As an American of the Jewish faith, I am outraged and embarrassed by Mr. Madoff’s massive fraud.

I equate him to a financial Hitler.  He may not have engaged in mass murder, but he killed or maimed a lot of people’s hopes, dreams, achievements, legacies and peace of mind.  That’s the outrage part.

The embarrassment part is that he is Jewish.  We were always taught the value and importance of Mitzvot (good deeds) and Tzedakah (giving back).  I guess every faith and ethnicity has its share of bad seeds, but I must say that my Jewish pride takes a strong hit when I think of the impact and scope of Madoff’s crimes.

Sometimes outrage and embarrassment are necessary to get us all to look in the mirror and take stock of our individual and collective integrity and responsibility, particularly in terms of our impact on others.

Aside from this piece of self-righteousness, we should be learning from the likes of Mr. Madoff that a major threat to America’s security is the financial gluttony and terrorism in our own midst, and that these people come from an equal opportunity spectrum.

So, it’s not just the matter of good people ratcheting up their own integrity and responsibility.  We must also step up and call out those who are thinking way too much of themselves at the expense of others and the greater good.  In this sense, trusting our instincts that something is not right and exposing it, is important for our personal and national financial security.

My hope was that Mr. Madoff’s biggest punishment would be the total destruction of his reputation.  Further thought tells me he probably doesn’t care due to his sociopathic nature (no guilt or anxiety about one’s impact on people).  However, I’m sure spending the rest of his life in jail will rock him pretty hard.  Since the reality is that financial terrorists are inherently sociopaths, we, the government and media must act on our healthy paranoia.

In short, we all have a role in stopping financial recklessness and fraud.  If heavier government regulation is needed now, let it at least be until we can truly get the hang of regulating ourselves.

The Culture of Business and America

I have heard people talk about “culture” in relation to business organizations, but I’ve also heard variations when people define the concept of culture in a practical way.

My understanding of culture’s definition is the real and expected standards of conduct.  In other words, the attitudes and behavior that get rewarded and punished, or those that fit and those that don’t work so well.

The reason I refer to the term “real” is because there are numerous organizations that communicate their culture related purposes, values and principles.  However, the real standards of conduct are too often disparate from the signs on the wall, statements in the employee handbook or the CEO’s speeches.

In my opinion, a healthy culture includes integrity and responsibility to oneself and others.  These critical factors sustain an organization through challenging times and the long term.  A healthy culture is what enables teams to excel and endure, where a collection of talented people who lack a healthy culture will more likely whither and fail.

When I think about the severe economic crisis in America, fundamental integrity and responsibility come to the forefront as cultural factors that will carry us forward or continue to drag us down, no matter the scope and power of stimulus and regulation.  For me, it is a culture lacking in integrity and responsibility that produced the recklessness and fraud that got us into this mess, and we’ve got to turn that around to get out of it.

As Americans, we all must push ourselves and lean on our colleagues to exemplify ethical and responsible attitudes and conduct.  Current examples of school employees giving up salary so coworkers could stay employed; a business owner sharing millions in company sales proceeds with current and past employees; and a CEO taking out ads to encourage fellow executives to retain employees for less short term profit, should become the rule and not the exception.  At the very least, doing business with real and consistent integrity and responsibility is what is sorely needed to get us back to prosperity and keep us there.

Business owners often value loyalty to a very strong degree, even more than performance.

This becomes especially apparent when a long standing, hard working and loyal employee gets promoted and, all of a sudden, is less-than-competent at the next level.

A good case in point is a distribution center supervisor (Ted) working for the owner (Bob) of a small, growing, specialty retail chain.

The distribution center for many years was relatively small.  Ted started as a jack of all trades worker about 10 years prior.  He next became a supervisor responsible for about eight people.  At that point, the process for merchandise receiving, organization and distribution (to the stores) was fairly standard.  Dedication, attention to detail and hard work were essential ingredients to getting the job done and Ted consistently delivered for eight good years.  Ted was affable and a strong performance model, and his work ethic and attention to detail were exemplary.  People often followed his example and he would put in the time to make up for those who were less productive.

After many more stores were added to the chain, the distribution center required expansion and relocation to another facility more than three times the size.  People were added to the operation and before long, Ted was promoted.  He was now managing supervisors, handling greater complexity in processes, logistics and vendor relationships, and not doing a very good job at all.

