Psychology in the city

Growing pains.

In these times of global financial crisis and banking scandals, some understanding and solutions may come from the science previously frowned upon: psychology.

Since 2008 the financial world and banks in particular have been in crisis. The reaction in the public has been fierce, angry and accusing. Bankers are now shamelessly being called all sorts of names, even in the quality press. The man in the street feels dissociated with people in banking as they perceive them. That uncomfortable feeling of dissociation is a normal coping strategy where understanding fails. “These people aren’t like us,” most seem to feel. A lot of people are now looking at psychology to help them understand.

The question of what was going on and what the people in banking are like is a very valid one, but one that will take a long time to answer. The answer will evolve with time and perspective. Right now, arrows are pointing at a few individuals: the big bosses with big bonuses. They came under scrutiny in the first round of this on-going crisis and it seems that many didn’t understand the prevailing mood building up against them. That led to speculations of many of them being psychopaths. There is in fact quite a bit of scientific research to support that thesis. Several scientists have found similarities in personality traits between psychopaths in hospitals and prisons and top executives. Some personality disorders were found to be even more common in managers than in criminally or psychiatrically monitored psychopaths: histrionic PD (using superficial charm, being insincere, egocentric and manipulative), narcissism and compulsive PD (being perfectionist, rigid, stubborn and dictatorial). That makes nice headlines and always draws in lots of comments, but it is worth looking into it deeper. The scientist Hare has developed a questionnaire for measuring psypathology and found 1 per cent of the average population to show psychopathic tendencies. In executives it was 4 per cent. He presumes it might be a lot more in the financial world, but he has no data to back that up. He made a guess of 10 per cent.

It makes you wonder if only 4 to 10 per cent of a population can make such a difference. They can, with a majority of people being of a more neurotic disposition and therefore enjoying being shown the way. We have few leaders; but leaders have many followers. It is just how it is; it has always worked like that. Outspoken leaders, decision makers, trendsetters, psychopaths: they show a doubting crowd how things should be done and they have an impact. In a corporate world they set the tone for culture and competition. If 20 colleagues fight for one promotion, and one of the colleagues gets the knifes out, the others are likely to follow. However, having worked as a coach and employee wellbeing professional for nearly two decades it is my observation that such corporate culture is still strongly dictated from above. The knife-fighters make promotions more easily; the corporate arena has been moulded around ruthless fighting. The competition between companies was and is a hard-fought and ruthless one; that favours ruthless personalities inside the company.

Top-bankers have been called all possible insults, but we do need to take a step back. This hard-paced competitive world of banking did manage to get the absolute most out of people. With their locomotive pulling power they did manage to keep economies thriving. Progress and developments have been made in the financial world. Moreover, it is not unusual to find surprising and frightening character traits in groups of perfectly integrated and non-criminal people. Typically surgeons and butchers could find in their jobs outlets for a deeper rooted aggression. Extreme personality traits can therefore be applied perfectly functional and acceptable. In psychology we call it sublimation. No one less than Friedrich Nietzsche came up with the term first; Freud and Jung developed the concept further.

Our financial world is certainly driven by success. It feels however like things have gone too far and that shouldn’t surprise. Success breeds the desire for more success. Neuroscience teaches us how success heightens the release of testosterone in brain, which in turn hightens the release of dopamine. Dopamine triggers the reward centre in the brain. No wonder they now call it casino banking: people on a winning streak in the casino turn into strange creatures as well, just like some of your relatives do when playing certain board games. In the past I have raised the argument for having both a reward and punishment system for our top executives. One does not work without the other, major psychologists like Pavlov and Skinner teach us. It seems there are too many rewards for the top guys, and not enough punishments foreseen in their contracts. A reward-only system will breed greed, and I believe that is exactly what people perceive in bankers right now.

