullying boss. She says: The most difficult bit was that I could never get it right. I focused on trying to please him and his requests just to protect myself from the explosions and confrontations. This erased any spark and energy I had. I started to doubt myÂself, which eventually affected my perÂfÂormance, my self-esteem and health.
With guidance, she was able to reconnect with her better qualities and positive attitude. Looking back, I am astounded to reflect on my situation and how badly I was affected, she says. It seems like a bad dream, Im sure I will carry a scar for all my life, but it is good. It will remind me to protect myself better in future.
The writer is a psychotherapist and this article is based partly on her clinical experience. To contribute to her forthcoming piece on the effects of business travel on workers and their families, please contact firstname.lastname@example.org
By Naomi Shragai
Dov Charney is not planning to fade into the California sunset. The controversial founder of Los Angeles-based American Apparel, whose board announced last week that it was stripping Charney of his chairman’s title and intended to fire him as CEO “for cause,” said in a regulatory filing late Friday that he is working with an investment firm to boost his stake in the company as he fights the board’s move to oust him. He also said he planned to continue talking with shareholders about potential changes to the clothing brand’s board and management. In a filing earlier in the week, he had said he would contest his termination “vigorously.”
Since the board’s announcement, several accounts have chronicled his ouster with more detail than tends to publicly air when a CEO is fired. Charney’s termination letter has even been published online, in which the board cites his failure to stop an employee from creating “false, defamatory and impersonating blog posts” about former employees, as well as misuse of corporate assets. (His lawyer has called the accusations “baseless.”)
But while Charney’s example may stand out for its lurid details and the public nature of the fight, governance experts and psychologists who work with executive transitions say what’s not unusual is for founders to push back albeit rarely with much success. “Founders have much more emotional attachment,” says Charles Elson, director of the Charles L. Weinberg Center for Corporate Governance at the University of Delaware. “For an average CEO, it’s a job and money. For a founder, the company is an extension of self. It becomes much more personal.”
A year ago, for instance, Men’s Wearhouse founder George Zimmer was unceremoniously ousted as executive chairman of the company he founded 40 years before. After being shown the door, Zimmer, famously known for his “you’re going to like the way you look” ads that made him the public face of the brand, issued a statement that left open the possibility he would try to take the company private. In it, he said he was “greatly concerned” about the future of the company. (Zimmer later decided against making a move, and Men’s Wearhouse has since acquired Jos.A. Bank in a heated takeover battle.)
Other founders retire or step aside from executive roles with less pushback initially, but then attempt to re-exert their influence later when the company stumbles. Earlier this month, for example, Lululemon founder Chip Wilson voted against two of the company’s directors, saying in a statement that he is “concerned that the board is not aligned with the core values of product and innovation on which Lululemon was founded.” Wilson had already resigned as chairman following a verbal gaffe he made in the aftermath of the company’s sheer yoga pants recall, but still owns 27 percent of the company’s shares. Though the company fired back with its own response, Wilson is reportedly in talks with bankers about his options to shake up the board.
And back in 2012, Best Buy co-founder Richard Schulze, who had not been CEO since 2002, stepped down as chairman following a probe into why he hadn’t alerted the retailer’s board sooner to an alleged inappropriate relationship between the then-CEO and a female employee. Within months, Schulze began trying to buy out the company and take it private. The talks ended early last year with no deal; Schulze was given the honorary title “chairman emeritus” as well as the right to name two directors to the board until January 2016.
Of course, itcan be good for a company when founders return to influence, whether through their own moves or at the urging of the board.
Kerry Sulkowicz, a psychiatrist and psychologist who advises CEOs and boards, says that “as emotional and irrational as creative entrepreneurs can get under circumstances of transition and as blind as they can be to some of the consequences of their behavior some of their core criticisms about the direction of the company are often spot on. They’re often absolutely right about what the company needs, or what is currently wrong with it.” Few would argue, for instance, that the return of Steve Jobs to Apple wasn’t good for the tech behemoth.
Some founders say they are motivated by wanting to improve the company rather than by personal pride. In his statement from last year, Zimmer said the board was trying “to portray me as an obstinate former CEO, determined to regain absolute control…for my own personal benefit and ego. Nothing could be further from the truth.” And Chip Wilson’s spokesman, Greg Lowman, characterizes the Lululemon founder as having “the long-term focus of the company in his heart and his actions reflect that.”
Yet for all founders, says Sulkowicz, their identities are still closely tied to the companies they’ve started. So the question is not if they have a personal attachment, but how much. “The best ones are often the ones who are most wrapped up in it,” he says. “Their identity and the identity of the company is almost inseparable. It’s wonderful when it works. But it’s also a source of great vulnerability.”
That’s particularly the case for leaders in creative industries, such as retail or fashion, who tend to have more emotional and less corporate personality types that match their creative endeavors, according to Sulkowicz. “Without them, these companies would not exist,” he says but the much less welcome side of that personality can be narcissism. Many founders “have an unconscious desire to prove that they are needed forever and that the company can’t survive without them.”
That fusion of professional and personal identity is what can make it particularly painful for founders when they become sidelined, end up fighting with the board, or get stripped of their authority. Jeffrey Sonnenfeld, a professor at the Yale School of Management who has studied CEO retirements, classifies such leaders as monarch CEOs. “Their business is defined around them and their life is defined around the business,” he says.