Ted felt a personal connection with Bob and the feelings were mutual.  Both Ted and Bob attended important events in one another’s lives, occasionally played golf together and shared an intense interest in sports.  Most importantly, Bob trusted Ted and strongly valued his loyalty.

Ted’s struggle to manage his operation was causing Bob to spend excess time providing planning and organizational guidance, resolving employee and vendor problems, and managing store manager complaints on chronic shipping miscues.  The extra time was also interfering with Bob’s customer and merchandising focus.

Bob was not shy about complaining to Ted, making him aware of his mistakes and giving advice on the right things to do, but continued to compensate for his performance problems.  Essentially, the implicit message Bob was sending:  “Ted, I value your hard work and loyalty.  As long as you continue to give that to me, your job is safe and I’ll compensate for, and protect you from, your performance problems.”

Coaching Bob involved the following objectives:

·         Instilling balanced values and attitudes regarding loyalty and performance.

·         Acceptance that Ted’s performance problem had to be approached with the contingency of obtaining sound competency, or placement in a more suitable job (possibly outside of the company).

·         Commitment to a strategy that involved breaking the cycle of dependency and reward (by compensating) for incompetent performance.

Coaching objectives were accomplished by:

·         Appreciating Bob’s values and feelings about Ted and the things that engendered Bob’s loyalty to him (i.e. hard work, diligence, reliability, honesty, likeability, mutual interests).

·         Enabling Bob to understand all the benefits of closing Ted’s performance gaps.

·         Enabling full understanding of the consequences of maintaining the current situation for Bob and Ted as well.

·         Helping Bob discover his own attitudes and reactions that were fostering dependency and rewarding incompetence.

·         Enabling Bob to identify attitudes and behavior in Ted that sustained his dependency and less effective ways of managing, and inhibited his own leadership growth.

Resolution strategy that Bob executed:

·         Bob apprised Ted that his performance was not acceptable and presented a clear picture of performance gaps and expectations.  He also got Ted’s reactions, used some comments to reinforce his position and tactfully (and empathetically) held his ground on issues that sounded like excuses.

·         Bob explained the contingencies connected with genuine improvement and failure to improve, and related time frames.  Key time frames included monthly reviews with a decision on whether to continue at four months.  Bob also expressed optimism and the desire to make it work.

·         Bob described new ways of providing support and coaching for Ted.  Some examples:

-        Instead of telling Ted what to do, Bob would now ask him questions about the situation to enable Ted to analyze it and arrive at his own decisions.

-        Bob would also solicit Ted’s misgivings about setting firm limits in relationships with employees and vendors, help him understand the problem of not asserting himself, and insist that he do so (if necessary).

It was discovered that most of Ted’s problem was not standing up to potentially conflictual situations.  In other words, Ted was not leveraging his positive social skills to resolve conflict and build more productive ties with his people, vendors and store managers.  To a lesser degree, more knowledge regarding warehouse and distribution management was also needed.  Bob made a training investment along these lines after Ted demonstrated substantive gains in managing key relationships over the four-month (probationary) period.

Epilogue

I have seen similar situations in coaching a business owner like Bob where the employee did not step up and improve.  Nevertheless, a (reasonably) mutually beneficial resolution was achieved.  In either case, business owners soon discover that resolving a festering performance problem benefited the business, and did not hurt the relationship with the employee or spread negative feelings in the organization.  Conversely, people respect their bosses for a genuine performance focus because it enables everyone to be productive and to be rewarded fairly.

In short, loyalty is important, but performance makes the difference.

Delta Consultants is more a development firm than a training organization, particularly in relation to management, leadership and teaming attitudes and competencies.  The key differences between development and training are as follows:

Development emphasizes self-discovery, attitude change, genuine motivation (or emotional commitment) to try more effective behavior, real time experimentation with new skills, timely feedback and, ultimately, the consistent and confident acquisition of new attitudes and competencies.

Training refers primarily to defining, explaining, demonstrating and (sometimes) role playing skills or competencies.  In some regards, testing assumptions or attitudes that can get in the way of applying more effective skills is a developmental component of some training programs.  Nevertheless, training tends to emphasize the explanation and justification of method, which too often does not result in the consistent application of new competencies for most people.  This is because training focuses more on the intellectual dimension while development targets the emotional and attitude factors that truly impact behavior change.

