Lessons from the Lawbreakers

Can a chief executive learn anything from a contract killer? Louis Ferrante believes so. He served eight-and-a-half years in prison for crimes he committed as part of New York’s Gambino family, and is convinced that the Mafia offers useful lessons for entrepreneurs and even middle managers.

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His new book, "Mob Rules: What the Mafia Can Teach the Legitimate Businessman," is the latest in a burgeoning subgenre of management manuals from reformed criminals. In it, the motivational speaker offers his mobster management teachings in 88 pithy chapters, with titles such as: “Don’t end up in the trunk of a car: Avoiding office politics”; “It’s good to go to a funeral as long as it’s not yours: The power of networking”; and “How to hit your target without a gun: motivating your people.”

In one chapter, “Why a mobster makes his son pull the trigger: confidence building,” Mr Ferrante likens mobsters bringing their teenage sons along on a murder to a corporate “take your kid to work day,” although he draws on another anecdote to resonate with the less murderous among his readers. “When I was young, a wiseguy took me to my first sit-down [a meeting to settle disputes]. Although I had no authority to speak at the table, he asked my opinion afterward. Here I was, a cub among lions, and he wanted to know what I thought. For me, the confidence boost proved invaluable.”

For more conventional bosses, he suggests they should instead take junior employees along to a big meeting. “Ask their opinion afterward ... It’s how confidence is built.” Which seems, underwhelmingly, like common sense.

"Mob Rules" is the latest in an (ig)noble tradition of business books from former criminals: Ryan Blair’s "Nothing to Lose, Everything to Gain: How I Went from Gang Member to Multi­millionaire Entrepreneur" will be published in August. Two years ago, "I’ll Make You an Offer You Can’t Refuse: Insider Business Tips from a Former Mob Boss" by Michael Franzese, a former New York Mafia boss, whose life took a twist after falling in love with a woman—now his wife—who wanted him to go straight. He too believes the sit-down has much to teach the law-abiding executive, and includes a chapter subtitled “Negotiation mob-style.”

Frank Abagnale, whose memoir "Catch Me if You Can," which detailed his youth as a confidence man and forger, was made into a Hollywood film starring Leonardo DiCaprio and Tom Hanks, turned his knowledge into a consultancy specialising in forgery and embezzlement.

In 2008, 50 Cent (aka Curtis Jackson) the former drug dealer who survived being shot nine times at close range, and has since become a globally successful rapper, published "The 50th Law," written with pop psychologist Robert Greene. The rapper recommends basic strategies used by hustlers on the street—keep moving, hone your instincts, be fearless.

Drawing Parellels Between Crime and Business

In a telephone interview, the rapid-speaking Ferrante is evangelical about his mob-management tips. In particular, on the need to forge a sense of community or, as gangster folklore usually describes it, “family.”

“We’d play cards together, go on holiday, socialise,” something Ferrante thinks should be replicated in legitimate businesses. However, he acknowledges that the strength of the Mafia’s bonds were in part due to the fact that they operated outside the law. “We were a sub-society, which tied us together,” Ferrante said.

Ferrante said he has no desire to “glamorize the lifestyle—it’s a very ugly life.” He also conceded that the Mafia’s strong code of ethics “was twisted,” although he insisted many legitimate businesses are just as cunning as his former peers.

Drawing parallels between crime and business is not simply the preserve of former criminals looking for a publishing deal. The British economist John Maynard Keynes described Ivar Kreuger, the Swedish businessman who smooth-talked Wall Street and Europe in the 1920s before his empire collapsed amid allegations of fraud, as “perhaps the greatest constructive business intelligence of his age.” Two years ago, when mobster Don Alphonse “Allie Boy” Persico was sentenced for murder, Judge Joanna Seybert said, “His intelligence and personality might have served him well in legitimate business.”

Martin Gill, professor of criminology at the University of Leicester, compared robbers of cash-in-transit vans to legitimate entrepreneurs in the International Journal of the Sociology of Law in 2001. He found both were rational actors that needed to conduct an intuitive cost-benefit analysis, where they were weighing the benefits and disadvantages of each venture because the costs for getting it wrong could be high. Put another way, both needed to consider risks and manage them to their advantage and both needed to be good risk-takers.

According to Petter Gottschalk, professor of knowledge management and information systems at the Norwegian School of Management, innovation, learning and risk are key traits of both criminals and entrepreneurs. “Risk management is an important activity in criminal entrepreneurship, as the threat from law enforcement as well as competing criminals has to be taken into account before committing crimes,” he said.

Does pointing out the similarities between entrepreneurs and criminals serve any practical purpose? Yes, said Gottschalk. “To fight organised crime, there is a need to understand criminal organizations in terms of criminal business enterprise,” he said. Gottschalk believes the tools used by business and management researchers could be sharpened to help fight organised crime by recognising entrepreneurship and career progression in gangs. It might also help rehabilitation.

One group where Gottschalk is downbeat on the prospects of rehabilitation, however, is white-collar criminals. There are, he said, programs to help reform every type of criminal except for white-collar ones. In his work interviewing jailed Hells Angels and former mobsters, Gottschalk has found the most recalcitrant are corporate criminals. “They don’t feel they’ve done anything wrong—they believe society has wronged them. When they get out of prison, many of them spend the rest of their lives in appeal courts.”

One surprise omission may be Bernard Madoff, who acknowledged the similarities in the psychology of white-collar criminals and killers in a recent interview with the Financial Times from prison, where he is serving a maximum sentence of 150 years for masterminding a fraud that robbed investors of $65 billion. “There are these Mafia people who can kill people all day long, do terrible things, and then go home to their families ... But you can compartmentalise things in your life,” he said.

Louis Ferrante’s Tips for Making Crime Pay

? Never bad-mouth your boss. It has a way of getting back to them. In the business world, nothing less than corporate survival is at stake.

? Let Al Capone be a warning. Only taxmen will hunt you down with more persistence than the mob. The bigger you get, the more careful you need to be. Pay your dues.

? Control your ambition. Running a Mafia family or a business is like driving: You have got to know when to hit the gas and when to brake.

? Contingency planning. No one anticipates problems better than the Mob. Make sure you plan for every disaster.