At American Apparel, for instance, Charney’s overtly sexual persona has always been part of the company’s racy image. Charney, who has been trailed by allegations of sexual harassment for years, has appeared in several of the company’s suggestive ads, including one where he and two women wearing clothes look to be holding a meeting on a mattress. The caption? “In bed with the boss.” His personal style mirrors the 1970s- and 1980s-inspired hipster aesthetic American Apparel sells in its stores. As he told the Financial Times: “I am a deep part of the brand.”
And like most founders, he appears to have lived and breathed the company he founded. When a new distribution center began running inefficiently, Charney has said he had a shower built and literally moved in to the facility to try to fix the problems. A source close to the situation said Charney worked 24/7 and had little life outside the company. (When reached via phone, Charney said he was not able to speak for this article.)
The single-minded focus that helps many founders succeed is the same attribute that can also come back to haunt and hurtthem. “The kind of people who start businesses are highly motivated risk-takers,” says Michael Freeman, an executive coach and clinical professor of psychiatry at the University of California, San Francisco. They tend to be “somewhere on the scale between assertive and aggressive,” he says, and have a dominant personality. “The worst thing that can happen to somebody like that would be public humiliation.”
Still, it isn’t just founders who face the public shame of getting pushed out who have a hard time letting go, says Paul Winum, a psychologist and senior partner with RHR International‘s board and CEO services practice. “You worked 70 hours a week for years and years to build a business for years, and you feel like this is yours both in terms of having a big financial ownership and a tremendous psychological ownership.”
When the change happens abruptly, as it did for Charney, the experience can be particularly jarring, Winum says. It takes a long time for any CEO, even a non-founder, to prepare for the idea of succession and for losing the power that goes with a leadership position. “When suddenly someone is being forced to separate from their baby,” he says, “that’s when the resistance and the fight can be vigorous.”
By Jena McGregor
A message from Matthew R. Lindsay, executive director of ICC FraudNet, about The FraudNet Report:
This newsletter about fraud & global asset recovery is published by ICC FraudNet, a highly select network of independent, world-class asset recovery attorneys in 54 countries around the world.
In recognition of fraud’s increasing sophistication, speed and global dimensions, in 2004 the International Chamber of Commerce (ICC), the world business organization headquartered in Paris with offices in 70 countries, founded the FraudNet network under the auspices of its London-based Commercial Crimes Services unit.
FraudNet is a 24/7 international rapid deployment force that pries open the vault of bank secrecy and helps victims chase down and recover their stolen assets with the same cyber-powered speed, stealth, reach and proficiency as the most sophisticated global fraud network.
Using sophisticated technical investigations and forensics, as well as cutting-edge civil procedure, members of ICC FraudNet have recovered billions of dollars for victims of some of the world’s largest and most sophisticated global frauds involving insurance, commodities, banking, grand corruption and bankruptcy/insolvency. We have expert, on-the-ground representation in all of the world’s top financial centers and offshore bank secrecy havens and work closely with law enforcement when MLAT requests and criminal asset forfeiture are required.
This newsletter will provide members of FraudNet, organizations representing institutional and individual victims of fraud, and other interested parties with regular updates on the progress of key asset recovery cases and new developments in procedural tradecraft. Our Report will also present interviews with FraudNet lawyers and news from FraudNet conferences.
It seems obvious that multi-disciplinary fraud recovery teams require forensic accountants to uncover the facts of the fraud, along with specialized attorneys to develop and implement an appropriate legal response. However, in recent years FraudNet has expanded its world-class asset recovery team concept to include a new discipline: psychological warfare. The goal is to open a new front against complex financial frauds and to recover more stolen assets, more quickly.
How is victim recovery enhanced by specialists who conduct so-called warfare of the mind, mapping out the “psychodynamics” of fraudsters, their accomplices, associates, family members–even victims?
To answer this question, individual representatives of the accounting, legal and psychology disciplines with a strong track record of working together on FraudNet teams presented an interactive (but fictive) investigative scenario at the Third Annual Sao Paulo Conference on Fraud, Asset Recovery & Cross-Border Insolvency Cooperation.
“It was a clear demonstration of how psychodynamic techniques help fill in missing pieces of fraud’s complex puzzle, decoding and forecasting perpetrators’ operations and revealing ‘pressure points’ and fractures that can be exploited in depositions, interviews and litigation,” said FraudNet member and presenter, Bernd H. Klose, founding shareholder of kkforensic of Friedrichsdorf and Hamburg, Germany.
Klose added: “Such comprehensive mapping of relationships and motive, over and above the ‘hard’ transactional facts of forensic accounting or business activities of record, often can yield disgruntled employees, contractors or family members who provide ammunition against primary targets or even open up entirely new avenues for recovery.”
According to presenter D.C. Page, senior vice president of the Consulting and Investigations Division at Andrews International, Miami, “What became very clear during our presentation was that the work results of each profession are highly influenced by and build upon each other.” He added, “However surprising this may sound, we saw demonstrated in our interactive scenario how analysis of one apparently tangential fact–that our subject was a cross-dresser– directed our investigation at several specifics that led straight to the core of the fraud.”
Klose added, “We also demonstrated that deep-impact psychological knowledge is likely to answer questions important to the legal strategy for recovery. For example, we saw that insight into a perpetrator’s psychology can forecast whether he will be likelier to surrender or fight back once secrecy is dropped and he finds himself under legal attack. We also saw how such insights throw direct light on the problem of asset-hiding.”
