Elastic facts, rational crimes and Andrea Leadsom – some lessons for business

When Nick Robinson asked UK cabinet minister Andrea Leadsom where the money would come from for a cut in business rates, she replied “You’re assuming that money comes from somewhere.”

I was relieved when Nick Robinson tweeted this because I’d heard the interview and thought I must be going deaf, doolally, or both.

I appreciate we live in an era of fake news and alternative facts, but when a senior politician apparently claims it’s an assumption that money comes from somewhere, it seems to take us to a whole new level.

Of course, I’m probably being a bit unfair on Andrea Leadsom, as are those in the Twittersphere who have leapt on her comment with righteously indignant glee.

Nick Robinson was doing what all good political interviewers do; putting her under pressure in the hope of forcing a soundbite gaffe, and she most likely just misspoke; please God, she just misspoke.

In our world of angry politics, misrepresentations of fact are the kindling for the social media fires which keep our wrath warm.

Yet in spheres beyond politics, it’s accepted that facts are elastic.

Mathematical thinking recognises that one plus one doesn’t always equal two.

Empiricist philosophers point out that the entirety of human knowledge is based on what we see, hear and feel, with no underlying absolute proof that our perceptions are valid.

To function effectively, we have to work on the basis that our perceptions reflect reality, but we can’t know for sure. While we may scoff at creationists who believe that dinosaur bones were planted by God to test our faith in Genesis, all science can ultimately say is that all the empirical evidence points to this being hogwash.

This may take us a long way from Andrea Leadsom’s ill-judged spur of the moment answer, but an empiricist philosopher like David Hume would say that, in a way, she’s right.

Just because money has always come from somewhere, it doesn’t prove that I won’t wake up tomorrow and find £100 million in gold bullion at the foot of my bed.  It is indeed an assumption that money comes from somewhere, it just happens to be one that’s been validated on billions of occasions.

If facts are elastic, why do we get so angry when people start playing fast and loose with them? More importantly, how should we deal with elastic facts in a business context?

Clearly, the amount of anger we feel when someone misrepresents something is largely related to the consequences of the particular misrepresentation and whether we see them as positive or negative.

If someone gets to be Prime Minister by peddling untruths, those who disagree with their politics will feel betrayed, while those who agree with them will ignore or gloss over their use of alternative facts. On the other hand, if I spend all evening in the pub swearing blind that Brad Pitt was in EastEnders, no-one gets hurt and I’m unlikely to feel the full weight of social media scorn.

Of course, any misrepresentation also offends our basic moral sense. If you’ve read this far, I’m prepared to wager that some of you are already building up a decent head of indignation at my referring to elastic facts and misrepresentation rather than plain old downright lying.

Whatever euphemism we use, most of us believe that lying is just plain wrong, even though we may make allowances when we feel its outcome is a greater moral good. The TV detective who tricks the villain into confessing by giving them a glimpse of an incriminating document, before revealing with a wry and knowing smile in the denouement that it was just their old shopping list, gets praised for their inventiveness and flair.

Whether we call it elastic fact, alternative fact, misrepresentation or bare-faced lying, how do we deal with it and its implications in business?

The glib answer is that the question doesn’t arise because, of course, business is always entirely open, honest and morally irreproachable.

This is clearly an alternative fact.

From negotiations to CVs and recruitment to sales and marketing, business depends on a bit of factual elasticity.

In my job, I once proposed that we could save time and effort in a commercial negotiation by forgetting the strategies, the extreme openers and negotiation points, and just being totally honest. My boss considered my arguments carefully before taking out the injunction banning me from coming within 500 metres of any negotiating room.

Apart from the poker game of commercial negotiation, we are sometimes faced with complex and difficult business decisions where the difference between the optimum outcome and a much less desirable one may lie in the judicious application of a bit of snake oil.

This may make us uncomfortable, or we may accept and even welcome it as part of the rough and tumble of business; a skill to be acquired, honed and valued.

Whatever our moral view, I think success in business depends partly on dealing with elastic facts in a practical and detached way.

