Tag Archives: risk-taking

Genes and Neurotransmitters Influence Investment Risk-Taking: Implications for Taking Career Risks?

Camelia Kuhnen

Camelia Kuhnen

Brian Knutson

Brian Knutson

Camelia Kuhnen, then of Stanford with her Stanford colleague Brian Knutson and Vanderbilt’s Gregory Samanez-Larkin posit a small but meaningful genetic basis to risk-averse financial investing, providing a biological basis for findings that women hedge fund managers outperformed male counterparts.

Volunteers with two short serotonin transporter genes (5-HTTLPR) reported that they tend to worry, and this pattern was associated with chosing less risky investment choices.

Gregory Samanez-Larkin

Gregory Samanez-Larkin

“Short allele carriers” also showed higher levels of the personality trait “neuroticism,” but no significant difference in cognitive skills, education, or financial status.
Kuhnen estimates that less than 30 percent of variance in risk-taking is attributable to short 5-HTTLPR, and the remaining difference is derived from experience, culture, education, and social environment.

Kuhnen and Knutson reported the neural basis of financial risk taking using event-related fMRI.
They observed that the nucleus accumbens was activated before volunteers made risky choices and made risk-seeking mistakes.
In contrast, they found that the anterior insula was activated before risk-free choices and risk-aversion mistakes.

They proposed that different neural circuits are associated with differing emotions as volunteers anticipate gain or loss associated with financial choices.
This emotional activation “signature” can lead to specific investment choices, favoring or avoiding risk, and may lead to investing mistakes.

In unpublished research, Kuhnen found that short-allele carriers showed increased anxiety before making a decision in a trial-and-error risk discovery task, but reacted no differently than long-allele carriers when they observed a negative outcome.

She noted that volunteers differ in how they anticipate and react to a potential decision before they make it rather that in their reactions to actual outcomes of investment decisions.

Joan Chiao

Joan Chiao

Kuhnen, now at Northwestern collaborated with Northwestern colleague Joan Chiao to investigate the impact of both the 5-HTTLPR gene and the DRD4, gene, which regulates dopamine transmission.
These genes and their related neurotransmitters have been linked to emotional behavior, anxiety and addiction.

Their research replicated Kuhnen’s earlier finding that individuals with two short 5-HTTLPR alleles take 28% less risk than people with other combinations, and they demonstrated that the double DRD4 7 allele carriers took 25% more risk than people with other combinations.
They conclude that serotonin is associated with risk-averse investment choices, whereas dopamine is associated with riskier choices.

Kuhnen and Chiao argue that risky investment behavior shares commonalities with other risky behaviors like drug use, gambling, unsafe sex, dangerous physical and social pursuits, and more.

-*How do you determine the right amount of risk to undertake in career development and financial investing?

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Women’s Career Development Model – Individual Action in Negotiation, Networking-Mentoring-Sponsorship, Skillful Self-Promotion – Part 2 of 2

Kenexa Career Development Model-Individual Behaviors

Kenexa Career Development Model-Individual Behaviors

Part 1 of this post, Women’s Career Development Model – Individual Action in Career Planning and the Contest and Sponsorship Pathways to Advancement – Part 1 of 2,  highlighted Ines Wichart’s model of women’s career development with three levels and 11 components, based on her research as Kenexa High Performance Institute (KHPI), a subsidiary of IBM.

Ines Wichert

Ines Wichert

She outlined four behaviors that individuals can control or influence toward career advancement:

  • Career planning 
  • Opportunity-seeking, Negotiation
  • Career-building networking; Mentoring-Sponsorship    
  • Skillful self-promotion

The first segment of this two-part post considered facets of Career Planning and two independent paths to career advancement: Contest and Sponsorship routes.

Let’s consider the additional elements that respond to individual attention and efforts, including Opportunity-seeking while embracing risk.  

Susan Vinnicombe

Susan Vinnicombe

Val Singh

Val Singh

Highly effective career advancement opportunities include stretch assignments and on-the-job training.

Susan Vinnicombe and Val Singh of Cranfield University report that these development activities are most effective in building credibility, visibility, reputation as a capable, well-rounded leader.

However, their research found that women need more encouragement to take on challenging assignments than men, who are more likely to ask for these assignments.

Linda Babcock

Linda Babcock

Similarly, Linda Babcock reported that women tend to need encouragement to ask for promotions and salary increases.

Her research demonstrated that women are less likely to negotiate for their first salaries, unless they know that these are acceptable practices.

Manhattan CollegeAs a countermeasure, Babcock recommends negotiation practices demonstrated to mitigate negative perceptions by both men and women negotiation partners

Like Babcock, Mary Wade’s research at Manhattan College found that both men and women evaluated more negatively women who negotiated for salary using the same script as men.

Corinne Moss-Racusin

Corinne Moss-Racusin

Laurie Rudman

Laurie Rudman

Corinne Moss-Racusin and Laurie Rudman replicated this disconcerting finding at Rutgers University, leading to their formulation of “The Backlash Avoidance Model” (BAM)”.

According to this construct, women may demonstrate traditional gender role behaviors to mitigate “backlash” of negative reaction by men and women to “role discrepant” behaviors like asking for career advancement and commensurate compensation.

  • What approaches have been effective when you have asked for a salary increase or promotion?
         -How did you prepare?

         -How did you overcome objections?
  • When people ask you for a salary increase or promotion, what negotiation approaches have been most effective?
              -What have been least effective?

Wichart’s model of individual initiatives toward career advancement points to the importance of skillful professional networking, mentoring, and sponsorship.

National Center for Women and Information TechnologyNational Center for Women & Information Technology (NCWIT) reported that nearly half of technical women surveyed said they lack role models and mentors, and 84% said they lack sponsors.
The result is that these women are four times more likely to leave the current job role.

