The Scandal of Brain Strain

Stress is ubiquitous in financial services. The burnouts of Hector Sants at Barclays or Lloyds CEO António Horta-Osório are high profile examples of the pressures of working in demanding banking jobs. But aside from the deleterious effect on your health and well-being, there’s another consequence of endemic stress in financial services – it fuels scandals.

The financial services industry is not filled with bad apples looking to flaunt the rules, but with professionals who by and large try to do the right thing and are prone to mistakes with unintended consequences. The cumulative affect of minor indiscretions is probably more likely to explain the huge uptick in banking misconduct than the London Whales and Jerome Kerviels of this world.

Financial services is a high reward, high-pressure sector. But working under constant stress impacts your mental capabilities and ability to make decisions. If you work all hours, you never get much parasympathetic activation – when the body recoups energy and metabolically rebalances, and your brain integrates and organises its experiences. I’ve met seemingly super-fit City workers who never properly rest, and their health is not as great as they think.

Allostatic load, or the wear and tear on your body, accumulates when people are exposed to repeated or chronic mental and physical stress. Working 14-16 hours a day in a City job might not be physical work, but it pleases huge stress on your biological system with no chance for recuperation.

I believe that scandal in the financial sector and the stress of the work are natural bedfellows. Bombarding financial institutions with regulation is one thing, but the firms also need to think of the well-being of their employees to prevent further blow-ups. A company is really simply a collection of relationships, as the term implies, but City firms forget this all too quickly. To deal with root causes of behaviour that can lead to danger, there are four ways to tackle conduct and culture.

Foster positive relationships:

Without good relationships in place at work, humans decline very quickly. Our bodies and brains become hyper-defensive and vigilant, and waste precious energy as heart and nervous systems stay in arousal for longer than they should. The resultant energy drain decreases our ability to question our own or others’ assumptions, biases or decisions.

There needs to be an environment that fosters trust, where anyone can question the status quo and where leaders encourage collaboration rather than leading in an autocratic way. Most financial services organisations are still a long way off.

Understand how things really get done:

Don’t look at the org charts – this is not how modern financial services organisations really work. Firms need to look at the informal networks and relationships that lead to the work actually getting done, how quickly the messages pass from management to the wider team, and where the real silos are as well as who the influencers are and where the bottlenecks hit. We use AI-driven technology to analyse complex organisational networks in highly visual and informative ways.

Many ethical problems, notwithstanding the headline grabbers, are borne of someone being afraid to rock the boat, being too tired to question the way things run or not being able to see a chain of outcomes. To change things, an X-ray of the real networks to establish the real influencers who can help you is a good place to start.

Getting the right architecture in place:

You can’t intensively farm trust. HR might be kept busy, but if it’s not focused on creating better conditions for trust, good relationships and cultures by knowing how humans connect or disconnect, it’s not doing much good at all. Engagement surveys are one thing, breaking down hierarchies and creating true coaching cultures is quite another.

Teaching line managers how to run meetings in ways that draw out the best thinking, giving people autonomy, and eliminating edifices that engender committee rule are where it’s worth taking some risk. Yes, keep risk frameworks systemised but don’t think systemising people in the same way will yield the collaboration you desire.

Physical and emotional wellbeing:

There are a lot of misconceptions about physical health. My work as an executive coach tries to go a bit deeper than the obvious stuff people are aware of. There’s some cool medical grade technology out there now that helps us understand the biological cost of our working day and generate useful insights on rest, sleep, nutrition and exercise. But insights into emotional and mental health is where it gets interesting.

What I look at is regulating, not ignoring or suppressing, emotions. What does that look like? Well, think of any stressor you might encounter in your life: a client deadline, unreasonable or sabotaging behaviour in a meeting, someone taking credit for your work, a “go get it” culture producing commission fights – the list is endless and they all produce emotional and physiological responses.

Your default response to this is a negative emotion, which over time can be hazardous to your health. You can, however, regulate this. Part of this is practising getting into ‘coherent states’ – think clinical breathing supported by technology. It’s a more scientific and measurable form of mindfulness. A state of biological coherence allows more blood glucose and other essential “brain foods” to be directed towards your frontal lobes, the part of the brain associated with decision-making and impulse control.

At the merest whiff of stress in usual situations, energy is diverted towards the more primal areas of the brain, which keep us safe. The trick, through guided techniques, is to try and control this. Learning to discern emotions, labelling them and the impulse to act, and then critically think through how well it will serve you at that moment are all key. It’s difficult to think yourself into something more positive if the brain is tired, so by giving it an energy boost by resetting our heart and nervous system, it is possible with practice to change mental states quite easily and quickly.

So what’s in it for you? Apart from the health benefits, learning core skills of coherence and emotional regulation does a lot to recover energy and make you feel like you’re on your A-game more of the time. Increased energy means the brain can resist bias and impulses, so your thinking and decision making is better. Many issues didn’t start from intentional dishonesty, but usually from tired, stressed people making important decisions the wrong side of 7pm.