Posted on: Monday, August 30, 2004
Firms wary of executives' 'dark side'
By Jayne O'Donnell
USA Today
Companies are more interested than ever in hiring ethical executives, folks most certainly not cut from the same cloth as, say, Andrew Fastow or Scott Sullivan.
But it's no easy task predicting who might be prone to the kind of criminal behavior being alleged at companies such as Enron and WorldCom. Unlike picking a "most likely to succeed" job candidate, avoiding the ones most likely to lie, cheat or steal is tricky, say executive search and profiling experts.
"If there's no prior history from which to work, it's very difficult to have that kind of prescience," says David Carpe, founder of Clew, a competitive intelligence consultant. "They may have been engaged in practices that defrauded investors, but without reliable sources or strong evidence, you won't know how to pinpoint the next white-collar debauchery."
Still, the experts have their ways. There are new psychological tests and interviewing and investigation techniques designed to gauge the chance that a seemingly stellar candidate for an executive-suite job is likely to steer off an ethical or legal track.
Management consultant Robert Hogan uses personality questionnaires to determine people's leadership potential. He also uses them to unearth any "dark side" characteristics.
The Hogan Assessment Systems survey asks participants to answer a series of questions intended to probe their inner emotions. For instance, candidates might be asked whether the suffering of animals bothers them. If not, that would be considered a "wrong" answer, which could be followed up with questions looking for histrionic and narcissistic tendencies that might suggest a psychopathic personality.
"Most ... bad guys are incapable of remorse," says Hogan, whose tests are used by many Fortune 500 companies. The Transportation Security Administration uses them for airport screeners. "That's the psychopath: incapable of self-reflection and incapable of admitting mistakes," he says.
The right questions
Tests alone aren't enough to weed out the bad eggs, so skillful interviewing is needed. For example, unless it's in a public criminal file, Carpe says, you can't ask someone whether they have done something unethical and expect a straight answer. But if you ask for a response to "high-quality hearsay" about them, Carpe says, it can be illuminating to watch them squirm.
He has other ways of making people talk. Carpe, whose company researches and profiles leaders for large corporate clients, says executives will often give information about themselves that is exaggerated, if not untrue.
He says a prospective chief financial officer, asked whether she had managed an initial public offering, might say she had. But an interviewer, by asking about the mechanics of the road show, could learn the candidate had only a supporting role.
Another tactic: Provoking executives into rationalizing, defending or perhaps "gloating" about successes will often lead to talk of borderline, if not blatant, unethical behavior, Carpe says.
How to vet résumés Peter Turecek, a managing director of investigations and intelligence at Kroll, says résumé fraud became big business in 2001, when news broke that former Sunbeam CEO Al "Chainsaw" Dunlap hadn't included on his résumé two jobs from which he was fired. Still, Kroll's clients have "different thresholds of pain" when it comes to potentially damaging disclosures by executives or job candidates, Turecek says. Lying on a résumé or cheating on a spouse may seem like deal breakers to him, but companies sometimes have a different view. Carpe says it's surprising what people will take off their résumés and think no one will notice. He uses other background information they provide to "track down all the omissions," like the years they were out of work, or — as in the case of an employee at one of Turecek's former clients — in prison. Sandra Davis, CEO of MDA Leadership Consulting in Minneapolis, uses Hogan's tests to help pinpoint leaders but believes a "true con artist" might get through some of the questions. So she asks them what they've done when their ethics were challenged and finds the answers can be telling.
"You begin to understand how they approach values trade-offs," she says.
Davis says executives who have an "inordinate need to be center of attention" are also a problem.
"When push comes to shove, they wall themselves off, they become paranoid and worry about protecting themselves at the expense of the organization," Davis says. "Executives with character flaws like this shouldn't be entrusted with leadership roles that affect thousands of lives."