We consider training a good follow-up to a development process that targets key needs, but also engenders the personal motivation, responsibility and commitment to learn and apply training principles.  Without the development piece, we consider training a nice perk which can often serve as a factor in being an employer of choice.  Additionally, for an issue like diversity management, training can be considered a way to minimize liability.

A sound development process often fosters sustained attitude change with improved skill application and related business results (without training).  This is because people can often become more effective when they discover, commit to, and plan for self-improvement.  This is where Delta Consultants truly adds value.

(An interview with Dr. Mickey Fineberg, preprinted from Clique, the monthly newsletter for a national professional services association).

Mickey Fineberg, Ph. D. the Managing Partner at King of Prussia, Pennsylvania-based Delta Consultants LLC, has been a psychologist to businesses for 28 years.

“Fundamentally, we help companies select, develop, and manage their talent,” says Fineberg.

Regarding individual development, Fineberg says he provides executive coaching services both in person and by telephone.  “We’ve discovered that coaching via telephone has some advantages in terms of cost and time savings.  And, the phone also enables people to relax in their own environment without being visually scrutinized.  We’ve also learned how to further hone the listening sense to accurately read and respond to clients when the visual cues are absent.”

“We often coach people for proactive reasons,” he says. “For example, for a high-potential person, a company wants to get as much out of her talent as possible, and may want her to prepare for more responsibility in the future.  So we do coaching around those issues.”

Fineberg also does coaching for what he calls “remedial issues.”

“People that may be derailing in their careers.  They may be adding value to their organizations in a certain way, but on another dimension, they’re difficult to deal with,” he says. “So I could work with individuals who are what our clients consider problem cases, but worthy of investment.  Even if the person presents a problem, there is still an opportunity to help the individual become more effective beyond the original referral issue.”

“About 60% of the time, we do some kind of an assessment that will help accelerate a person’s insight and discovery about the strengths that they can leverage (and how), and the weaknesses that they have to address in order that they not get in their own way,” Fineberg says. “It’s a psychological profile and it relates to the mental, emotional and social DNA that applies to job effectiveness and career potential.”

Fineberg also conducts what are known as 360’s. That’s a developmental evaluation wherein a person assesses himself on various work, communications, management and leadership practices, and then gets feedback from those surrounding him in the workplace, such as the boss, peers, and direct reports. Sometimes indirect reports and customers participate as well.

“A 360 reports on how your practices are currently perceived.  A psychological assessment describes who you are and the implications of that now, but also in the future,” Fineberg says.

“Whether coaching is done in person, by telephone or with an assessment basis, our clients often say that we’re very good at handling individual differences, understanding a person’s mission and purpose, and asking the right questions to help them establish a way of operating that’s going to be more effective for them. We have a way of overcoming resistance and enabling people to discover and experiment with ideas or strategies that can truly benefit them and their companies.”

Fineberg says that when it comes to team coaching, he uses different kinds of approaches and vehicles to help people open up more quickly.

“We get teams to respond not only in terms of any dysfunction that they have, but to go way beyond that in creating more effective ways to work together, and in building competitive advantage for their organizations.  Essentially, this is similar to our philosophy when working with individuals.”

He also mentions that he believes Delta Consultants is unique on the organization development side.

“It’s not just management as parents and what they can do for their employees,” he says. “A lot of what we do is to sensitize employees to their responsibility to improve things for themselves and their companies.  And, we get employees and management together so that they both take responsibility for what needs to change.”

Fineberg says that for the talent selection side of the business, he will either interview and assess candidates in person or conduct telephone assessments with them.  He adds that selection assessment includes both internal and outside candidates for various executive, management and professional positions.

“It typically involves an in-depth interview where we ask a lot of situational questions and a few character development inquiries that go back to what they were like in the family and who they identified with,” he says.  “But I ask mostly business-related, situational and philosophical questions.  I’m trying to get to the way they think about and handle things, which tells me a lot about their attitudes and behavior across various circumstances.”

Fineberg also conducts standardized assessments of intellect to evaluate tactical and strategic problem solving skills.  “I may also give a basic academic aptitude test to gauge their analytical and administrative efficiency and agility.”

