The Big Problem With a Little Lie
If
the truth seems to be more pliable today, that may be function of current
politics and current leadership. But in business, and in your career, you need
to play the long game--and stick to a higher standard.
Executive director, Ed Kaplan Family Institute for Innovation
and Tech Entrepreneurship, Illinois Institute of Technology
SEC
Rule 10b-5 has always been one of my favorite regulatory convolutions because
it painstakingly purports to prescribe punishment for both (a) untrue statements
of material facts, which seems pretty clear, requires some fairly obvious and
unlawful intent, and can be succinctly described in a few words. Then the
code valiantly takes on the much muddier matter of (b) fraudulent
sins of omission of material facts, which requires a small treatise of
definition, a number of mixed negatives, and creates anything but a simple
black-and -white guideline.
Rule
10b-5 represents a mini-annuity and lifetime employment plan for hair-splitting
and word-parsing securities lawyers, all rolled into a couple of sentences. The
omitted material facts are those which would be necessary "in order to
make the statements made, in the light of the circumstances under which they
were made, not misleading." This kind of determination is obviously much,
much harder to make, in no small part because we lie through sins of
omission every day, often as a matter of social courtesy, so as to avoid
conflict, hurt feelings, embarrassments, delays, etc. It's just part of what
the world teaches us is essential to going along and getting along. The truth
is that a lie is one of the basic building blocks of good manners, and always
has been.
And
sadly, we lie in business all the time as well. One of the great unspoken rules
of due diligence is that a little inaccuracy or omission can sometimes
save tons of explanation. Especially when you're a simple entrepreneur
trying to explain your somewhat complex new venture to a bunch of
over-caffeinated MBAs whose only job is to find the warts and the bumps in your
business so they can tell their bosses to pass on the investment.
Omission
and avoidance aren't particularly nice or "legal" approaches to
disclosure, but, in many cases, they're very practical ones. Similar, perhaps,
to telling your buddies that they are buff beyond belief, or your female
relatives that they look absolutely great stuffed into a pair of jeans that
wouldn't look great on anyone half their age or size. Fudging the truth seems
like the polite thing to do and the lesser of many other possible evils. While
it's true that the truth only hurts when it ought to, sometimes you are so much
smarter to keep your mouth shut and let someone else be the truth teller.
Likewise,
veracity should be an ongoing consideration when selling yourself-- as when
you're hawking a security or raising funds for your startup. With so many
people looking around for their next jobs (most from the comfort of their
current employment) and the occasional nuclear explosion of a Theranos or
WeWork that summarily dumps thousands of people on the pavement, it never hurts
to polish up the old résumé and decide exactly what picture you want to
present to your next prospective employer. You might call this
résumé rehab.
I got
to thinking about this issue in connection with some very interesting research
by Blind, which describes itself as an anonymous
professional and worldwide network of 2.8+ million verified professionals--
whatever "verified" means these days--discussing things such as
compensation, employment, and layoffs.
Blind
recently reported on the results and findings of two surveys directed to more
than 2,000 current (and former, I imagine) WeWork employees. According to
Blind, more than half (56%) of WeWork's employees were worried that they would
be affected by the upcoming layoffs. This indicates to me that the remainder of
the We employees must be deaf, dumb or blind to have missed the avalanche of
news about the company's prospects and plans or so stupid that they are still
drinking the cocktails, tequila and, most importantly, the company Kool-Aid.
Not
surprisingly, more than 80% of the WeWork tech employees are actively seeking
their next jobs and more than half of everyone else in the joint is also on the
prowl for a new position internally. About a quarter of them think their future
salaries will be negatively impacted by their prior WeWork association and that
they will be facing lowball offers. Almost 40% of them are seriously
worried about putting WeWork on their resumes.
And
that's really where the rubber hits the road. You might ask yourself at this
point what you would do under the circumstances. Good
question, whether this is timely at the moment for you or not. And, if you ask
enough people, you get some very vague and interesting answers in these morally
confused and frightfully pragmatic times, where situational ethics are much in fashion.
My favorite answer so far could have come straight from the scripts
of Billions or Succession. Someone actually told
me that "a lie isn't a lie if the truth shouldn't be
expected."
So,
grasshopper, what can I tell you by way of advice? There's never an easy or
perfectly clear choice and it's much harder when you're out on the street or
worried about your next paycheck and how you're going to put bread on the table
for your family. What I can propose is this: you need to play the long game.
What comes around goes around--and sometimes a little lie can come back at the
worst possible time to bite you in the ass.
My
suggestion is simple: tell the truth, with all its ragged edges. Put it
all out there, cross your fingers, and roll the dice. A little prayer never
hurts either but remember that you can't pray a lie. If you tell the truth, the
truth becomes part of your past. If you lie (even a little one), it becomes a
part of your future.