How to spot a corporate psychopath before you hire one.

I gave a talk at the 3rd International Conference on Education Innovation (ICEI 2019) in Indonesia in which I made the bold statement that the Arthur Andersen collapse was due to a failure of emotional intelligence. Little did I know that there was a former Arthur Andersen employee in the audience who knew the truth.

Arthur Andersen had rightfully earned its reputation as the gold standard in ethics and corporate governance. A well-known story is told of how Arthur Andersen refused to approve a questionable transaction by his most prominent client, the president of a local railroad, saying there’s, “not enough money in the city of Chicago to make me do that.”

Two times throughout its history, Arthur Andersen added management consulting to its audit services. The potential conflict of interest was [assuaged] by codifying all its processes into the Method, which was managed in every AA office by a senior partner known as the Partner for Probity.

Andersen’s two arms, Auditing and Consulting, ultimately separated. It was Andersen Auditing’s second foray into consulting that did it in. To be honest, it wasn’t the consulting itself, but the man who led the charge.

The fall of Arthur Andersen

Andersen’s near-century of unshakable integrity was brought down by a single man with an eye for profit over probity.

In 1989, Jim Edwards, the new head of Arthur Andersen’s US audit division, walked out onto a stage with a live tiger on the end of a chain, as “Eye of the Tiger” blared from speakers, it became clear that the new Andersen was nothing like the old.

To do better than last year, Edwards roared to those assembled in the ballroom, would “require the eyes of a tiger, eyes that seize opportunities, eyes that are focused on the kill.”

In its effort to meet demands for increased profit, Anderson sacrificed its need for impeccable accounting standards with its clients’ desires for increasing profits. Employees who didn’t pivot to the new vision were let go in large numbers. As a result, Andersen would become inextricably tied to the Enron, Worldcom, and Sunbeam scandals.

How did Andersen fall?

The Myers-Briggs Personality Test, which characterizes each employee and candidate as one of 16 personality types, was ingrained in the culture of Arthur Andersen. By identifying one’s type, you can then communicate with that person in the way they can be most productive.

But Myers-Briggs could not prevent the hiring of Jim Edwards. After all, it’s primarily a profiling technique that predicts how people make decisions. It doesn’t help develop or grow one’s emotional intelligence. And, far more dangerously, Myers-Briggs fails to identify the Jim Edwardses of the world, i.e. the corporate psychopaths.

A better profiling technique would have pegged Edwards as the danger he was. Such a technique can be found in the 7MTF, the 7 Motivational Temperament Factors, based on the Humm-Wadsworth model of emotional intelligence.

According to the Humm-Wadsworth model, our personalities are based on a combination of one or more of seven temperament component\s, the Socializer, the Doublechecker, the Artist, the Politician, the GoGetter, the Engineer and the Regulator.

In short, Socializers are extroverts who thrive on communication. Doublecheckers need security. Artists are creators. Politicians are competitive, assertive and want to win. Engineers conscientiously complete projects. GoGetters are after material success, looking for what’s in it for them. And Regulators strive for order and follow the rules.

Most of us possess a combination of two or more of these temperaments. For example, many successful salespeople are both extremely social and highly motivated to make money, corresponding to both the Socializer and GoGetter components.

The problem arises when a person has a combination of a high GoGetter component with a low Regulator, as Jim Edwards had. GoGetters doggedly pursue profit, whereas Regulators make sure that standards and proper procedures are followed. Not only did he possess this dangerous combination, but he surrounded himself with others of similar disposition. Edwards wanted to win at all costs and compromised Andersen’s impeccable reputation to do so.

How to spot a corporate psychopath before you hire one

Applying the 7MTF model in the hiring process could have prevented Arthur Andersen from hiring Jim Edwards. In fact, it can prevent any company from hiring a corporate psychopath. Here are some things to look out for when assessing new hires.

Check out their LinkedIn profile for frequent job changes and few, if any, recommendations from senior executives. Corporate psychopaths create great first impressions, but the honeymoon ends quickly. They have a low work ethic, tend to take credit for other people’s work, and blame others for their mistakes. As a result, corporate psychopaths don’t stay long in any one position.

Check the education section of their resume. Chances are this section will be thin. Degrees, awards, and GPAs are earned through the hard work that most corporate psychopaths avoid. Further, this section is easily verifiable, so do your due diligence.

Corporate psychopaths often win the interview process on charm alone. They give themselves away, however, by name-dropping and sharing evidence of their material success. At times, even their dress will give them away. Corporate psychopaths tend to dress in red, such as wearing a red tie and often accessorize with gold.

If a job candidate checks off any of the above boxes, be sure to speak to previous employers beyond the references the candidate provides. Even better, have them take a 7MTF personality test before hiring.

After my ICEI 2019 talk, a man came up to me and said, “I used to work for Arthur Andersen.”

I braced myself for what was to come.

“Everything you said is true,” he said, “and exactly how it happened.”

Many mistakes in corporations are due to failures in the hiring process. The greatest hiring mistake in my lifetime was the collapse of Arthur Andersen in 2002. The company regarded as the Gold Standard in the USA for ethics and corporate governance went from 85,000 employees to 16 in one year.

By applying the 7MTF (formerly Humm-Wadsworth) model of emotional intelligence, you too can spot corporate psychopaths before you hire them.

Chris Golis is a graduate of Cambridge and the London Business School and now lives in Sydney. His first career was in IT where he progressed from systems engineer with IBM to a salesperson with ICL, to a Divisional General Manager with TNT. 

He then switched careers to Financial Services becoming an investment banker with BT Australia and then a venture capitalist for 25 years, where he was the director of some 30 private and public companies following the raising of five venture capital funds. In 2007 Chris semi-retired and decided to pursue a vision of lifting people’s emotional intelligence.

In 2020 he used the lockdowns to produce three online video courses on Practical Emotional Intelligence using the 7MTF technology for Leaders, Managers and Salespeople.