The candidate also self-administers a multi-assessment battery of personality, preferences, values, style and attitudes. “I don’t believe in using one assessment.  I believe in going at it from multiple perspectives in order to optimize accuracy and depth.”

Fineberg says the candidate’s time is typically three hours of taking self-administered assessments.  Depending on the job, the process also includes about an hour-and-a-half on the phone, or up to three hours if assessment is done in person.

It’s this attention to building a multi-dimensional profile on a candidate that Fineberg says sets him apart from others in the selection (and developmental) assessment business.

“It’s the degree of utility that I think the client gets out of our report.  They don’t get psychologese or a lot of clinical statements.  They understand what drives a person, but they also get clear implications relative to job function, culture fit, and capability for the future,” he says.

Putting his report in terms a company can understand is a key to the process.

“It’s describing people as they would look like in the job and environment.  How they would be with their direct reports.  How they would be with their peers and customers.  How they would be with their boss.  What their approach to organization would be.  But it’s specific in relationship to job, company and industry issues.  It’s not just a trait analysis with general implications.  It’s very specific and in-depth.  And the reason we can do it is because we use multiple assessments to provide a total picture, and to check and balance each other.”

Fineberg’s clients are typically companies between $10 million and over $1 billion in revenues, with several hundred million being the modal client.

“They’re multi-industry,” he says.  “We serve various financial, service, retail, manufacturing and healthcare clients.  We’ve seen a lot of different businesses and a wide variety of industries.”

By Michael B. "Mickey" Fineberg, Ph.D.
 
What happens when – in your role as a business psychologist – you recommend a salesman for a high impact position, only to learn later that the guy has messed up in a very big way?  It happened to me some years ago.  Did I quit?  Hell no, But I did learn a few lessons.  First, here’s what happened:

By 1992, I had been testing people for various jobs for 12 years.  I became particularly adept at identifying top-notch salespeople for a company that sells and services material handling equipment (forklift trucks and aerial “high lift” vehicles).

We’re talking about capital intensive equipment.  The selling situation is extremely competitive.  You need people who are aggressive, socially adept, financially savvy, and also bright enough to understand the strategic issues in capital purchasing and the role and impact of the buyer-decision makers.  A sales cycle could get quite complex and take somewhere between six to 18 months, depending on the nature and numbers of vehicles required.

For several years, I was on an absolute roll, enabling my clients to select successful salespeople to enter places where they were not invited with the greatest finesse, initiate key relationships, understand the issues and players and work their way to the bottom line:  the close.
 
Then, out of nowhere my Waterloo arrived when Dan (fictitious) showed up for testing.  He appeared to be a glib, engaging and assertive man with a distinct swagger.  Dan possessed the kind of physical characteristics I like to see in a capital equipment seller.  He was stocky, but not too heavy, not unlike a lot of industrial buyers with whom he would be required to build rapport.  The only thing that troubled me a bit was his casual attire: khakis, a white sweatshirt and a pair of black, red and white Air Jordan sneakers.   Now this was around the time that casual environments were just beginning – on Fridays, at most, and certainly not Thursdays, the day of our testing appointment.  Until that time, I was trained to think that such dress could mean:  “I’m an under-achiever.  Don’t expect too much from me, ‘cause if you do, I will surely disappoint you.”  Despite my clothes-makes-the-man concern, I resolved to stay fully objective and let my interview and the test battery inform my conclusions and recommendations.

The data ultimately painted the picture of a very bright, driven, assertive, well-organized and socially astute sales professional.  He was also motivated to hunt for new relationships and to orchestrate complex sales situations.  There were some moody, critical and over-aggressive tendencies, suggesting no more than a highly competitive style which under pressure, could put off the internal support people at the company.  He also showed emotional aloofness and difficulties establishing genuine relationships with people, which could be a problem for a manager, but not for a seller who is a bit of a lone wolf anyway.  His style and comfort with the majority of buyers would, I thought, be quite good natured, purposeful and effective.

I really relish identifying good people, and I put a lot of energy into promoting Dan for the job.  Nevertheless, I also noted his downsides, but felt assured they could be managed in the best interest of sales growth and the penetration of a tough market.  In reference to the dress issue, I learned that Dan had showed up for his interview with my clients in perfectly acceptable business attire.  I thus viewed his clothing choice as kind of cute.  Dan simply decided to dress like a slob for me, I reasoned.