According to the third presenter, psychoanalyst Alexander Stein, Ph.D., founder and managing principal of Dolus Counter-Fraud Advisors LLC, New York, “At its core, fraud is warfare of the mind. The whole undertaking manifests and serves psychological forces within the fraudster that stand independent of any pure pursuit of financial gain.” He added: “Fraudsters are not only internally driven by these forces, but they also externally deploy a whole arsenal of psycho-social devices that are more refined and sophisticated than in other crimes. At best, these are only partially addressed by standard asset recovery instruments and techniques.”
For that reason, Stein said, victim recovery can directly profit from psychologically sophisticated insight into fraud and astute analysis of all intelligence gathered by the multi-disciplinary team–even what otherwise might be discarded as “garbage.” In fact, he pointed out, “One of my favorite moments on any multi-disciplinary FraudNet team comes when I can take an undervalued piece of soft intelligence about a subject’s character or personal life and use it to shift the forensic or legal paradigm. A single overlooked fact or actor can create key leverage against the entire criminal enterprise.”
Such “garbage” sometimes turns up when Stein conducts secondary sweeps of the results of the investigative team’s hard-data “expedition” into accounting and business facts of record: the so-called trail of deeds and funds.
Stein’s proprietary methodology, called Psychodynamic Intelligence Analysis (PIA), is a set of techniques for identifying, understanding, and utilizing so-called soft or human data. PIA can assist forensic accountants and litigators in advancing case conceptualization, management, and prosecution every step of the way by opening a third dimension on formerly two-dimensional intelligence gathering and data analysis.
“These techniques can reveal what may not be readily discernible in discovery, or through other hard-data intelligence gathering, but which is of critical utility to anti-fraud recovery teams: the psychodynamic turmoil that besets the fraudulent enterprise, just like every organization, and the unique pressures and challenges of being its leader,” Stein pointed out.
“In many key respects,” he added, “the fraudster is a masterful corporate strategist and leader. He is the CEO of a complex, organized business entity which is, in most instances, staffed with a senior management team of superior quality and capability.” Nevertheless, Stein pointed out, “stress points,” flaws, and fractures exist in the fraudster’s complex organization. Once identified, “these can be pressed to breaking or pried further apart.”
Not surprisingly, his methodology is not applied only to perpetrators, but also to victims, who are the fraud equivalent of a crime scene. “Psychological ‘fingerprints’ gathered from victims can provide valuable clues both to the fraud’s methodology and why it succeeded,” Stein explained.
Beyond the benefits of these psychodynamics to any specific asset recovery effort, Stein believes lessons from his proprietary system can enhance counter-fraud regulatory, compliance, and watchdog oversight with sophisticated preemptive profiling and forecasting systems and improved protocols.
Narcissism has received a bad business press over the years. The self-obsessed chief executive with a volatile temper who both charms and intimidates staff, takes all the credit for success while shifting the blame for failure on to others, has been a recurring character in corporate dramas.
Compelling, charismatic, colourful, such people can initially draw people under their spell until difficulties and discord arise, when their deeper, darker personality begins to emerge.
Such individuals tend to be at the extreme end of narcissism, which is best understood as a personality trait along a wide continuum, rather than a pathological state. These people have an insatiable appetite for control, status and praise, which explains why many strive for and gain the top jobs.
But it is also true that such people bring qualities that are essential to the growth and success of a business. These include ambition, optimism, visionary thinking, a willingness to take risks and an ability to convince others to follow their lead. Their intelligence, aspiration and drive can be a huge asset that needs to be accompanied by a capacity for self-reflection, some ability to manage their selfish needs and a knowledge of when to seek advice.
If a person is at the extreme end of the narcissistic spectrum, however, and particularly if market circumstances become unfavourable, his or her thinking can become so irrational as to cause immeasurable damage.
Mark Stein, professor of leadership and management at Leicester university in the UK, has studied the benefits and drawbacks of narcissism to companies. He cites Dick Fuld, who was head of Lehman Brothers at the time of its collapse, as an example someone whose character at first brought success but then allowed catastrophe to strike.
Lehman had been a fraught and highly fractured place to work, and when Fuld was appointed, he set about in a somewhat militaristic and brutal manner stamping out the dissent and pulling people together, Prof Stein says.
Approaching the financial crisis, Mr Fulds narcissistic traits became entrenched in a persecutory view of the world according to which the organisations problems were entirely attributable to others, he adds.
Finally, the only way out was for Lehman to be sold off, but Fulds overinflated view of the worth of the company prevented him from doing this. The catastrophic collapse of Lehman, that levered us into the global credit crisis, resulted from this.
New chief executives may find themselves in a bind as the commendable narcissistic traits such as self-confidence, fierce ambition, a grand vision and compelling personality that enabled them to reach the pinnacle suddenly have the potential to become a liability. Can they put their selfish impulses aside and put the companys interests first?
Kerry Sulkowicz, a psychoanalyst and founder of the Boswell Group, a New York business consultancy, thinks this is a tall order and says: In my experience, the narcissism healthy or otherwise that drives some executives to achieve positions of leadership remains on display once they reach the top. Try as they might to suppress these traits, it doesnt work.
One example of this was a chief executive who was highly ingratiating, paid false compliments and charmed people with his good looks, smooth delivery and an ability to make everyone feel they had a special relationship with him. He was extremely religious and often began senior team meetings with a prayer.
When he became CEO, the share price of the company soared, in part because initially he changed and developed the business, but also because he worked his charm on Wall Street analysts. Eventually, though, his colleagues began to see his disingenuous and manipulative side. By that time, however, the companys performance had begun to dip, he had sold most of his shares and then proceeded with a planned retirement from the company while leaving his successor to inherit a mess.