I was grappling with what this might look like when, serendipitously, I happened to catch a radio programme which explored concept of rational crime as put forward by Gary Becker, the Nobel laureate economist.

If I understand it correctly, choosing to commit a rational crime is a bit like signing off a business case.

Rather than acting on the impulses of greed, anger or just plain badness which are traditionally seen as driving crime, the rational criminal objectively and rigorously assesses the costs, benefits and risks to help decide whether a crime is worth the investment.

When the late film director Michael Winner allegedly said “I always drive in the bus lane, it’s only 80 quid and you don’t get any points on your licence!”, he was quoting an excellent example of a rational crime, albeit an extremely selfish one.

Rational crimes thankfully don’t occur much in business, but I reckon rational misdemeanours are pretty common.

Whenever you claim your extreme opener is your best offer, put a bit of extra gloss on the facts in your CV or exaggerate a benefit to get your business case through, it’s a fair bet you’ve weighed the risks of that minor misdemeanour against the benefits and, in these cases, decided that the risk is vanishingly low as it’s pretty much accepted behaviour to do these things.

I once worked in software development for the Operations department of a large airline, and someone calculated that if all the punctuality improvement benefits in our project business cases were added together, our flights would be arriving before they left.

For me, the critical element in assessing whether to commit a rational misdemeanour in business is to make the broadest possible assessment of the risks, particularly the ethical and emotional ones.

It’s easy to focus on the practical outcome and downplay these other risks, but I believe we do so at our peril.

Lady Macbeth and hubby had the practical risks pretty well covered, but they might have saved themselves all that bother if they’d workshopped some of the fuzzier stuff like that pesky conscience thing.

In a shareholder value led business world, Gerard Ratner was probably safe in thinking that referring to his company selling ‘crap’ would go down well at an Institute of Directors dinner, except that their products weren’t as crap as all that and their customers took exception to the tune of destroying a £500m business.

Reputational risk can bite hard, particularly when reputational damage is allowed to accumulate and you find yourself in a TV debate answering questions on destruction of trust instead of what you are actually doing.

If you get found out for your rational misdemeanours and crimes, your reputation can end up badly damaged, but it’s important to make a clear-eyed assessment of how much that matters to you achieving your goals.

It doesn’t appear to have done Michael O’Leary too much harm, while for Boris Johnson, I guess the jury is out. Having a live TV debate audience laugh at you when you start talking about trust in politics looks pretty damaging, but when your only serious rival also gets laughed at for something similarly damning, perhaps it’s just a zero-sum game.

Just as we consider risk mitigation when we look at a business case, we should be making conscious decisions how to mitigate the risks when we commit a rational misdemeanour, and factoring in the costs of that mitigation.

If I know that the only way to get a deal which will benefit my business and all its stakeholders is to misrepresent something to, say, my workforce, I have the usual range of risk mitigation actions available to me, all with their own associated costs and risks.

I can remove the risk by owning up and resigning as soon as the deal is signed, I can accept the risk and hope I don’t get found out, respond by resigning if I get found out, and so on.

I’m sorry if this sounds like a manifesto for the amoral; it’s not meant to be. The important thing is that we objectively consider all factors, including our own and others’ moral sense, before we decide whether, bluntly, a lie is worth telling.

In Sir Walter Scott’s novel ‘Heart of Midlothian’, when Jeanie Deans is given the horrible choice of telling a lie or being honest and sending her beloved sister to the gallows, her morality outweighs all else and she chooses to tell the truth.

In business, while I trust and pray we are never faced with decisions which are anywhere like quite so terrible as Jeanie Deans’, it’s always valid to put our own moral sense above all other considerations.

In business as elsewhere, we sometimes have to deal in elastic facts. In practical terms, I believe the best strategy for doing so lies somewhere between Jeanie Deans and Donald Trump; neither making ourselves martyrs to truth nor feeding off the disruptive power of misrepresentation, but assessing all the benefits and risks objectively and being prepared to manage the consequences.

Now, if you’ll excuse me, I notice that £500 has miraculously appeared in my wallet, so I’m off to toast David Hume and Andrea Leadsom.


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