My client gave heed to my recommendation and made Dan an offer.  He accepted.  The new salesman responded quickly to training and made a fast and productive start in the field.  About two months later Dan was arrested for robbing a bank.  That’s when it dawned on me Dan had a strong motivation for wearing those Air Jordan’s.

When my client called to apprise me of Dan’s misdeed, I said:  “If you could keep him out of jail, he would have made a hell of a salesperson.”  The client laughed.  I proceeded to take responsibility for aspects of the test data that might reflect anti-social possibilities, but would normally not lead to felonious behavior.  I even stood firm on Dan’s other assets that led me to recommend him.  I then went on to recommend future steps to avoid such a rare and embarrassing experience.

In essence, having a sense of humor, taking responsibility for the problem, saying what I would do differently to correct the situation and never blaming others or the client, helped me to weather my personal Waterloo.  Yes, I continue to work as a psychologist, assessing and developing business talent.  And yes, I still make mistakes.  But so far – knock on wood – none of them have robbed any banks lately.

Here are some of the things I learned, and some of the answers I have provided to other HR professionals and hiring managers with whom I have shared this experience for mutual learning purposes:


1.      Ditch the Guru Attitude

Some psychologists and test publishers would like to think that it is their test program or (published) tests that make the major difference in telling how a candidate will adjust to a company culture and achieve in a job.  B.S.!  While a potentially important factor, an off-the-shelf-test, or a well-conceived psychologist administered program, only provides 25 to 35% of the predictive information.  The other three remaining factors are: interview performance (collective hiring manager impressions); education and experience; and reference information.  Employers who get sucked into the guru factor tend to over-rely on testing and thus neglect their homework and scrutiny in the other areas.  The result may not be people who rob banks, but more often those who rob their organizations with a negative impact on coworkers, customers or potential customers, or with other forms of counterproductive behavior.


2.      Background Checks

Financial credit history and criminal background checks are important to consider.  While it was discovered that Dan did not have a previous criminal record, he had declared bankruptcy more than once.  Interestingly, this factor was never called to my attention, primarily because my client was over-relying on my ability to predict winners from a testing-only perspective.  Most certainly, the disclosure that he had a touchy financial credit history would have provoked a revisitation of the test data and another look at our informal experiences with him.


3.      Honesty Tests

The research on integrity tests has indicated an excessive rate of false positives.  That is, too many people assessed as dishonest are actually honest on the job.  Professionals and management personnel tend to come out as dishonest significantly more than line production, sales and service personnel.  While the publishers cite studies that honesty tests are not often faked, our experiences indicate that these tests are relatively easy to manipulate.  True, there are the more naïve petty thieves who admit to dishonest behavior on integrity tests thinking that they will appear more (rather than less) honest to their prospective employers.  Dan, however, was not naïve and would have had any of the honesty tests for breakfast.  He would have, as many other managers or professionals, come out with “moderately risky” results (at worst).


4.      Reference Checking

We have found that organizations are more inconsistent with this practice because of tendencies to get only employment verification at best.  We always urge our clients to do this with a guerilla attitude: in addition to HR, call bosses, peers, direct reports, suppliers and customers (as applicable).  In Dan’s case, I did not explore and suggest reference strategies as I often do, because Dan struck me as above average on most key data points.  Again, the guru syndrome was settling in with me and my client as well.  However, I should have, in hindsight, pushed harder for referencing based on his dress, overly casual style (at times) and some data that suggested over aggressiveness and emotional aloofness (difficulty establishing genuine relationships with people).


5.      Gut Instincts

This is a very interesting issue for me.  Looking quantitatively at a variety of aptitude, preference and personality assessments (against the demands of the job) more often supersedes gut instincts as valid predictors of job performance.  Quite often, our clients respond to gut issues and have difficulty making sense out of these signs, only to have them clarified at times by our assessment information.  However, back in 1992, I think I was over-reliant on quantitative assessment data and tended to be insufficiently sensitive to my feelings (gut instincts) in working with various candidates.  For a lot of reasons, I have learned to integrate my instincts as a more prominent element of the assessment process.  This has enabled greater precision in describing people and, most importantly, greater predictive validity for our clients.  Nevertheless, objective assessment analysis typically has greater weight.  For this reason, we always have one psychologist who has not worked directly with the tested individual, review and comment on test data.