Prof Stein explains how this comes about. One of the biggest problems with narcissistic managers is their extreme feelings of omnipotence and their deluded thinking that they can shift the market and know the future. As a consequence, and in the face of clear and stark warnings from others, they may take on extreme and unnecessary risks that endanger the future of the organisation.
The constant craving for affirmation and drive for perfection is best understood as a psychological defence. Behind this veneer is a person struggling to protect himself against deep feelings of inadequacy, insecurity and vulnerability.
The need for affirmation may be driven by an unconscious attempt to repair earlier traumatic experiences where he may have been neglected or hurt badly in some way. Children often internalise these experiences, so instead of feeling angry at their parents, they see the fault in themselves. Criticism, and indeed any unpleasant feelings, become intolerable.
It is difficult to change such leaders. Those with enough capacity to listen and learn can be helped by a good coach or a trusted colleague. But for those with deeper emotional damage, the process can be lengthy and difficult even with professional help.
This was the case for one successful entrepreneur who sought help because of personal relationship problems. His early childhood was marked by neglect. When he was six his father left, leaving him with a depressed mother.
He survived his own feelings of loss by escaping into his vivid imagination. There he created exciting stories that provided an alternative to the grim atmosphere at home. People became immensely attracted to him and his tales, and thereby began his subsequent business career of convincing people with his visionary thinking.
Yet beneath this success was a man who was insecure and unable to sustain intimate relationships. In-depth therapy helped him make the links between his extreme need for affirmation at work and his childhood.
He came to understand that the attention his success had brought helped distance him from a sad childhood and attain the praise he desperately missed from his father. Once he understood this, he was able to work more collaboratively with his staff and learn to tolerate his own experiences and feelings.
Research by Donald Hambrick, professor of management at Penn State University, has found that companies led by more narcissistic CEOs have more extreme fluctuations in terms of results.
Narcissistic CEOs, who tend to pursue dynamic and grandiose strategies, also tend to generate more extreme performance more big wins and big losses than their less narcissistic counterparts, he says.
They do not generate systematically better or worse performance. In particular, they engage in substantial strategic change and considerable acquisition behaviour.
Prof Hambrick also believes that narcissistic leaders are more beneficial in dynamic industries, citing entertainment, high tech and cosmetics as sectors that are more suited to such characters.
Perhaps the most useful conclusion to draw is that narcissism needs to be both understood and managed. We tend to condemn narcissism in others while failing to see it in ourselves. The writer Gore Vidal put it succinctly when he defined a narcissist as someone who is better looking than you are.
How to accommodate a narcissist
- Find out what their agenda is and go along with it if you cannot, you may need to leave
- Appreciate that narcissistic leaders can be brilliant and inspiring too
- Realise that it is all about their success, not your achievement
- Begin feedback with praise they only hear what they want to hear
- They will blame you if things goes wrong, so keep everything on record
Dont try this
- Do not expect acknowledgment or thanks nor any empathy or interest in you
- Do not take any criticism they direct your way personally
- Do not ignore them give them the attention they demand
- Do not confront them, it could make them paranoid and vindictive
- That said, if their behaviour becomes abusive, do not tolerate it
The writer is a psychotherapist and this article is based partly on her clinical experience.
By Naomi Shragai
Please share with us what prompted you to launch Dolus Counter-Fraud Advisors, LLC?
My establishment of Dolus has been a professional evolution more than the product of a discrete decision. How I came to develop this business is best understood by tracing a sequence of pivotal inflection points (each of which is in reality far more complex than I can concisely describe here).
I hold masters and doctoral degrees in psychoanalysis, and completed my clinical training and licensing at The National Psychological Association for Psychoanalysis in New York. I pursued excellence and success with intense dedication, worked to grow my private practice and help my patients, and established my reputation as a respected clinician/scholar/teacher/lecturer. I wrote and published many articles in prestigious peer-reviewed journals, and presented at international conferences. All of it was compelling and gratifying.
But I was also frustrated by a cluster of issues. One is the traditional private practice business model: a referral system. I felt stymied by having to wait for the phone to ring with a potential new patient, irrespective of all the other business development actions I took.
More fundamentally vexing: psychoanalysis, as a part of the larger mental health industry, was continually being mischaracterized, maligned, and marginalized, in the general press, by rival therapeutic modalities (e.g., cognitive behavioral therapy, psychiatry, psychopharmacology), and in the market-place of popular culture, where mental health issues and treatment suffer from persistent social stigma. I was perturbed by what I considered an insufficient engagement by the profession—the body of practitioners and administrators of training institutions—to staunchly respond to and redress these brand assaults. I mounted my own campaign, primarily through writing letters to the editor in the New York Times designed to correct and clarify misperceptions about the contemporary relevance and value of psychoanalysis. Quite a few were published over time. But there was, not surprisingly, no measurable impact on the larger problems. I had, just the same, honed the useful skill of articulating complex ideas in lean, accessible language.
Then: September 11, 2001. My wife and I lived across the street from the World Trade Center towers. She was pregnant with our first child and at home (http://beyondsuccessonline.com/) that morning. Thankfully, she survived unscathed. But our apartment was ruined; we were homeless and did not relocate until December of that year. Our baby was born that April. In the scheme of horrific events, we were of course among the extremely fortunate. We had only lost material things, all replaceable.
