The Five Most Common Lies in Business

From an article on Fast Company

Lie: “People are our most important asset.”

Truth: “People are our most worrisome and unpredictable asset. Our most important assets are really our financial assets.”

How is this true? A pile of capital – so what does it do? Really, I’d like to know about this autonomous manifestation. If true, I could retire today. While I agree, people are our most worrisome and unpredictable asset, they are no doubt the most IMPORTANT asset.

Lie: “This was a rational decision.”

Truth: “I wanted to do this.”

Well maybe you wanted to do this because it was a rational decision. Emotional or irrational decisions in business lead to disaster.

Lie: “We judge people by their performance.”

Truth: “I judge your performance based on how much I like you.”

On what else can you judge them? Paul LaFontaine mentions that we keep people we like and get rid of people we don’t. This makes sense because generally people we like do a good job and people who get along with no one generally make a mess of things. Why is that so hard to understand? Is he honestly trying to say that companies get ahead by promoting suckups over performers? No, people you really like tend to be people you respect. Respect is a clear marker for a solid performer. This one’s a no brainer, Paul.

Lie: “This is business, it isn’t personal.”

Truth: “Everything’s personal.”

Yes, everything is personal, but those that can get past it and see the sunk cost, or eliminate the factors that really have no bearing on the problem, then we can get ahead. Look, I don’t hate you, but the fact remains, I performed $100,000 of work for which I have not been paid. That makes me mad, but I’m not taking action because I’m mad. I’m taking action because I can’t write off $100,000. I’m sorry that your company is in a bind, that your several hundred employees might be in the unemployment line next week. If you don’t pay me X% by %Y, I will file suit. It sucks, so yes, go ahead and yell. Everything is personal, but the fact that you can rise above and maintain objectivity regardless of the sob story will be the difference between your employees in unemployment or his.

Lie: “The customer comes first.”

Truth: “I come first.”

This is true, of course, but HOW do I come first? By staying in business and earning a profit. How do we, in fact, stay in business: By serving our customers well enough to make a profit. So who comes first again?

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4 Responses

  1. Paul LaFontaine says:

    Paul LaFontaine here.

    This list of five lies was a sidebar created by FC when they interviewed me for the article about nine years ago. The beauty of the web is that is once posted the content never really dies. I’d forgotten about it until I stumbled on it here.

    I disagree with O’Malley even after all these years because even though FC designed the list to be provocative and sell magazines there is an underlying point that he is missing in his commentary. The point I was aiming at is that there exists a false framework that is a legacy of Industrial Age – that human beings are machines and can be measured objectively and managed accordingly. All five ‘lies’ spring from that false framework.

    Not only is it not true, it creates poisonous results. The HR policies and politically correct management babble that results from an attitude that everyone can be measured and we’re all cogs in a machine can be called “lies”. They are lies designed by lawyers, propagated by HR professionals and spouted by managers (and consultants) to keep companies out of trouble.

    I won’t comment on all the O’Malley comments, but I will say more success is gained when the emotional, human aspect of business is noticed and honored in every transaction or interaction. Saying ‘get past it’ isn’t actually getting past it. You have to understand the emotions invovled, get to their root and work through them. That’s using the truth of a situation to get a good result.

    So try this. If a client is angry about something you did or did not do, tell him you have respect for his sunk costs and that people are the most important asset and your performance, objectively measured over a five year period, exceeds all standards for deliverables. Tell the client that in a fair and even world where he, the customer, comes first, he should get past the incident because it is all profitable growth and budgetary fulfillment and the implementation of continuously improved open source revolutionary practices. Really gobblegook it up with all the two by two matrix stuff and ignore the fact that there is a human being there who’s angry. See how that works.

    Then if another client is angry about a similar thing, tell her you understand she’s angry because you put her in a bad spot, you feel bad because you like working with her and that you will personally make it up to her. Listen to what she says fully and sit there until she it done and do not avoid her anger. Then hustle to fix whatever the problem was because you don’t want to let her down person to person. See how that works.

    Try both, O’Malley, and come back to tell us which one works better. I know the answer already because to me, its a no brainer.

    That was my point. Thanks for the comments and good luck with your business!

    Regards,
    Paul LaFontaine

  2. O'Malley says:

    I don’t disagree with a thing in your comments 🙂 It’s hilarious, but I had no idea that article was so old. Funny how the web acts like a piece of toilet paper stuck to your shoe, huh? Sometimes I wince when I read my old usenet postings from pre-WWW.

