The newly minted July-August 2021 edition of Harvard Business Review (HBR) includes an insightful ethics article titled “Entrepreneurs and the Truth.” It doesn’t beg the question, “Do Entrepreneurs Lie?” Rather, it plainly acknowledges that entrepreneurs indeed lie and is illustrated with seven exquisite photographs of snakes. I’m usually ambivalent about snakes, even when encountering them as I have while hiking or lake swimming, but they are mesmerizing and make for both a good startle and analogy, so I get why they’re used to illustrate an article about truth-telling.
That HBR article doesn’t wholesale demonize entrepreneurs nor compare them to snakes, of course. And it does the usual good job of setting out the problem (in this case of entrepreneurs exaggerating or obfuscating), offering a few reasons for such behaviors, and offering some guardrails to reduce deception. We invite you to read it if you have access to HBR (pp 126-131; Reprint R2104J). Meanwhile, I sketch a brief recap of the article here to set the stage before turning to how we address truth-telling in our book Better Capitalism.
The authors of the HBR article are correct not to demonize entrepreneurs or suggest we are less ethical than other businesspeople. Rather, they plainly set out the contours of entrepreneurial challenges as they see it: we’re always “on” and performing; we have a lot on the line so a lot at risk; and it’s relatively easy for us to get away with deception. The authors also offer insights into how entrepreneurs rationalize their lies: it’s for the greater good; I’m protecting my people; and, everybody does it. Anecdotally, these insights resonate with my lived experience. For the benefit of everyone involved, from investors to potential employees, the authors suggest two guardrails for keeping entrepreneurs honest: show your evidence and assumptions to your potential investors and other stakeholders; and, surround yourself with people who will help you be your best. Again, I encourage you to read the article.
In Better Capitalism we address the pervasiveness of lying and respond with the transformative corrective of being a trusted trustee, whatever that position of trust might look like (e.g., lawyer, reporter, politician, manager, entrepreneur, etc., etc.). Drawing two themes from ethical studies we create and adopt a two-prong litmus test for being a trusted trustee. We feel our approach of going as far philosophically or theologically upstream as possible to develop and deliver a tangible tool such as a litmus test, whether for personal use and/or to gauge others, is the place to start before offering guardrails.
Guardrails are helpful, don’t get me wrong. But better each of us should understand and integrate within ourselves the fundamental traits of a trusted trustee. From that posture of both understanding and being a trusted trustee, you’ll find little need for guardrails. We offer application guidance and examples, as we do at the end of each topic in that part of Better Capitalism. Some might view our guidance and examples as guardrails, that’s fine, as long as they help make the deeper transformation to a trusted trustee.
We share here the Partnership in Practice examples from the "Trusted Trustee" section:
● Pitch or spin if you must, but never stray materially from the accuracy of the underlying facts.
● Perform to your best abilities every task entrusted to you, recognizing it will likely one day be exposed and examined.
● Explain clearly and transparently to the other person the work you’re performing on the task they’ve entrusted to you, and dutifully complete what you’ve represented; this is especially true when working for those without the technical expertise to verify your work.
● Insurers and warranty providers: make coverage clear and stop making your insured fight to receive the coverage you represented you’d provide.
● The goal of every human in every relationship (including the relationships of economic exchanges) should be that of being a trusted trustee.
Do you or someone in your organization have difficulty keeping the truth? Do the justifications from the HBR article sound familiar to you? Are you ready for a sustainable corrective? We encourage you to make the transformation to becoming a trusted trustee.
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