Still, nothing was the same. What had before seemed confounding but tolerable professional frustrations now had a different, more urgent cast. Being the parent of an infant in the post-9/11 world, having been directly impacted by the event itself, and both witnessing and experiencing how American society was reacting, catalyzed another shift for me.
The thought coalesced that I could not remain working solely as a clinical practitioner, treating individual patients struggling with their life’s challenges. However important and satisfying that work is, I now identified myself in different terms: as a social entrepreneur.
I positioned myself to make a broader impact through focusing my specialized expertise on the psychological underpinnings of leadership, corporate culture, and organizational governance. And consequently launched a process of rebranding and redirecting my preferred practice area to advising CEOs, entrepreneurs, corporate boards, and senior business leaders whose decisionmaking inside their organizations has significant influence on commerce and society. At this time, I was also invited into the Boswell Group, a consulting firm focusing on the psychology of business. To further expand the scope of my influence as a thought leader, I navigated to becoming a monthly columnist—writing on the psychology of leadership and entrepreneurship —in Fortune Small Business and on CNN/Money.com. Contributing to top-tier business publications is now a regular part of my professional activities. In early 2010, I got an email from an old friend I hadn’t seen in many years who is one of the world’s foremost fraud and asset recovery lawyers. He’d read my work in FSB and suggested that I would be uniquely positioned to add value to his field. Fraud is fundamentally predicated on the manipulation of human psychology: fraudsters induce victims to become unwittingly deprived of dominion over substantial sums of their own money or other valuable assets through deceit, artifice, sharp practice, or breach of confidence. Traditional fraud recovery professionals (certified fraud examiners, forensic analysts, investigators, and litigators) routinely confront these complex psychological issues in their work. It had become apparent that it is suboptimal—and, at core, a strategic disadvantage—for these professionals to rely on general human experience, as lay people, in navigating such inscrutable terrain. In the challenge presented to me—what could I offer to fraud-fighting professionals?—I immediately saw peerless opportunity. This sparked the development and formation of Dolus Advisors. I responded with the beta architecture of cutting-edge perspectives and innovative, strategic methodologies regarding the psychological dimensions of fraud and fraudsters, coupled with actionable deliverables which measurably assist in virtually all facets of a fraud case. I continually refine and expand my technology in the crucible of in-the-field case work, and through writing and speaking internationally to fraud, asset recovery, corporate corruption, and AML professionals.
Following the initial launch of Dolus, I also recognized additional market potential, and expanded services into corporate fraud deterrence/avoidance, institutional risk management, and fraud-related organizational triage.
There is no typical day in the life of an entrepreneur. Please share with us a sample of your
day, start to finish.
I’m up at 5:15 and in my office by 6:30, except for one morning a week which is reserved for making breakfast for my kids and walking them to school. There are always emails to respond to, or early meetings and phone calls. Many of the fraud matters I’m engaged with involve multinational teams, so it’s common to accommodate colleagues’ schedules in far-flung time zones. I’m frequently shuttling to and from my NY-based consulting clients’ offices on Wall St and Midtown, as well as meetings in my office. I always have several conference presentations to prepare for, as well as current and on-deck writing projects; time spent thinking about or drafting text is a daily activity. Physical fitness is of paramount importance to me. And I aim to be home for dinner with my family most nights.
What are your ‘can’t live without’ Smartphone or desktop applications?
My work centers on interacting with people so I primarily use my phone for talking, emailing, and texting. Other than Docs-to-Go (the iOS Word/Adobe platform for writing and reading documents), the apps I rely on the most are Pocket Informant for scheduling and taskmanagement and DropBox for document sharing.
What are your tricks for time management?
I’m extremely focused and disciplined (a classical musician in my earlier career, I developed rigorous practice habits from an early age). That helps. But managing time well is a skill, not a trick. One piece includes effectively navigating a constantly fluctuating calculus of competing forces: task and duration, time and resources, requests and commitments, expectation and reality, all in context. Another less obvious element is psychological: understanding your relationship to the activity or its outcome. Ambivalence, conflict, or unacknowledged disinclination is frequently an invisible source of friction lurking behind the apparent reasons for being disorganized. Conversely, unencumbered passion is a terrific motivator.
What was the best advice you received when you started your career?
Not to restrain myself out of concern about other people being disrupted by what I can do: be all of myself.
Given the current economic climate, what has been your strategy for building awareness of Dolus Counter-Fraud Advisors, LLC? (what you do for short term and
long term growth)?
Fraud is a growth industry. And the human element is inescapably crucial to visionary leadership—in corporate governance, policy-making, commercial stewardship, or in the aftermath of wrong-doing (such as fraud).
My core competencies involve clarifying, decoding, and accessibly articulating the complex underpinnings of motivation and behavior, rendering sophisticated analyses of the ecosystems of human inter-relationships in organizations and in fraud matters, enhancing thoughtful highlevel leadership performance, and providing specialized knowledge of the mind and its propensities.
None of that is directly linked to undulations in the economy. In my assessment, then, marketing, building brand awareness, and general business development pivot primarily on my own skills and performance as a thought leader and specialist practitioner, more than external factors.
What is your proudest achievement as an accomplished entrepreneur?
My sense of pride regarding my professional life always has at least two sides. One is focused on what I’m able to accomplish for my clients. The other is personal: my own evaluation of what I’ve done and how well. There is no one accomplishment I would single out.
How do you achieve balance in your life?
