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Games at work in the LIBOR scandal

barclays3_2277632b"Such behaviour would only be possible if the management of the bank turned a blind eye to the culture of the trading floor. The standards and culture of Barclays, and banking more widely, are in a poor state.”

- Treasury Select Committee's 300-page report on the Barclays Libor scandal, 20 August 2012

The London Interbank Offered Rate (LIBOR) forms the basis for 550 trillion USD (yes trillions) of mortgages, credit cards, and other financial transactions. Over the summer it became clear that Barclays was systematically “rigging” this rate and paid a fine of 453 million USD.

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Success stories in reducing political games

Iimg_cases_de_sucesson the past few weeks, I was in the United States visiting companies that operate with an innovative organizational model. One of the companies I visited was a co-op called REI, Recreational Equipment Inc. Founded in 1938 by 23 mountain climbers, REI specializes in selling clothing and equipment for nature sports. The chain has 123 stores in 30 US states; in 2011 it had sales of 1.8 billion dollars, 11 thousand employees and was the 8th company on the list of Fortune magazine’s “Best Companies to Work for” in 2012.
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The interesting thing is that it manages to do all this being a cooperative of members. In other words, anyone who is interested (customers, employees, suppliers) can become an “owner” of REI for 20 dollars. Each March, the active members receive dividends (typically 10% of their purchases at the chain). Obviously, I became a member, and received a pamphlet explaining my rights and duties. Right at the beginning of the pamphlet, there is a headline that says “the Co-op difference” and introduces the following text: “being a co-op means that we can run our business differently. We answer to you, not to shareholders or a quarterly bottom line. So we can take the long view and focus on bringing people to outdoor sports and helping to preserve nature.” The energy that I felt in the store, from employees and customers, was that of a great community, with everyone focused on the same objective.

img_zapposI also visited Zappos in Las Vegas, an internet shoe selling company, which was purchased by Amazon in November 2009 for 1.2 billion dollars. They have more than 6,000 people and are the 11th largest company in Fortune magazine’s “Best Companies to Work for” in 2012. In spite of the acquisition, the businesses are kept separate, since Amazon knows that the unique culture of Zappos is what makes the difference.
At the company’s site, we found the following phrase: “We’ve been asked by a lot of people how we’ve grown so quickly, and the answer is actually really simple. We’ve aligned the entire organization around one mission: to provide the best customer service possible. Internally, we call this our WOW philosophy.” They define their values as “Key values of the Zappos Family,” and it includes some like “Deliver WOW through service,” “Create fun and a little weirdness” and “Be adventurous, creative and open-minded.”
It is interesting to note how in both cases, in spite of them being companies with very different business models, an engaging purpose, a community environment and a close relationship with the customer are critical and lead to cooperative, constructive and trusting work environments. And a positive and trusting environment reduces anxiety and thus the number of political games at the organization (meaning time and value thieves).
Some companies manage to create a virtuous cycle: a better climate and greater collaboration among the “employees,” which results in fewer political games and brings a greater connection to the customer, reinforcing the pride of belonging of the collaborators, and so on. How can this same effect be achieved at your organization? Maybe the examples of REI and Zappos can bring some inspiration. The organizations that are able to do this will, without a doubt, prosper in a world in which people are becoming more and more influential, and want to have a voice and find meaning...

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Executive dysfunction and Games in the C-suite

 
egoistIn “Games at work” we pointed out that senior leaders – and CEO’s in particular -  are vulnerable to game playing due to two factors:


(a)    the anxiety they feel resulting from great accountability and great privilege. Games can be seen by the games-player as a way of reducing anxiety in the short run (only).
(b)    They may possess ego’s that veer towards narcissism, hubris, and paranoia when under stress.

As a tragic example of this let’s examine what happened at Pfizer

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‘Mice-Men’ Management


micemanLast week, I had the opportunity to talk with two senior executives of large Brazilian companies in the food and construction industries. Part of our conversation was on the corporation’s performance management process and to what extent it impacts the culture of the organization.
Simply put, the performance management process is typically the following: someone (most probably your boss) will set your goals and you will work all-yearlong to meet them. He will then assess you and assign you a grade that will grant you specific consequences

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Corporations and Psychopaths?

attention_manipulation

A recent scholarly article (Clive Boddy, The Implications of Corporate Psychopaths for Business And Society: An Initial Examination And A Call To Arms) gives an interesting perspective on Games at Work, and the breeding ground that modern corporations can provide. A working definition of psychopaths is “manipulative, arrogant, impatient, impulsive and charming and have no conscience”.

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How to release energy at your company

como_liberar_energia_na_sua_empresa_1In any organizational environment, people play political games. Learn how to avoid this. Mauricio Goldstein and Phil Read

In any organizational environment, people play political games. It is in our nature to play these games when we are in groups, when there is stress and anxiety, and when there are “awards” to be earned (promotions, favor from the boss, financing for a project, a new contract, and so forth).

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Turn a Blind Eye

blind_eyesBy Phil Read, September 2011

The phrase to “turn a blind eye” is said to originate from an incident involving Admiral Nelson. Early in his career he had been blinded in one eye. In the Battle of Copenhagen, a signal was sent to Nelson (using of course the traditional semaphore) giving him the order to retreat when needed. Nelson, not wanting to retreat, lifted the telescope to his blind eye, and declared that he could not see the signal. The popular meaning of the idiom then is the process of ignoring inconvenient facts or activities.

In organizations this behaviour manifests itself as a game.

