There is no such thing as a rogue operator

Last week, the News of the World suspended one of its reporters after complaints were made about illegal phone hacking. Senior managers at the newspaper claim that this is a one-off incident which they are treating as a potential breach of discipline. That’s the same line the paper took last time this happened. Two employees were sacked and the NoW’s managers claimed that they knew nothing about the use of phone hacking. The sacked journalists were portrayed as rogue employees who overstepped the mark and contravened the paper’s usual ethical standards.

Once again we are being asked to believe in the idea of the rogue operator; the employee who, in furthering the employer’s interests, uses illegal or immoral methods which are not sanctioned by the company.

The banking industry is full of rogue trader stories. Barings’ mangers claimed that Nick Leeson was an out-of-control maverick when he lost the bank £860m. Société Générale said something similar when Jérôme Kerviel blew a €4.9 billion hole in its balance sheet. These men, so we were told, were one-off eccentrics who just didn’t know where to draw the line.

The important difference between so-called rogue traders and workplace fraudsters is that the former use unethical methods to further their employers’ goals. Rogue traders don’t steal from their employers; they simply use immoral or illegal tactics to achieve the objectives they have been set. When this goes wrong and, more importantly, when the wrongdoing becomes public, the employers quickly deny all knowledge, claim that the employees are renegades and insist that such practices are highly unusual in their organisations.

However, these claims are at odds with everything we know about the way organisations work. Most organisations contain employee behaviour within a set of cultural norms. These norms are reinforced, sometimes explicitly but more often implicitly, by the organisations’ leaders. Employees very rarely operate outside these norms. They might push the boundaries a bit but, apart from the criminal or psychopathic few, it is unusual for workers in any organisation to violate these unwritten rules. If they do they are usually punished in some way.

Managers, too, are strongly aware of a company’s ‘way of doing things’ and tend to spot counter-cultural behaviour very quickly. Despite all the talk of employee empowerment and self-managed teams over the past two decades, most organisations are still run using modern variations on the command and control model advocated by F.W. Taylor over a century ago. There are very few organisations where a manager will give his workers an objective but have no interest in how they go about achieving it. Almost all bosses know how their people do their jobs even if they don’t monitor all the specific details. This is especially the case in more demanding environments where managers are under pressure from senior executives. Fearing that they won’t meet their own deadlines, they tend to monitor the progress of their teams very closely and keep a keen eye on the costs.

In truth, then, there is no such thing as a rogue operator. If an employee uses unethical tactics to further an employer’s objectives, the behaviour is almost certainly sanctioned, either explicitly or tacitly, by the management and encouraged by the organisation’s culture. Workers don’t suddenly decide to break the law or take crazy risks with other people’s money. They do it because everyone else is doing it and they are rewarded for it. When they get away with it, they are praised for their performance. It’s only when it goes wrong that they are cast out and treated as pariahs by the very people who encouraged the behaviour in the first place.

The News of the World’s management would have us believe that, in a highly results-focused and hierarchical environment, managers would run stories and sign off expenses without asking how reporters got their information or what the expenses were for. If that is really what happened, the News of the World would be like no other organisation I have ever seen.

As with the banks’ responses to their rogue traders, the News of the World is attempting to individualise what is, in all likelihood, a systemic problem. Employees rarely deviate very far from the behavioural norms that prevail in their organisations. If one person in an organisation is behaving unethically, the chances are that a lot of other people are doing something similar.

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6 Responses to There is no such thing as a rogue operator

  1. Pingback: There is no such thing as a rogue operator - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. Dipper says:

    I disagree with the comments as applied to banking. Rogue traders are pursuing their own enrichment, not that of the company, and are effectively robbing from their colleagues, so there is generally a culture of reporting any such incidents. The only incidents that happened in banks in which I was working were done by individuals, usually hiding accidental losses, and were reported by colleagues who spotted something odd.

  3. Rick says:

    Dipper – very few of the high profile rogue traders have made any money from their exploits. OK, they might have done what they did to get bigger bonuses but they were still working primarily on their banks’ behalf.

  4. Dipper says:

    Rick – in many cases they were trying to avoid getting fired.

    The book “All That Glitters” by John Gapper and Nicholas Denton is an excellent source of information on banking behaviour. It covers Barings Securities from inception to disaster, and deals very well with how the culture in Barings enabled Leeson to take the positions he did.

  5. Vince Lammas says:

    I agree very few people operate for long as “rogues” in large organisations. Strong leaders (formal and informal) create and nurture culture which guides the actions of those working beneath them. Behaviour and actions they condone flourish while those they frown upon are typically challenged and rooted-out.

    You don’t need to look too far beyond whatever political motivations might exist in the case of phone hacking, to find relevant evidence. The Information Commissioner’s report on Press Standards in 2006 said (page 114) –

    “[new evidence emerging] … highlighted the fact that a culture undoubtedly did exist in the newsroom of News of the World and other newspapers at the time which at best turned a blind eye to illegal activities such as phone-hacking and blagging and at worst actively condoned it.”

    and there was, in management’s later behaviour –

    “… an unwillingness to provide the detailed information that we sought, claims of ignorance or lack of recall, and deliberate obfuscation …. which reinforces the
    widely held impression … that News International in particular has sought to conceal the truth about what really occurred.”

    It can be very hard to investigate and understand such systemic failings before taking positive action to address them. It’s inconvenient and extremely uncomfortable (somethimes very costly) to admit such endemic failings when problems arise. The damage to both corporate and personal rebutation is deep and long-lasting.

    I can understand the temptation (while not condoning attempts) to explain away issues by finding “special circumstances” “one-off coincidences” or “rogue operators” to exonerate people and whole organisations.

    There are clear parallels with the banking sector’s rogure traders – Barings’ culture evidently ignored standard systems of control which allowed Leeson to run up the large risk positions which led to the collapse of the organisation when the market turned sour.

  6. vince lammas says:

    Highly damning evidence and comment on Despatches Channel 4 tonight on the phone hacking scandal. More strong evidence this was not a case of an “isolated rogue”.

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