Through lots of hard work of various kinds. The payoff is that I’m in a privileged spot: I’ve created businesses using my talents and interests which are rewarding to me in every way, provide services of importance and value to others, and which also, I hope, contribute something positive and beneficial to the world. I have an incredible family, outstanding health, and good friends. The thing with balance is that it’s never static and the “achievement” of it can only be transitory. Learning how to respond reasonably well to all the fluctuations—staying more or less balanced when some things are out of balance—is a natural part of a good life.
Your top 3 book recommendations?
For fiction: anything by Thomas Hardy or Charles Dickens. I’m generally not a fan of business books, which tend in the main to compress and over-simplify complexity in order to appeal to more readers. There are no lists of recipes or how-to’s for success except perhaps writing a bestseller based on lists of recipes and how-to’s. More applicable are obituaries; these are an unparalleled resource for learning about resilience, high-level decision-making, and long-range responses to early life experiences characteristic of notable world figures.
What are your most rewarding charitable involvements?
A primary tenet of my business is to be of help. In keeping with this core value, I always reserve time to work, either pro bono or on deeply discounted retainers, with the leaders of NGO’s and NFP’s whose missions focus on social good.
For readers interested in learning more about charitable giving through acts of service rather than deep-pocketed philanthropy, see my FastCompany article on the psychology of generosity: http://www.fastcoexist.com/1681561/the-5-most-generous-on-wall-street#5.
Who has influenced your career the most?
My wife is at the top of a substantial list of generous, talented people I’ve been privileged to know.
What is your advice for someone interested in entrepreneurship?
The most useful advice is always tailored to the specific circumstances of the person (or organization) asking for it. So I typically don’t randomly dispense it. That being said, my advice to both aspiring entrepreneurs as well as already established leaders, is to always be deeply thoughtful about any advice you receive. And also to bear in mind that the best advice won’t always actually come from somebody else; having someone who serves as a confidential sounding board can assist you in clarifying good counsel for yourself.
About Alexander Stein —
I am an internationally established thought leader and specialist practitioner in the psychology of fraud, and a business psychoanalyst whose preferred practice area involves advising CEOs, established entrepreneurs, and senior business leaders on the psychological underpinnings of leadership, corporate culture, and organizational governance.
As Founder and Managing Principal of Dolus Counter-Fraud Advisors, I partner with asset recovery litigators and investigators on behalf of the victims of fraud. My conceptual and methodological innovations include strategic psychodynamic intelligence interpretation and analysis, multi-dimensional perspectives on legal, investigative, and asset tracing and recovery tactics, organizational procedures and operations, human performance matters, and case management.
In addition, Dolus provides cutting-edge resources to corporate leaders and boards in situations involving institutional fraud and corruption, including: Fraud/Corruption/Integrity Risk Assessments, Human Performance Audits, Psychodynamically-oriented Intelligence Investigation and Analysis, Profiling, Forecasting, Model-Building, Motivation/Behavioral Analysis, and Tactical Response Plans.
I am also is a Principal in the Boswell Group, a consulting firm focusing on the psychology of business. My approach is designed help senior executives and their organizations with, for instance, leadership and senior team dynamics, succession, partnership, conflict resolution, and innovative development initiatives.
I am a former monthly columnist for Fortune Small Business, CNN/Money.com, and BNET/CBS Business News. My work has been featured in many blue-chip publications, and I keynote regularly at international fraud & asset recovery and trans-border bankruptcy cooperation conferences. My chapter “Warfare of the Mind: The Psychology of Fraud” is forthcoming in the FraudNet World Compendium of Asset Tracing and Recovery, 2nd Edition.
A young chief executive who founded a thriving company appears to be at the peak of his success. But instead of enjoying his achievement, he is stressÂed and overwhelmed with responsibility. His problem is a failure to delegate work.
The company is a triangle and I feel at the bottom of it, holding everything up, is how he expresses his dilemma. Although he envies managers who are able to delegate, he feels unable to, believing that the company is an extension of himself and his personality.
He adds: I make these emotional connections and I believe that what I do is about the relationships I make with people. I never wanted to delegate for fear of losing my clients.
Although most executives would agree that delegating is crucial to a businesss success, many still micromanage in such a way that they continue to control most aspects of the work.
For many, the skill of delegating can be learnt. But when an executive fails to do so even if it is essential to the growth and functioning of the business, the problem may be more deep-rooted. Beliefs that I have come across in my psychotherapy practice, such as this business is all about me; no one can do it as well as me; or people are likely to let me down, are all justifications that sabotage delegation.
One consequence of these beliefs is that staff being managed can feel undermined or undervalued, and may soon lose interest in their jobs. The harm to the company can be twofold, according to Jeannie Hodder, a business coach who works at London Business School. First, micromanaged staff cease thinking for themselves, and without imaginative input the company is deprived of innovative ideas and can stagnate. Second, overly hands-on executives can be left feeling overburdened and stressed, and without time to devise strategy.
Conversely, executives to whom delegation comes more easily say it has been crucial to their businesss success. Empowering people is the absolute key to it, says Charles Wace, founder and chief executive of Twofour Group, the UK independent television production company behind such programmes as Educating Essex, Happy Families and Alex Polizzi The Fixer. His approach has been to work with clever people and enthuse them: If you manage to employ people who are brighter and more talented than you, then youre doing very well. It makes good sense to hire brilliant people and give them their head, rather than hire mediocre people and make yourself look good.
Matthew Stone, a business coach who heads The Stone Partnership, has extensive experience of the problem of delegation. Such executives have negative assumptions about what their staff can do, and the result is that people tend to replicate these low expectations, he says. The manager may hold a rigid belief that his or her approach is the only one. This attitude does not allow people to develop their own ways of working, which in turn leads to staff trying to second- guess what the manager wants rather than developing their own process.
