“No, a CEO should never lie,” he said. “That’s taking it too far. Look at Enron,” the famous manager said.

I set my drink down and looked over. “Nice, but unfortunately business has gotten to the point that natural selection favors the deceitful.”

“And you help.”

“I think I resent that. You make it sound like I push for deceit for deceit’s sake. That’s not true.”

“Sure you do. I’ve probably read every column you’ve written for 5 years. Most of them center around some creative form of deception in the ‘corporate battlefield’ as you unflaggingly put it.”

“And that’s wrong? How can that be wrong? Don’t shareholders have a right to expect their CEOs and managers to do what they have to to create sustainable increases in shareholder value?”

 “Of course. But I don’t believe that has to include institutionalized lying,” he said, then paused to sip his scotch.

I leaned back into my seat. This wasn’t going well. I looked over, “Ok, what about a ‘noble lie’? A lie told as a substitute for violence and to prevent harm. Would you lie to a mugger to protect your son from a beating? Is that lie ok?”

“Of course, because you’ve done a good thing and there are no social consequences,” he answered confidently.

“Well, in a strict sense, yes there are. Just ask the beater—you efficiently modified his ability to make an accurate decision by lying to him. Therein lays the power of deceit. It alters reality so different decisions are made. So don’t tell me you haven’t damaged social trust because you have. But in those circumstances it’s ok. Right?”

 I glanced into his hooded eyes as he watched and listened. It was one of those moments when you realize most people in a conversation just wait for you to stop making noise so they can say something. That wasn’t the case here. I was confident in what I was saying but the intensity of his listening was both welcome and yet unnerving. Plus, there seemed to be something else going on.

 I continued, “Well, then. So it’s ok to lie as long as you’re defending something from harm. You’ve used a lie to coerce so it’s no different than a club; they’re both weapons. And weapons make people do things they don’t want to do.”

 There was a long pause.

 He finally said, “You’re going to sit there and seriously tell me it’s ok for a corporate officer to lie? You preach about the sustainability of profits but you can’t reliably sustain profits that are based on lies because lies themselves are unsustainable. ”

 "No, I’m saying it depends. Lying isn’t just a tool for managers that lack the skill to come up with a truthful alternative. But there are times when deception should be given technical consideration just as you would any potentially useful tool.” 

 “Such as?”

“How about lying in war?” I asked.

 “That’s different. That isn’t the world most people live in. In war things are different.”

 “How about corporate war?”

 “Oh, here we go,” he said flatly.

“That’s right. Here we go,” I said, getting a little hot, wary of jumping on my usual soapbox. “Does your competition lie about you, even in small ways, to get your customers?”

“Of course.”

 "And taking your customers hurts you?”

 “Typically, of course.”

 "Ok, let’s see,” I said sharply. “Your competition deploys deceit as a tool to hurt you. That’s a pretty good definition of an enemy. And enemies, in my galaxy anyway, lose the right to be treated fairly.”

“So in this sacred galaxy of yours you get to treat ‘bad people’ badly?”

“I get to treat them as they treat me. I was raised on the Golden Rule and experience has taught me it’s a pretty good one.”

 “So once you have somehow divined someone is an enemy, then your moral compass loosens up a bit. Your acceptable tool-set becomes a bit ‘broader’”.

“Exactly,” I said hoping we were done.

He sat there for almost a minute before he spoke. “Your playbook has always intrigued me. On the surface it appears rational, then when you look closer it gets a bit twisted. Then it begins to make sense again. Unfortunately I’m not sure that’s where it ends.”

 I couldn’t tell if he was giving me a compliment. Probably not.

 He went on, “As you see it, in times of competitor induced corporate war wouldn’t a good CEO, a good corporate general, endeavor to make the competition, the enemy, seem even worse than they actually are in order to justify treating them even worse? By your rules, even though that is escalated deceit, that would be characteristic of a better CEO than one that wouldn’t do it. Right?”

It took a few seconds to get my arms around this. “Yes, because short wars are better than long ones. That’s a Sun Tzuism that’s pretty hard to argue with. Once you’ve been pulled into the ring, hit harder and end it quickly. That’s your job.” 

“But Tal, what about if a competitor hasn’t shown themselves to be an enemy—they are playing by the rules. However, your CEO’s experience dictates that it’s just a ruse and they will become an enemy eventually. Your playbook seems to suggests it’s ok to treat them like they MAY behave?”

“You’re talking about preemptive behavior?” I asked.

He nodded.

I smiled, “No, I think that’s called prudent paranoia. In any case an entity has to behave in a way that is unambiguously hostile to be labeled an enemy. That said, it’s only intelligent to ‘hope for the best while planning for the worst’. Your shareholders expect that of you. And any good manager expects that from their crew. That’s just good management. It’s what they get paid to do.”

 “Ok, Tal, here’s my take. The fact is most corporate deceit goes on internally within the [org] chart. The challenge is that lying is so expedient. And everybody wants more of what they want. The real issues are the trailing effects. You can never tell one lie because more are needed to shore up the one you told.“

 “I know. My father once told me lies, like money, compound. Just not in a good way,” I said.

 “I have found that managers that always tell the truth move up quicker and get more done simply because the truth is free standing; the truth doesn’t require maintenance. Truthful managers simply have more time to think about improving themselves and the business. Unfortunately the rewards to a lie are immediate and obvious.”

I thought about this a moment. “Of course. That’s why people do it in the first place. People only lie for the reward. If there were no reward of some sort we wouldn’t do it. Simple economics. Too bad the rewards for honesty are, by comparison, so diffuse. And diffuse rewards are often invisible to very bottom-line oriented management.”

 “No surprise,” he said. “A solid bottom line is, after all, measured in dollars, not the philosophical warmth of having integrity. Sure, it counts, but it’s hard to quantify. Numbers are easy.”

“Exactly. And that’s a problem. It is, however, the way it is,” I said.

“Tal, the key for your so-called corporate warrior, the CEO slash general, is to incent honesty and thoroughness. He or she has to create a culture of creative, thorough thinking, where alternatives to deceit are rewarded. You can almost always find a truthful alternative. I learned a long time ago any rung on the org chart almost always emulates the rows above them. The youngsters copying the parents—so the parents have to be getting it right. Lazy workers lie, or at least they lie more and they have to be weeded out. And if an externally directed deception has to happen, really has to happen, and by that I mean there’s no truthful alternative, then do it well. I liked your bit on FUD [Fear, Uncertainty and Doubt], by the way. That was useful.”

 I thought about this a moment. “Wait a minute. Just a few minutes ago you were saying a manager should never lie.”

 He smiled. “I know. Sorry about that.”

 “You mean you, you, lied?”

 “Yes. But a ‘noble lie’,” he said relaxing into his chair. “I was protecting myself from a boring flight.”

 I reclined my seat and stared up at the ceiling. This wasn’t over.

Comments to:
Tal Newhart (e-mail)
Parcon Research

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