Selling Falsehood

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I am feeling somewhat cynical at the moment so forgive me if this seems a bit one-sided.

What organization has not tried to present itself in as favorable a light as possible through their marketing and promotional efforts? A question for deliberation is, how far can they go before they cross the line into what could be called deception and falsehood? And what causes them to do so? The pursuit of profit? Fear of failure? A win at any cost mentality? The need to attract organizational members? A desire to maintain a harmonious employee or customer base? Simple goal attainment? Hubris?

False statements by an organization fall broadly into two categories, those that are ignored or “winked” at by society and those that carry formal penalties. For instance, false statements made by a representative of the organization during the hiring of a new employee are generally viewed as not rising to the level of needing legislative remedy to prevent, though there is the occasional civil court case. Those kinds of errors when proven, which can be very hard to do, are usually explained away as being made by an errant individual and not routine or systematized throughout the organization. False or exaggerated statements to customers about the goods and services the organization provides rarely results in formal action. And while there are classes of products, such as pharmaceuticals, that are controlled to “protect” the consumer, there are many products sold as remedies or preventatives for this and that which are largely unregulated. Many of those are worthless, and some are truly dangerous. It certainly is a buyer beware marketplace, whether you are purchasing or buying into a physical thing, a service or a point of view. False statements made to investors or regulators are assumed to be more insidious, perhaps because they are harder to pass off as simply an errant individual, and fall into a very different category, a category which carries penalties which can rise to the level of threatening the existence of the organization itself. Arthur Andersen, LLP the accounting firm which made the Enron debacle possible found that out the hard way.

An organization’s behavior and reputation are determined from an aggregation of the behaviors that those inside the company deem acceptable. You want your company to have a reputation of honesty? Then get the employees within the company to behave in an honest fashion. Reward honesty, not those behaviors that lead to dishonesty. So many organizations miss this basic point. A organization that presents falsehoods has people inside of it that feel, for some reason (perhaps they are rewarded for it), that presenting falsehoods is ok. Organizations and their resultant reputation are, to a great extent, driven by the behavior of those residing within. You don’t interact with an organization; you interact with the people of the organization. Maytag, the company, has never shown up to repair the washer, not because the washers are so reliable, but because it is the Maytag repairman or woman who shows up to fix those unbreakable machines. It is the people of the organization that define the organization. The organization itself is an abstraction.

Some companies unfortunately it seems are looking for plausible deniability. They want to claim that one set of standards are in place, say honesty, while not looking too closely at the behaviors that actually get rewarded, say dishonesty. If they officially looked too closely at it, uncovering that the system actually promotes and rewards dishonesty, they might be compelled to do something about it.

And there are those that present false information not because they are rewarded for it, but because they simply don’t have the capacity to differentiate correct from incorrect information. Justin Kruger and David Dunning coined a term, the Dunning-Kruger effect, for when a person of limited ability comes to erroneous conclusions or makes poor decisions, and their limited abilities or incompetence also prevents them from being able to recognize their mistake. Due to this, these incompetent people tend to rate their own ability as above average and suffer from what is called “illusory superiority” and live blissfully in ignorance.  This is not limited to people with lower intelligence as this effect has also been demonstrated among those with significant intellectual power. It is more about a shortcoming in perception. Lake Woebegone, where all the children are above average comes to mind.

The degree to which this is happening in our society is documented in a new book by Charles Seife called “Proofiness”. The main theme of the book is that while we are used to being lied to with words, various organizations today have taken the art of lying to us with numbers to a new level. “Proofiness” is defined as “the art of using bogus mathematical arguments to prove something that you know in your heart is true — even when it’s not.” And it is related to “truthiness” which Stephen Colbert popularized and means “the quality of preferring concepts or facts one wishes to be true, rather than concepts or facts known to be true.”

Dr. Seife documents case after case of bogus numbers being used in an attempt to persuade, attempting to convince someone to sign onto a point of view, to purchase a service or product, or to simply join an organization. Those caught in the act include Supreme Court judges, (who are supposed to be above that sort of thing), politicians (which I guess is unfortunately expected), and providers of goods and services (which is called marketing).

In thinking about all this, I can’t help but be reminded of the Iraqi Information Minister at the time of the American conquest of Baghdad in 2003 who claimed that there were no American troops in Baghdad, and that the Americans were committing suicide by the hundreds at the city’s gates. At that very moment, I remember seeing news feeds of Americans patrolling the streets of Baghdad, with all opposition having apparently crumbled.

Saying something simply does not make it so, which is a concept we seem to have largely forgotten these days.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

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