Sometimes things occur which are so typical and so representative of a problem that one has to comment on it. I am referring to the Paul Flowers case in the UK. For my international readers not familiar with this, the basic facts of the case are that a man called Paul Flowers was appointed to become chairman of the Co-operative Bank in the UK. Mr Flowers attracted attention in two ways last year. The Co-operative Bank is a well-known ‘ethical’ bank in the UK and was led (by Mr Flowers and the Board) to require a £1.5B bailout (and so become a minority stakeholder in itself, only owning 30%) when it dramatically and financially over-extended itself. Further, Mr Flowers was then caught in a newspaper ‘sting’ and found to be extensively using illegal drugs.
If this weren’t enough, two more things: when Parliament came to investigate what happened via its Treasury committee, it found that Mr Flowers had no qualifications or experience to be a banker and when asked directly what he estimated the size of the Bank’s assets to be, Flowers replied £3B when in fact it turned out to be £47B – a pretty incredible discrepancy for somebody at the top. But worse, we learn from Rodney Baker-Bates, the bank’s former deputy chairman, who voted against and then resigned over the bank’s disastrous efforts to overreach itself (the acquisition of 630 Lloyd’s Banking Group branches), that the appointment of Mr Flowers was on the basis of he “did well in psychometric tests”! As the Treasury committee chairman Andrew Tyrie observed: Flowers proved to be “psychologically unbalanced but psychometrically brilliant”.
Think about that: be “psychologically unbalanced but psychometrically brilliant” and consider how corporates rely on this tool, and indeed how HR rabbits on about its – or their (since there are many flavours) validity. Next time you hear an HR or other director go on about the validity of psychometric, do remember to point out: so if I understand what you are saying about validity, then who we are looking to appoint may be somebody who is be “psychologically unbalanced but psychometrically brilliant”? Look out for the withering scorn with which that is greeted. But why not?
The thing is: this is not likely to be an isolated case. The banks are famous for using psychometrics and spending a fortune on them, and to what end? We know from the financial crisis all about ‘Fred the Shred’ and the other less, or lesser known psychopaths and ego maniacs who captained their ships – dreadfully – over that turbulent period. And doubtless, they were appointed on the same basis. Indeed Sir David Walker, now chairman of Barclays, recommends that institutions use just such ‘objective’ methods of analysing candidates. Frankly, if that’s what objectivity achieves, might not subjectivity be better?
Of course the psychometric industry has already gone into overdrive to limit the damage of this most damaging revelation. Dr Mark Parkinson, a business psychologist who works on senior level recruitment in the City, told the Financial Times that “responsible employers would never use the psychometric tests in isolation… one would expect due diligence”. Well, I guess he would say that, wouldn’t he? Common sense perhaps might precede even due diligence! What we have with these psychometrics is fundamentally a lazy form of stereotyping. We pigeon-hole people and then imagine we know all there is to know about them. The tests produce a static sort of result. As long as we realise that the result is a model, is a map (and not the territory, not the ‘thing’ or the ‘person’) then all is well. But that, is almost beyond human capability; the capability of busy people with jobs to do, reputations to establish, and easy knowledge – like psychometric knowledge – to demonstrate.
It is for this reason too I have an axe to grind. Namely, it would be far more difficult to appoint Mr Flowers following his completion of a self-perception inventory, than a psychometric. Built into the self-perception type tests is the notion of change and of subjectivity, as they are after all what is called ipsative: they are comparing yourself with yourself! What could be more subjective? But the brilliance of this is that there is not a stereotypical profile, and even if there were it can change! Thus self-perception inventory have a short currency and this is good when considering appointments – think, they only allow Presidents of the USA to be in post for two terms. Why might that be? We need to think of the now and the context if we are going to make sense of a profile and its relevance to a post.
The good news is that ‘Psychometric Flowers’ points to the need for a new dawn in tools we need to evaluate candidates, and there are many self-perception inventories waiting in the wings, their time rapidly about to dawn.