    So, on to your comments.

    How do you get "Our most important assets are really our financial assets" from your assertion of the false framework? I’m sorry, I just don’t think that follows.

    I too see people not as cogs but as living breathing autonomous agents with the capacity to take your company to places you never would have expected. If you treat them like cogs, however, they will probably drag you down into the pits of despair. So I agree, but your original article did not convey that.

    I get that the purpose of your original article was to be provocative. With that in mind, I decided to be provocative right back, and in the end, we could deconstruct all day in an endless death spiral. It could be fun.

    I’ll stand by my original point, human beings are the most worrisome and unpredictable asset, but they are no doubt the most IMPORTANT asset.

    I’m sure we agree on that.

    Good luck with your business!

  3. Paul LaFontaine says:

    Then we are enjoying ourselves as Agents Provocative.

    Your point on ‘financial’ vs human assets is sound and I don’t disagree. Floating financial assets without real tangibles behind them make no sense. Nine years on, with a little more experience, I’d modify that to say that a company’s most important assets are its most leverageable assets. That varies from industry to industry.

    For example, in retail (online or off) the brand is a companies most important asset. In technology, the IP and product introduction process. If you look at a company’s center of gravity, that thing without which it would not operate as it does, it is usually something with a very high switching cost. And it is usually the thing that creates ‘value added’ margin. A brand or a process. That center of gravity is rarely its people. Large numbers are “rightsized” for better cost profiles. Terminated for the “needs of the business.”

    This concept is even more pronounced now than nine years ago. If you look at the global superbrands and the technology companies that helped create them, the smaller importance of people was clearly demonstrted by the flight of manufacturing and service centers offshore. The importance of brand and process was heavily invested in. If you measure importance by investment, its been about the brand and processes – the leverageable assets.

    Individuals, of course, make a huge difference. And super performing individuals who treat other individuals with respect (as you pointed out), honesty and humanity tend to create huge results with the other leveraged assets.

    The article was written by a freelancer to get published in a magazine. The magazine liked the provocative five lies concept to get people to flip through, have their attention tickled and buy the issue. Once they bought it circulation would improve and advertising profits would increase. It was airport lounge attention span theatrics using the Truth to increase profits of a magazine. That’s business.

    The original target of the article is a psychologist named Brad Blanton who wrote a book called Radical Honesty. He was interviewed and set me up for my small soundbite portion and I did some provocative grandstanding to get into the bubble box. I wanted my 15 minutes and I guess I my ship finally came in here with these posts. Thanks, Brad. Fame is all its cracked up to be.

    And thanks to you O’Malley! Blog on, brother.

    Regards,
    Paul LaFontaine

  4. O'Malley says:

    Thanks for your comments. And you’re right, I agree with what you’ve said. Assets that can be leveraged, whatever they may be, are integral to a company’s success. I guess the only place we diverge is in what “human assets” means. You seem to lean toward considering human assets to be just labor or having something to do with quantity. From my point of view getting rid of employees doesn’t necessarily impoverish a company.

    I’m thinking of human assets as any human at the company… including Jeff Bezos. Say Amazon automates itself down to 1 employee, just Jeff. Isn’t the most important asset still human? Afterall he reduced costs and had the vision to automate. He had the intelligence to execute his strategy and develop the brand (important) and eventually create a successful global online retailer. He’s the most important asset. The same company with all its financials, assets, branding, etc in another’s hands might just go into the tank.

    And there a lot of examples. Sears, KMart, Sun, GM, Ford, the airlines (except Jet Blue and Southwest), and on and on, each one a company with excellent supply chains, good financials, solid trusted branding, and by all accounts, excellent people mostly. Their most troublesome assets were the people in management who failed to adapt to the quicker/lower cost global supply chain (Kmart, Sears), or to anticipate the cost of benefits (car manufacturers), or had no true sense of how to get the whole company pulling in the same direction (airlines).

    As for branding: For every example of why branding is the most important asset (in retail) there’s a counter example of an excellent brand that nobody cares about anymore because they couldn’t deliver. Sears isn’t what it used to be. Napster is also a quick one that comes to mind. Didn’t your old employer snap that one up for millions thinking the brand was worth something (or was it mp3.com)? Turned out to be wasted money in any case. In fact, Google, if they stop delivering relevant search results tomorrow, will sink faster than the Titantic and in two years, people will ask – Google who?

    I guess in good Kantian principles, take the whole thing to its logical conclusion and get rid of ALL people and what have you got? No business.