How Jerks Caused the Financial Meltdown
Seidman
Lots of explanations have been put forward for last fall’s meltdown in the financial markets, but in a blog posting at Harvard Business Publishing, management expert Tom Davenport offers up his own explanation: too many jerks in the wrong places, making bad decisions.
Davenport, who teaches at Babson College, acknowledges that not all of those who had a hand in the crisis qualify as “jerks” — and, he adds, “All jerks don’t always make bad decisions, and non-jerks occasionally decide badly, too.”
But, citing the reporting of top financial journalists like Michael Lewis and Malcolm Gladwell, he suggests that some of the key architects of the meltdown were, in fact, arrogant and unpleasant characters who were better at speaking than listening.
As Davenport writes:
What are the mechanisms that translate being a jerk into being a poor decision-maker? Jerks tend to think their own perspectives are the only ones worth considering, but good decisions require serious consideration of alternatives. Jerks think they’re never wrong, but good decisions require acknowledging and learning from mistakes. Jerks are consumed with petty resentments and grievances, but good decisions require clear-headed, objective thinking. Jerks alienate other people, but good decisions require collaboration across a social network.
I believe that collaboration — our heightened ability to connect — can not only prevent bad decisions but become an engine of growth and innovation. Remember the old saying, “two heads are better than one”?
Sharing with others drives the relationship companies maintain with employees, stakeholders and customers. Those at the top of any company must guard against isolating themselves from others. Isolated, arrogant and top-down leaders not only make more mistakes, but will find it hard, if not impossible, to enlist the support of others.
The challenge comes when “jerks” are also top performers — great software programmers, excellent salespeople, creative writers or thinkers. There’s a temptation to overlook their personality flaws. Don’t.
In our flat and interconnected world, we can’t afford to tolerate bad behavior. It will surface. The free flow of information has changed the way business operates and how individuals work together. Fading away are top-down hierarchical silos, where people and departments within a corporation ran independent “fiefdoms” organized in top-down, “Just-Do-It” hierarchies.
Instead, collaboration across silos and departments is becoming more common. As traditional job silos break down, command-and-control hierarchies lose their relevance.
A changed world and the new workplace require us to create deep connections with one another.
No one wants to collaborate with a jerk.
Last 5 posts by Dov Seidman
• The Economy: Don't Hit the Reset Button - May 19th, 2010
• Is There 'Honest Tea' on Wall Street? - May 14th, 2010
• Inspirational Shame in the Era of Behavior - April 14th, 2010
• Philosophy Is Back in Business - January 13th, 2010
• How to Behave Our Way Out of Crisis - December 9th, 2009
