Are you too negative to take risks?

"Let's make a dent in the universe." — Steve Jobs

Dan Ariely blogged this week about how we judge the decision makers in our society, with his general thesis being that we are too harsh on decision makers that have to make choices based upon an increasingly 'noisy' environment.

A great deal of research in recent years has focused on how firms balance risk in their decision-making processes and pursuit of profit.  Research published this summer in the British Journal of Management investigates whether the personalities of CEOs at banks affected the level of financial risk their companies took on.

The research found that personality type did have an impact on risk taking, with anxious personalities less likely to take on risk.  Interestingly education also played a part, with the more qualified CEOs taking a riskier approach to business.  Interestingly I wrote about research earlier in the year suggesting that many executives have psychopathic tendencies, including a cavalier attitude to risk.

What they studied

Anyway.  Their study was based on a survey sent out to managing directors at over 110 Spanish banks, with the executives averaging around 25 years in industry, with a decade at the top.  The survey aimed to measure personalities on a scale that divided emotions between positive and negative traits.

Personality tests are a common part of the recruitment process now and research such as this suggests that they should play a significant part in choosing your next chief executive.

It is also useful for managers themselves to have an increased level of self-awareness and how their personality can influence the choices they make.