One CEO told me that when he finally forced himself to delegate, he suffered withdrawal symptoms. For him the kick from being the one to, in effect, pull the deal off was almost addictive. When you delegate there is a loss of excitement of meeting the target, and suddenly you have to share it, he says.
He admits that he prefers to retain work where there is praise to be had. Its very important for me to get praise and recognition. One of the reasons Ive been more successful is my insecurity combined with drive. I belÂieve insecurity makes people driven.
In my experience as a psychotherapist, some men who crave recognition may have had absent fathers or ones that ignored them. As a result they may tend to withhold praise from others in the way that their fathers withheld it from them or because they want it for themselves.
There are other potential emotional wounds from delegating. By drawing back from their team and letting them get on with it, managers feel less involved and more isolated. There is also the acknowledgment that others can do the job as well, and in some cases better, which can be a bitter pill to swallow.
Delegation can be difficult because it always involves dependency on others, and [some] people cannot bear depending on anyone, no matter how capable they might be, says Kerry Sulkowicz, a psychoanalyst and founder of Boswell Group, a New York consultancy that specialises in advising chief executives on the psychological aspects of their work. Dependency may make them feel weak and vulnerable, repeating some early life experience in which they were dependent on someone who failed or hurt them.
This applies to another CEO I spoke to, who manages a financial services company. He felt guilty if he was not available to micromanage his team, constantly worrying that he was letting them down.
He was convinced it was his role to solve everyones problems and would not allow his staff to find their own solutions. Consequently, contrary to feeling supported, they felt he did not trust them.
Digging into his background, it became clear that the origin of this lay in his childhood, when he had the responsibility of looking after his depressed mother once his father had left the family. Because he had no adult figure he could rely on, he came to believe that no one was trustworthy. Once he understood this link to his childhood, he was better equipped to make informed choices at work.
Mr Wace believes that trusting people is not enough you also have to take risks and let them make mistakes. He adds that a further benefit for his company is that, by allowing others to manage its day-to-day running, he is free to see the bigger picture and plan for the future.
Another CEO who successfully made the transition from micromanaging to delegating says: I found in the end that I could get a kick by seeing my team come together successfully and that wonderful sense of achievement when you see others doing it as well or better. You can get a warm glow from successful delegation that can balance all the losses from letting go of work.
Warning signs: Checklist to test your reluctance to delegate
– Your staff are not bringing you their ideas and concerns. This may indicate that they find you unapproachable and closed-minded.
– There is a high turnover of staff.
– You treat everyone the same, implying that you have failed to see the unique differences in the team.
– You take all the successes and failures of the business as your own.
– You cannot trust others to do the job as well as you, and have low expectations for your staffs performance.
– You believe it is up to you to solve all the companys problems.
– When the business fails to thrive, your response is to control more of the work.
– Your mood is low or you may have become depressed and/or anxious.
– You feel overwhelmed with responsibility
- Home life
– You cannot switch off from work and it disrupts your relationships at home.
– You have difficulties asking for help.
– Your dominant character trait is self-sufficiency.
The writer is a psychotherapist and this article is partly based on her clinical experience. None of the individuals named is her client.
By Naomi Shragai
A senior television executive is reading a bedtime story to his eight-year-old daughter. It is 10pm and he has just returned home from work. His phone rings a work call and he answers it, leaving the story unfinished.
His daughter shouts from her bed: Youre a terrible father! He returns to his daughter and tries to explain, with little success, why the call was important.
This executive works late and sees his daughter for only about two hours during the working week. Although he feels guilty about this and fears he is missing the best moments of family life, he seems unable to switch off from work.
This scene will be familiar to many men in senior positions who have taxing jobs and struggle to respond to the demands of family life.
It is common for working women to reflect, sometimes publicly, on the challenges of juggling the needs of family and work. In recent decades, the role of fathers has changed too, giving them greater involvement in family life.
But often men find it difficult to deal with the conflicting demands of work and home . As I have seen in my own psychotherapy practice, it is, for many executives, a continuing, unresolved battle. As one chief executive whose children are now adults told me: It was often a tug of war, and work would always win. I was always better at switching off from home at work than the other way round.
The problem can be exacerbated because men are often climbing to the peak of their careers during their childrens formative years. Instead of family life being a rewarding break from the pressures of work, too often it comes a poor second with the result that the family and the career suffers.
Men rarely seek help for such problems early on. They can be unwilling to confront it, and may fear that it will be regarded as a weakness and may harm their promotion prospects. Often, these problems only present themselves when the individual reaches a crisis point such as divorce, depressive breakdown or alcohol misuse.
Many men justify their long working hours as wanting to provide the best for their families. Work, however, offers psychological as well as financial rewards it can be exciting, challenging and provide satisfaction from a job or deal well done. Family life can feel messier, mundane and even boring in comparison.
The danger is that work can become a convenient escape from the emotional demands of family life. Top executives often develop a sense of themselves through their professional achievements, not through emotional connections. In contrast, their wives may value emotional connection over all else.
For some men, work can even become an alternative family; where they can feel more successful, more in control, and turn to colleagues for connections that they are missing at home.
Kerry Sulkowicz is a psychoanalyst and founder of the Boswell Group, a New York consultancy that specialises in advising chief executives on the psychological aspects of their work. He describes men with the most extreme difficulties in this regard as being unable to put themselves in another persons shoes. They often have little self-awareness, cannot empathise and lack emotional language, which frequently angers and distances family members.