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Political games in Supply Chain Management

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Omar is an executive, with a lot experience in Supply Chain. He was the president of a consulting company and today is a partner of Vista Consulting. Mauricio spoke with him about his experience with Political Games in Supply Chain.

 

Mauricio: I would like you to tell me a little about Supply Chain, since you have a lot of experience in this industry, specifically what type of Supply Chain games you have seen, and where they come from. 

Omar: The own nature of the Supply Chain function executive is to manage conflicting objectives. The executive of Supply Chain is the mediator in the chain of value of the operation. This means he is in the middle, between the production director, the industrial manager who needs to increase his productivity to the limit with an item. (In other words, the ideal for him would be to produce just one item, without stopping the production line; then he would achieve his best productivity goals).

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Games at work over the holidays

 

holidaysThe holiday season is typically an enjoyable time, a chance to relax and de-stress, spend more time with family and friends, a moment greatly awaited by the professional community. On the other hand, this time can also be a period of big danger in the office. Political games tend to run high and become even more prevalent in the workplace, some people taking advantage of those who are absent.

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What made the difference to get Ford out of the crisis?

ford Alan Mulally, Ford’s CEO since 2006 managed to get the company back on tracks with 6,6 billions of dollars of profit in 2010. When he arrived, people would be reluctant to talk about problems during the weekly global meeting.  Games were being played, so when problems came up, it was often too late…

 

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Why UBS lost USD 38,000,000,000?

Games_at_Work_-_UBSBy Phil Read

On 18 April 2008 UBS issued a “Shareholder report on UBS’s Write-Downs”. In 2007 alone UBS announced losses of 18.7 B USD in relation to the US residential sector (in total it would amount to over 38 B USD – the second biggest loss in the history of banking). The report was an attempt to provide shareholders with a perspective on what had gone wrong.  In November 2009 a Consolidated Securities Class Action Complaint was filed (423 pages) in the United States District Court Southern District of New York alleging fraud by officers of UBS.

Together these reports reveal a number of games that contributed substantially to this loss.

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Are Games in the work place a real problem? Aren't they just "natural"?

games_naturalBy Phil Read

It is natural to play games, but it is not productive - they are like bad habits. They are not productive because they distort or corrupt critical business processes such as strategic planning, budgeting, decision making, performance management, people leadership, and change management.

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Games in the Matrix

Games_in_the_MatrixBy Mauricio Goldstein

Since the beginning of the year, Ricardo has been the new country manager for the Brazilian Consumer Corporation, a consumer goods company. When Ricardo was hired, his boss told him he had an important mission: make the company less bureaucratic. Unfortunately, Jorge, the CFO for the company in Brazil, doesn’t share the same opinion. He thinks the company is not bureaucratic and has just performed some insignificant abridgement to the processes he’s in charge of, playing a “token involvement”. Well, obviously, Jorge doesn’t share openly his opinions with Ricardo and always comes with a convenient excuse for the processes which still remain bureaucratic!

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Games at Work in Lehman Brothers

By Phil Read

Lehman_BrothersAs the anniversary of the collapse of Lehman Brothers has just passed, I think it is important toreflect on the casuses of its demise. Many explanations have been offered, but one important angle has been overlooked. Lehman Brothers was in the grip of four games, which were played consistently by the senior management over at least the last two years.

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A game of big payoffs: private profits, social losses

A_game_of_big_payoffsBy Philip Read

In  “Games at Work” we highlighted that games have certain characteristics: manipulative behaviour, paradoxical consequences, repetitiveness, contagiousness. There are payoffs in games, and one sure sign that games are being played is that everyone is pretending they are not. Unfortunately we now have a very destabilising game being played on a grand scale which we can call “Private profits, social losses”.

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Games at Work: Too Big To Fail

Too_big_to_failBy Phil Read

One of the institutional games that has come into the spotlight over the last year or more is the game of "too big to fail". This is the game where a large financial institution takes on excessive risk.

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Games at Work in the movies

Games_at_work_in_the_moviesBy Mauricio Goldstein

Games at Work are part of our daily lives, and we often do not realize it. They exist in our personal relationships, in our business dealings, and even in our leisure.

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Games at Work Interfere with Key Business Process

by Mauricio Goldstein and Philip Read

In this first blog we want to describe how specific games can interfere with business processes: Strategic Planning, Decision Making, Budgeting, Performance Management, Leading people and Driving change.

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Games of the Month

Token Involvement

To play Token Involvement, a manager conducts opinion surveys, focus group, or involvement meetings to communicate that "your opinion matters", but these activities are done only to make people feel involved rather than actually to involve them. The real intention is just to get rid of the complaints and for managers to show their management that they´re doing the "right" thing-involving their people in the decision-making process. The same game is played when leaders involve their direct reports supercially, soliciting their views on department strategy but relying exclusively on their views on department strategy but relying exclusively on thei own view. Cynicism becomes employees´ultimate response to this game, and they lose respect for management. Perhaps evens worse, when management really needs employees to be committed and contribuing to a major project, they have great difficulty securing this involvement.

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Praise for Games at Work

jacopoA terrific read not only for senior leaders and executives but also for employees seeking growth in complex organizations. Goldstein and Read dissect the interpersonal dynamics that affect a company’s performance, provide a framework to understand the games that are commonly played in businesses around the world, and offer practical tools to correct these behaviors and improve the organization’s effectiveness.

Jacopo Bracco Executive Vice President DIRECTV Latin America

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