One reason that women’s professional networking efforts and seeking mentors may yield less effective career advancement than men:  Women tend to engage in professional networking for affiliation and emotional support with people close to their job level whereas men tend to network for career development with people significantly above the job level, according to Adelina Broadbridge of University of Stirling.University of Stirling

As a result of these differing approaches to professional networking, men may enjoy more rapid career advancement due to visibility and sponsorship.

Pamela Perrewe

Pamela Perrewe

F. Randy Blass

F. Randy Blass

In addition, women are likely to demonstrate less political understanding and insight because mentors are not sufficiently senior, according to Florida State University’s F. Randy Blass, Pamela Perrewe, and Gerald Ferris with Robyn Brouer of SUNY Buffalo.

Gerald Ferris

Gerald Ferris

Robyn Brouer

Robyn Brouer

Organizational support for formal and informal mentoring has been shown to increase employee engagement, satisfaction, and retention.

Therefore, organizations concerned with retaining talented women and minorities can increase the likelihood of keeping skilled employees by initiating structured mentoring programs and encouraging selective sponsorship.

  •  How have mentors and sponsors enabled your career moves?
  •  How do you decide who you are willing to mentor or sponsor?   

Previous posts have shared much current research and leading recommendations in building personal brand and practicing skillful self-promotion:

In light of the potential negative perceptions of women who showcase their accomplishments as they ask for salary increases and role advancement:

  •   How do you raise awareness of your accomplishments’ impact to avoid “backlash”?
  •   How do you define, develop, and communicate, “skillfully promote” your personal brand?

These research findings suggest three parting suggestions for women who want to Play Bigger:

  1. Question the thought that “I’m not ready yet.”
  2. Develop resilience and “a thick skin”:   If you are doing something innovative or important, you may draw both praise and criticism when you are noticed.
  3. Filter advice:  Implement recommendations that have “the ring of truth” and “resonate”;
    leave the rest.
  • What is the most helpful career advice you implemented?
  • What career advice have you decided not to implement?

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©Kathryn Welds

Why Organizations Care about Employee “Happiness”

“Command-and-control” managers of the past might have scoffed at current business research on happiness.
Under their spans-of-control, employees ought to have been happy to have a job from which they derived an income.
This view has been supplanted by widespread recognition that desirable outcomes like innovative problem solving, flexible decision making, and workplace productivity are associated with employees’ positive mood.

GallupResearch by the Gallup Organization offers further justification in its finding that disgruntled employees disengage and cost the American economy up to $350 billion a year in lost productivity.

Therefore, organizations can increase financial performance by improving operational efficiency in the many processes involving people.

Sigal Barsade

Sigal Barsade

Sigal Barsade of the Wharton School of Business contributed to the investigation of happiness’s impact on organizational productivity.
She found that positive moods prompt “more flexible decision-making, wider search behavior and greater analytic precision,” which enable the organization to take considered risks.

Jennifer Aaker

Jennifer Aaker

On the other coast, Jennifer Aaker, award-winning professor at Stanford Graduate School of Business, links workplace happiness and a sense of meaning.

She asserts that having a meaningful impact on the world is a strong predictor of happiness and that it’s possible to cultivate mindfulness and awareness of meaning in work and personal activities.
This cultivated awareness, she said, influences people’s subjective well-being and may positively affect that of others in a contagion effect.

Jonathan Haidt

Jonathan Haidt

New York University’s Jonathan Haidt, a psychologist in the Stern School of Business, takes a more philosophical view of happiness.
He redefines “wisdom” – other might say “leadership” or “self-management” – as the ability to adapt, shape the environment, and know when to move to new environments.

His moral and ethical framework includes high-level philosophical “virtues” associated with a sense of well-being and shared across cultures:

  • Courage
  • Humanity
  • Justice
  • Temperance
  • Transcendence

The Happiness HypothesisHaidt’s book, The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom , specified contributors to well-being:

  • Strong marriages
  • Physical touch
  • Meaningful relationships
  • Religious affiliation
  • Autonomy
  • Meaningful engagement in work
  • Contributing to a community through voluntary effort

Engineering organizations analyze issues according to “Is-Is Not.
Using this approach, Jonathan Haidt’s research offered some surprising happiness detractors or “is-nots”:

  • Persistent noise
  • Long commutes
  • Lack of situational and person control
  • Shame
  • Dysfunctional relationships
Matthias Mehl

Matthias Mehl

Matthias Mehl of the University of Arizona offered an additional contributor to happiness: Interpersonal dialog.
He found that volunteers who engaged in a meaningful conversation create shared meaning, strengthened their connections, and reported feeling happy.

Jennifer Michael Hecht

Jennifer Michael Hecht

Jennifer Michael Hecht’s The Happiness Myth, offers a framework for types and levels of happiness:

  • Good day, awareness, savoring, and gratitude for the fortunate conditions of one’s life
  • Good life, engaging in meaningful and challenging tasks that help provide a material quality of life and doing one’s best in any endeavor
  • Peak, choosing experiences that inspire awe and a sense of the eternal, connect to families and communities.

The Happiness MythShe cites familiar recommendations to:

  • Cultivate self-knowledge
  • Develop a clear view of one’s worth
  • Moderate desires
  • Appreciate mortality and time limits
  • Try new things
  • Increase involvement with others and the community.

Organizational policies can contribute to employees’ sense of well-being through establishing:

  • Opportunities for career movement and development
  • Regular acknowledgement and praise for a job well done
  • Focus on well-being as individuals through health and work/life integration programs

The payoffs to organizations include increased productivity, innovation and engagement.

-*How have you seen efforts to increase organizational “happiness” result in improved employee engagement, productivity, or decision-making?

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©Kathryn Welds