As a reaction to a more distant wife, the executive may begin an affair. Or he may turn to alcohol or male-dominated activities that further exclude the family. Career and home life can quickly unravel.
Mr Sulkowicz explains why such men focus on their careers: At work they dont have to deal so much with people who are emotionally needy, or who miss them [when they are away]. They often find these problems either trivial or incomprehensible.
The kinds of problems these men solve at work tend to be practical and tactical, and action is rewarded with compensation, professional advancement and praiseâ.â.â.âHowever, problems at home are more emotional, and listening rather than doing is often the best approach.
When such men transfer the authoritarian stance they adopt at work to home, family members feel resentful and alienated. It is often easier to tell employees what to do than a toddler or a teenager.
Mr Sulkowicz says it is not only the mans family that can suffer, but also his career in the long term.
The best-kept secret here is that these bullying, arrogant men are much less effective at work than they think they are, he says. While they may get a lot done, they inspire fear and avoidance, and they find themselves increasingly disconnected from their colleagues and their organisations.
Some male executives, however, have adopted strategies for meeting the demands of corporate and home life, often combining a conscious decision to prioritise the family with strict timekeeping. For Greg Hodder, chief executive of Charles Tyrwhitt, the mens clothing company, the decision was instinctive and driven by the fact that he thoroughly enjoyed being with his children.
The time when they were young, and family life was most demanding coincided with a particularly successful period of his career. Having something demanding but different, rather than relaxing, gave me a real break from work, he says.
He established a rule that he would not work past 6pm or at weekends and he stuck to it. He does not look at emails during evenings or weekends, or take work on holiday. Showing his wife his devotion to the family strengthened their marriage.
Mr Hodder believes he has been able to achieve this by being extremely organised. People who work long hours are less able to achieve their goalsâ.â.â.âThey are people who tend to say yes to everything and end up out of control, he adds.
Another senior executive, who works in the media, ensures that he makes breakfast for his three children and is there for their bedtime stories. He has sought to work in organisations that are sympathetic to family life.
Mr Sulkowicz believes companies can help, with astute human resources officers playing a proactive role. Perhaps, however, executives struggling with the issue should reflect on the old aphorism: Work, no matter how stimulating and rewarding, will never love you back.
The writer is a psychotherapist and this article is partly based on her clinical experience. None of the individuals named are her clients
By Naomi Shragai
All people have the capacity to commit fraud. Deceit, trickery, and abuse of trust are a fraudster’s basic tools, and also characteristics inherent to all human beings. This is an insight offered by Alexander Stein, an American business psychoanalyst, and a specialist advisor in the psychology of fraud. Dr. Stein visited São Paulo last month with a group of fraud litigators to speak at the Inaugural Congress on International Fraud and Asset Recovery and Trans-Border Insolvency Cooperation at the Ministério Público de São Paulo. How does the mind of a fraudster operate? What leads a senior executive to commit financial fraud? How do sophisticated psychological expertise and strategies enhance conventional asset recovery operations?
How does fraud psychology work?
Fraud is theft carried out through deceit, sharp dealing, and breaches of confidence. The psychological DNA of fraudsters is incredibly complex. One of the main points to be considered is that betrayal and deception are the fraudster’s tools. He could not employ them so masterfully without knowing them intimately. The fraudster is governed by the main belief that everything presented, conceived or promised towards achieving his personal desires – such as certainty and security – was always based on a lie. The fraudster is psychologically driven by unpredictability, contingency and falsehood. He lives in a state of chronic disappointment, resentment, helplessness and humiliation. One developmental consequence of this is an exceptional and refined radar focused on others. As he grew up, making an effort to understand what was happening in his surroundings in order to survive, he developed certain skills that are now useful in his criminal career. In particular, the fraudster is an astonishing virtuoso in being able to perceive what people seem to need or want. Now, he is a creative, even brilliant – but unscrupulous – CEO.
Are people born with a tendency to commit fraud?
Yes. Everyone is sort of a fraudster! But, of course, not everyone becomes an evil criminal. What I mean is that the characteristics of fraud – falsehood, dishonesty, concealment – are all characteristic inherent to human beings. These are important elements for survival, defence mechanisms to escape or defeat adversity. They are adaptive devices. From the mundane, such as replying to the common social greeting “how are you?” and replying “very good” even when you are not. Or hiding key aspects about your-self ‒ thoughts, feelings,wants and wishes. This is all with the purpose of avoiding scrutiny, judgment or humiliation. The essential point is to understand how our natural defence mechanisms turn into predatory weapons serving criminal action.
What leads a successful person, such as a bank director, to become a fraudster?
Psychologically speaking, the line dividing legitimate entrepreneurship from criminal behaviour is subtle. A creative businessman and a fraudster can overlap in many aspects. Success and personal accomplishment are not antidotes to criminal behaviour, chiefly because financial gain is rarely the main (or even the only) driver for committing substantial fraud. Opportunity and greed may play a role, but overall, high level professionals who take advantage of confidential information and power were already fraudsters before they came to their roles. They didn’t become fraudsters because of their jobs.
How do we identify a fraudster or a potential fraudster?
This is a challenging question. The best fraudsters are highly skilled in their ability to deceive and to avoid detection. But we should remember that in order for a fraudster to exercise his nefarious and anarchical power, he ultimately depends on his victims. What makes a person become a victim? Some people are more prone than others to become victims