Every company has a reputation it continuously tries to enhance and protect, and there are a few basic ways companies do this, such as: 1) offering great products and/or customer service; 2) advertising effectively; 3) encouraging positive word-of-mouth, and 4) engendering good public/investor relations.
When a crisis comes – and every company encounters a reputation “crisis” of some sort occasionally (Toyota, for example, is having one right now) – extreme efforts are employed to protect, save, or salvage the reputation, and this can include very expensive consultants who make a killing on these kinds of dire straits.
But whether it’s the normal, day-to-day image enhancement or the crisis image defense, there is a difference between “spinning the truth” and “spinning against the truth.”
If your business is in a slump and the quarterly results weren’t good, you certainly don’t want people to automatically think you’re a failure. Instead, you want people to know more of the truth about you. So you find some of the positive things that are helping; you talk about specific things you are working on to improve the situation; then you back that up with your best efforts to make those improvements come to fruition. People respect hard work, ingenuity, and dedication, and if they’re investors and they think those things from you will make them wealthier, they value them even more. “Spinning the truth” in this situation isn’t a bad thing at all.
On the other hand, think about the following hypothetical analyst question and company response, the situation being that a company has been caught in some “accounting irregularities” (prunes anyone?):
Q: “Your auditors have indicated that you purposely made improper accounting entries in order to boost income. How do you respond to that?”
A: “Well, I wouldn’t say that we knowingly did anything improper; we just didn’t do some of the accounting correctly, and we are remediating that situation. We just made a simple mistake.”
From a “technical” honesty standpoint, the answer is true, right? The Answer was, “I wouldn’t say that we knowingly did anything improper.” Well, of course you wouldn’t say that, because you don’t want people to know, so you have made a technically true – if misleading – statement. In essence, you said that you wouldn’t tell the truth – and you didn’t! Saying that you did some of the accounting incorrectly is also true – you’re just not admitting that you did it on purpose. Are you remediating it? Well, yes, because you don’t want to face the same embarrassing situation again – at least not for those particular indiscretions. And calling it a “simple” mistake is just a matter of perspective, right?
The above is an example of “spinning against the truth.” Spinning the truth is an attempt to enhance the truth, or bring additional truth to light, without denying existing or already-known truth by hiding or twisting it. Spinning against the truth is the blatant attempt to deceive – to mask the truth and introduce distracting arguments that confound the truth. It is an attempt to defeat the truth and replace it with false impressions. Corporate America is replete with masters of this (as are the halls of government, as we well know).
Now, let’s not be naïve. Articles like this aren’t going to make everyone suddenly want to be truthful and take responsibility for their actions. And honesty in Corporate America is kind of like economic game theory. If I’m honest but my competitor is not, I lose and lose big. If I’m dishonest and my competitor is honest, I win and win big. If we’re both dishonest, we both lose a little. If we’re both honest, we both win a little. So my inclination is to be dishonest, because I don’t trust my competitor to be honest, but if he/she is I win big.
Of course that’s too simplistic. And in fact, there are definite rewards for honesty if you make sure that you are doing everything you can to take care of your customers. Perhaps you won’t always prosper in the short run (and Wall Street is infamously short-sighted, which is tragic because it leads to destructive business cycles and hyperactive bubbles that lead to market crashes), but you will in the long run.
This is precisely the kind of message we need to be teaching our children and students and protégés from an early age. Somehow, at some point in the future, perhaps we can progress to the basics of hard work, personal accountability, customer service, and the fair competition in an open marketplace that drives amazing innovation and progress. Because corruption won’t get us where we want to go – it will only enrich a very few, as it has done with every large-scale attempt at Socialism and every market economy run amok.
Can America be truly great? Yes, it can. And Corporate America can be in the vanguard.
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