Interviewed on Radio 4’s Today Programme to promote his upcoming book, “A Colossal Failure of Common Sense”, Larry MacDonald, the ex VP of trading at Lehman Brothers, revealed some of the boardroom secrets of the financial institutions that have resulted in the current economic meltdown. But, the behaviours he describes, and their consequences are actually much more common. The only difference with Lehman’s is the extent of the impact.

Describing the CEO at the time as unprepared to listen to criticism and as creating an “either get your head down and get on with your job or lose both” culture it’s not hard to see why warnings made as early as 2005 were ignored, and later on not even expressed any more. A bit of research into Richard Fuld, Lehman’s CEO, revealed an individual who is described as reclusive and who in his pre banking career was dismissed from the US Air Force for a fist fight over a misunderstanding. At work he is described as so single minded and focussed that he has few interests outside of work. As Business Psychologists we see these behaviours so often in senior leaders: those people that become detached from others around them and make decisions in isolation, not sharing their thinking, and those that are so engrossed and passionate in their work that anything approaching bad news can lead to such disappointment and frustration that tempers flare and only good news is well received. But these people get to the top. Why? There is likely to be an element of managing their impact as they move through the ranks, but primarily I think it’s because the negative aspects are ignored because they deliver results. Many businesses reward task leadership over people and thought leadership, an approach which actually encourages such behaviours. The changes that are needed therefore, are a shift in what is rewarded as well as early leadership development interventions because by the time people have made it it’s too late.