management blog

I’m a bit late on to this but last week Jerome Kerviel, the “rogue trader” who is accused of losing French bank Societe Generale €5bn, was interviewed on French television.

The video on France 2′s Objet du Scandale is revealing partly because of all the talk at the G20 and, in the UK at the Labour party conference, of the need to curb bankers’ bonuses or at least restructure how they are paid out. Kerviel’s broader point is that there isn’t any point; whatever rules are created, clever people will find a way round them.

But I thought his other comment on the nature of his former job as a trader pointed to a wider issue that doesn’t seem to be attracting quite as much discussion. “It’s a job that makes you a bit crazy, an addict. They push you to take risks,” he said, referring to the culture of his former workplace.

Kerviel touches on one of the paradoxes of business in a post-credit crunch world. On the one hand, excessive risk taking in the financial industries has been identified as one of the major causes in the recent economic turmoil. At the same time, however, every business does encourage the taking of risks – it lies at the heart of what it means to be innovative when we try and think of new ways to create products and ways of doing business.

Getting that balance right is always difficult, particularly in a big organisation. The question I have is given that business constantly tries to challenge convention, is it possible to ensure completely that the balance is maintained? Or is excess inevitable when you push people to push the boundaries?

One thing is certain: corporate cultures need to change, including how staff are motivated and how they are incorporated into an organisation. Community is a meme that I have written about a few times on the blog and I can’t help wondering if that notion could be part of that discussion.