Storytelling In The News: #125

Spin and truth-telling in business: the costs of lying

April 20, 2004

This morning, the business news is full of stories about truth-telling or rather the consequences of failing to tell the truth.

* An ex-Air Force official, Darleen Druyun, pleaded guilty to discussing a job with Boeing weeks before removing herself from talks over a defense contract sought by the company.

* Shell released on Monday documents of conversations between Philip Watts, Shell's then-chairman and Mr. van de Vijver chief of exploration and production that shed light on the overstatement of reserves. On November. 9, 2003, van de Vijver wrote Watts: "I am becoming sick and tired about lying about the extent of our reserves issues and the downward revisions that need to be done because of far too aggressive/optimistic bookings," Mr. van de Vijver wrote to his boss, Sir Philip, according to an excerpt of an e-mail released by the company." Now the company is under civil and criminal investigation for mis-statements.

* USA Today's top editor Karen Jurgensen abruptly stepped down, as the nation's largest-selling newspaper approaches the conclusion of an investigation into how one of its star reporters was able to fabricate stories and plagiarize from other news organizations.

* Action Performance is under attack for not disclosing that its chief financial officer and treasurer, R. David Martin Jr., just a month before he was hired in August 2000, reached an agreement with Arizona's attorney general settling civil charges brought by the state's Board of Accountancy alleging that Mr. Martin committed "unprofessional conduct" at Deloitte.

And so the dismal record continues.

It is timely therefore Jared Sandberg has a column in the Wall Street Journal about the tendency of bosses to "sugarcoat their worst news" and the consequences in lost trust. Sandberg gives some telling examples:

* Whenever an employee in an unnamed company heard her boss begin a meeting with the words, "Today is a good day for change," she knew something bad was afoot. He would briefly disclose news that they had lost a client, had to have layoffs, or had to fire someone, then follow it with a lengthy soliloquy about just how good this bad news was. After all, the loss of that revenue stream meant more time for the company's current clients, he reasoned. It meant that now the company could woo the former client's competitors, and finally devote resources to getting new clients (which is even better than actually having them). To new employees: "It was comforting to some people who didn't know any better," she said. The veterans, however, "got back to their offices and huddled," marveling at the disparity between reality and message.

Failed spin at Motorola

* After Motorola shut its satellite communications division in 2001, employees were in danger of losing their jobs. Nobly, the company tried to move them to a new earth-based initiative and held a big shindig in a Phoenix convention center. Part of the entertainment included senior executives dressed up as skydivers while a video showed real skydivers plunging as earthward as Motorola's dashed satellite hopes. "I thought, 'this is the most ridiculous thing I've ever seen,' " said one former engineer.

Sandberg comments: "These spin measures might be well-intentioned efforts to preserve the fragile filament of workplace morale, but bosses often torch them. Resistant to admitting a mistake or leveling with employees, executives endlessly find themselves putting lipstick on pigs."

In an environment where trust in leadership has never been so wobbly, it doesn't take something very dramatic to injure it. Staffers have "incredibly well-preserved memories of a decades-old lie," says Linda Dulye, founder of a firm that specializes in workplace communications. So, the restoration of trust can take forever.

The instruments of corporate spin are tattered euphemisms

* Very common is "rightsizing" or "merger of equals."

* Fired executives get to leave "to pursue other interests."

* But laid-off staffers are trimmed "fat" or cut "deadwood."

* Similarly, "cost efficiencies" means, according to Meredith Roth, "your job just went to Bangalore."

Ms. Roth's own brush with dot-comedy included an executive who laid people off but insisted that, despite the company's obvious problems, "this is not a situation where the emperor has no clothes."

Her rule: "Anybody who pulls out the emperor's analogy is surely naked," she says.

Bottom line

When managers are in the habit of using spin and euphemism to mask a more difficult reality, it's not surprising that these practices eventually slide into illegality, with the culprits appearing in criminal court to answer for their deeds. Business leaders would do well to remember their mother's advice: do not tell a lie. It's not a good idea.

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