Everyone Lies and It’s Costing You Money

The Volkswagen scandal that cost CEO Martin Winterkornhis job and sent the company’s stock price plummeting is further evidence that EVERYBODY LIES.

Customers and clients, sub-contractors and vendors, employees, the talking head on the TV. All of them lie. In fact, each of us hears as many as 200 lies a day (depending on how much TV we watch).

People lie more frequently over the phone or in emails than face to face. Some people have “tells” – sub-conscious movements that indicate a lie.

Applicants lie on resumes (or embellish the truth, anyway), online retailers pay writers to create glowing testimonials from “satisfied” customers, TV ads lie about products, exaggerating their value, and within a 10-minute conversation, six out of 10 people will tell at least one lie – even to a complete stranger!

Most of these lies are harmless conventions. It’s not good form to tell your manager that his tie makes you dizzy when you look at it. Say nothing at all, or “great tie,” but you’ll probably see it again if you do. Say nothing. That’s better.

Sure, most lies are simple social conventions – things we say to make others feel better, and to better fit within the group’s culture, whether it’s the workplace, a social club, or even a family. White lies make lives better. No one gets hurt. No harm.

Then there are the lies that can bring down a business. Small business is most vulnerable because they don’t have a very big safety net. Even global enterprises get caught in lies. A global manufacturing giant ‘adjusted’ test reports to hide serious defects – defects that cost lives. And what about those glowing annual reports? The company’s in the tank but the annual report makes everything sound rosy. Lies of omission – failing to tell the whole truth even when you know it – is still a lie. Not telling a manager that numbers will fall short for the quarter is a lie of omission – and one that can bring down one-man bands and world-wide brands.

As a business leader, you need the plain, unvarnished truth – even if it’s painful. Otherwise, how can you react appropriately?

You need to create a corporate culture that values honest communication, with no lies of omission. That’s right, the whole story – good, bad, or horrific.

Start by building in cross-checks. Two people must sign all business payments. Accounting cross-checks the numbers submitted by the sales department, you cross check the work of all project managers.

No business operations should exist in a vacuum, controlled by a single employee, or even by the company owner.

Create a corporate culture of the “safe-flop” to get the truth even when “it” falls flat. Don’t penalise failure. Correct it, learn lessons from it, mitigate it as it occurs so it doesn’t re-occur.

Look for signs of fraud. Fraud is often the underlying cause of on-the-job lies. Have an independent auditor review company financials. Set up alerts at your bank to notify you of anything suspicious.

Shrinkage – missing inventory – is almost always concealed with elaborate lies. Paper companies who place orders, then disappear? When things don’t add up, check the math, and check the operating system. Something isn’t right. Go with your instincts.

Learn to spot a liar. He won’t look you in the eyes. She fidgets in her chair. He’s a little too cordial. She lacks animation, fearing she’ll be caught in a lie.

Body language speaks volumes. Liars tend to back away from you as they unfold their tales. However, these are not sure-fire signs of a lie. Body language may tell you something, but you may not know what.

Make sure – really sure – you can prove a lie. About the worst thing you can do is accuse an employee or other valued business associate of lying, only to discover you’re wrong. You jumped to conclusions. You’ve lost goodwill, and you may be facing a defamation lawsuit. Definitely not good for business.

Gather the facts, create checks and balances, confirm suspicions without question, and discuss the situation with the suspected liar quietly and in private. If you’re wrong, apologise, and fix the operational system that led you to conclude this employee was lying.

You can’t stop lies. It’s part of the socialising process. However, you can expect lies – up to 200 day – so learning to find that nugget of truth under that pile of lies is a good skill to have.

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