In the very competitive lower echelons of financial institutions and certainly on the trading floor, employees are approved of on the basis of how much money they bring in rather than how they behave. Such lack of control invites border-crossing behaviours. People are a lot more likely to do the wrong thing or eat the sugary bun when they think or know nobody is watching. And when they are ordered to hurt others, many are likely to obey that order, we know from the very famous Milgram experiments. We now know that orders were giving by executives operating in a psychopath-dominated environment. The ones that got hurt, I guess, are the customers and even whole national economies. I feel absence of supervision works a silent approval of behaviours that are potentially damaging to others.

Companies are money-making machines; talent is their fuel. They have learned over the years to use the ultimate strategies to get the talent in and to get most out of talents. Up until recently they gambled massively on satisfaction. It was a game of seduction, lust and gratification. The carrot on the stick was the Ferrari-and-champagne-lifestyle, the ultimate almost mystical goal the boardroom. Since the crisis, I see in more and more companies how that strategy has made way for one of fear. Many people have been sacked and anyone can be the next one at any time. As such, our companies play on what Freud found to be the two main drives of humans: libido and fear of death, Eros and Thanatos. Cunningly they play on insecurities and family-relationships as they lure highly talented people at the end of university time and offering them a chance to show mum and dad they can stand on their own two feet. Parents are constantly worried about how their kids will survive after they are gone; they are seeking proof that their kids will be all right. Our big financial centres offer that. That the reality for these young people often turns out quite differently is a message that can difficulty be disclosed to anyone, let alone the home-front.

No crisis is endless, and we will get out of this complicated cluster of crises too. And as with every crisis, we will come out damaged but stronger, better, smarter and more mature. We will not have a revolution; I don’t feel we are ready for that nor need that. Revolutions are too often sign of immaturity. Through all the criticism the British and global financial world have been bestowed upon The City in the past few weeks, it is all too easy to lose track of the fact that the financial heart of London has been a trendsetter in corporate culture for decades. Through the avalanche of criticism, that is made to sound like a bad thing. It isn’t. Through the competition driven evolutions of the past decades, also technical ones, we have developed a banking sector that has been propelled forward in complexity but also ability. Our financial sector and corporate world are now advanced and outstanding; it will take us some time to learn to manage and control it efficiently. The desire to just get rid of the existing system is a kneejerk reaction, a flight reaction. We are going to make do with the one economic system we’ve got and the millions of bright, talented and righteous people working in it. We will have to learn and live with it, even though right now many of us have lost sight of how excellent it all is. It is through the basic psychological drives upon which our economy has played so cunningly that a more mature personality develops. It is probably that more mature personality our corporate world is searching for now.

Our professional sectors will come out changed; I feel it will all be less extreme, a bit more boring. There will be more morals and less champagne, more mainstream and less party. The economy is a long winding road. Going too fast, we seem to have run off the road –again. On a very bendy road, even with a Ferrari, it is better to slow down and stay in the middle of the road as much as you can. It takes you to through the curves and to your destination much faster and much safer.  As with all evolving sectors in our day and age, the economy will find inspiration for growth in non-economic fields like philosophy, psychology, mathematics, physics, biology, electronics provided they accept those sciences for what they are. As a psychologist, I feel the corporate world has not always wanted to understand and correctly implemented my beloved science. They seem sometimes to have opportunistically tamed psychology and created a processed version, foregoing many potential benefits of such rich and innovative science. Incorporating insights from non-economic fields in an open and accepting way will reconnect the financial and hard corporate world with a wider socio-economic and global reality, sense of which appeared to have been lost.

The fact that the pimple burst so publicly in London could prove to be the best news for London in the end. It may not look good right now, but London will hopefully see itself forced to become the most ethical and trustworthy financial centre in the world. The others will be lagging behind. If London gets this exercise right, it will remain the most important financial centre in the world for decades to come. But the exercise might hurt a lot: growing pains.

City workers in london. Photograph: Getty Images.

Peter Sioen is a career & management coach and psychologist working for Mvantage Ltd in London; and international TV, radio & news media commentator with a self-coaching book in preparation. Blogging on http://petersioen.tumblr.com/

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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.