The crisis at Barclays bank has consumed the media over the past few days. It has led to the same “banker bashing” that seems to be typical of media coverage of the global financial crisis. Official responses to such attention often seem to be “knee-jerk” reactions, such as the resignation of Barclays CEO, Bob Diamond. It is easy to blame the morals of bankers but seldom do the stories actually tell the full story about human motivation and behaviour. Most importantly, they fail to lead to workable solutions.
The work of renowned psychologist BF Skinner demonstrated that animal and human behaviour is learned by reward and punishment. Essentially, we will repeat behaviour that ‘works’ to get more of something we want (whether that be food or money) or to avoid something that we don’t like (other people’s aggression, for example). Fixing interest rates helped those involved to sustain or improve financial performance. It may also have helped avoid unpleasant consequences of losing money (such as the negative reactions of highly stressed management). Because it worked it was repeated. Furthermore, there were no negative consequences of acting against the “rules” at the time the actions were taken. The behaviour, therefore, makes sense: it can be understood without the need for labelling anyone “selfish” or “immoral”.
“We create organisations and then they create us”
Over the past 20 years, psychological research has demonstrated how language enables us to create rules that influence our behaviour. Rigidly adhering to a rule that success is defined by financial performance makes prospects of losing a significant cause of anxiety and can lead to attempts to avoid such a loss. Rules and associated goals are influenced by the groups we inhabit and this means that definitions of what constitutes success, achievement or appropriate behaviour spread throughout organisations. Behaviour that leads to desired outcomes, even though it contravenes regulations, is repeated.
Principles of learning, combined with an understanding of the way we create rules and goals will direct us towards new solutions. The financial system will need to make a coordinated effort to refine the criteria by which they reward and punish certain behaviours. Rewarding financial performance above all else is clearly not enough. However, we also need to use our ability to generate new rules, through a consideration of values. Values, as defined by the creators of Acceptance and Commitment Therapy (ACT), are expressions of what people really care about that can be clearly linked to actions that they take. Whilst many organisations have ‘value statements’, how many of them truly ask their people to consider their own personal values, how they complement those defined by the organisation’s leadership, and then to define goals and behaviours aligned to those values? This is important for leaders and employees alike if changes in behaviours are going to occur across the whole system. In my experience as a psychologist, very few people have spent time thinking in depth about this, and this is one area where an understanding of the workings of the mind can contribute to a solution that really works.
Moran, D. J. (2011). ACT for Leadership: Using Acceptance and Commitment Training to develop crisis-resilient change managers. International Journal of Behavioural Consultation and Therapy 7, 68-77