Actor Al Pacino said, "I always tell the truth. Even when I lie." There is much truth in this comment. From marketing hype to fake product and service reviews, lying seems to be pervasive. Research and studies show time and time again that we have a penchant for lying: One study says most people lie once a day; we hear, on average, as many as 200 lies a day; 60 percent of people lie at least once in a 10-minute conversation with a stranger; people lie more frequently in phone calls than face to face; and 81 percent of applicants lie during interviews. The list goes on.
Most lies are harmless, garden-variety white lies. They happen for many reasons, such as: a desire to be kind to others ("I'm sure everyone liked your presentation"), a need to save face ("I didn't see your last email; it went to junk mail"), a preference for avoiding confrontation ("I'm okay with all the changes you made"), or a habit of evading responsibility ("It's his fault for not making himself clear").
But, there is also a tangible danger to lying. According to The Association of Certified Fraud Examiners, a typical business loses about 5 percent of its revenue to fraud each year—this translates to a projected global loss of $3.5 trillion annually. Small businesses are the most vulnerable, the association reports: "The smallest organizations in our study suffered the largest median losses."
How can you deal with all the types of lies, big and small, that hurt your business? Here are eight tips to help you:
Institute Strong Internal Processes
Remove any temptations that may encourage your staff to lie or commit fraud. Most small-business owners are too busy growing the business to pay much attention to internal controls; however, weak ones can make you vulnerable. Every adviser will tell you, for example, that you should not have the same employee handle both the recording and processing of transactions. Separation of duties in this case is a smart business precaution.
If you haven't been vigilant in such areas of your business, consider acquiring the ACFE's Small Business Fraud Prevention Manual. It contains a wealth of information for preventing employee and vendor fraud.
Watch for Warning Signs
It pays to protect yourself by watching the behavioral red flags that might signal employees in your business are engaging in fraudulent activities. According to the ACFE, two of the most commonly observed signs of fraudulent conduct are an unusually close association with vendors or customers and an unwillingness of individuals to share their professional duties.
Also, do your due diligence to institute checks and balances, such as regular management reviews. As Scott Hilsen of KPMG Forensic states, "Routinely looking at higher-risk areas and kicking the tires on the key controls can greatly mitigate the potential for fraud and misconduct. Searching for fraud not only involves making sure potential wrongdoers know that you are looking, but also to alert others that you are looking as well."
Train Yourself to Spot Deception
Pamela Meyer, author of Liespotting: Proven Techniques To Detect Deception, provides a free online quiz to test your ability to spot lies. Untrained people can spot lies with less than 50 percent accuracy. There are several resources that can help you hone your lie-spotting skills: Check out Meyer's TED talk, How To Spot A Liar; Carol Kinsey Goman's book, The Truth About Lies In The Workplace, which outlines 50 verbal and nonverbal cues that can help you spot when someone tells a lie; and facial-expression expert Paul Ekman's online software and other training for deciphering micro-expressions.
It's useful to have some knowledge on how to spot a liar; however, the old adage that a little knowledge can be a dangerous thing is certainly applicable here. While it's fun and useful to know the warning signs, it's also important to realize that it's easy to make mistakes. The science of lie spotting is a good weapon for trained law enforcement personnel and psychologists, but it can be a dangerous tool in the hands of amateurs who suddenly decide to show up as Sherlock Holmes at work.
Create an Honest Culture
Fairness in the workplace is the top prerequisite for creating a good place to work. In addition you need honesty, respect, fair wages, appreciation, recognition for work well done, clear job descriptions and lack of favoritism, to name a few. In short, if you create a culture of caring, your employees are more likely to respond truthfully, and in kind.
Don't Push Employees Too Hard
While managers and business owners sometimes need to push people to give their best for the success of the business, research shows that people resort to lying when they're stretched beyond the limit. Setting unrealistic goals and impossibly high standards, continuously demanding faster and better results, setting constant deadlines and expecting unreasonable work hours can overwhelm people and force them to lie about their work in order to avoid problems and protect their jobs. If this is your style of leadership, know the perils that come with it.
Realize That Customers Also Lie
Customers, like everybody else, might lie to us on occasion. If you understand why they're lying, you can use it to your advantage. For example, clients might tell you they don't have a budget, in an attempt to get you to provide a discount. Resist the urge to downgrade your prices. If your product is worth it, they will likely back down. For more examples, check out Lies Customer Tell That Will Help You Sell. Author Geoffrey James outlines seven other customer lies and how to persist and deal with these adroitly.
Know the Health Risks of Lying
Science has proven that lying hurts our health. In Want a Healthier LONGER Life? Stop Lying, we learn that those who stop lying have less stress and experience improved mental and physical health, sleep better and have fewer headaches and less tension. Lying comes with its own price tag on our well-being.
Model Truth Every Day
Remember that, as a leader, you are always in a glass house. People get their cues from you. Guard against espousing values that you don't honor, every day, in every action. For example, don't say, "Customers come first," then treat customers poorly when you're having a bad day. Similarly, don't say, "Employees are our most important asset," then rarely make time to get up from behind your desk to interact with them. Everything counts when you are the chief.
Read more articles on how to be a great leader.
Photos from top: iStockphoto, Thinkstock
Bruna Martinuzzi is the founder of Clarion Enterprises Ltd., and the author of two books: Presenting with Credibility: Practical Tools and Techniques for Effective Presentations and The Leader as a Mensch: Become the Kind of Person Others Want to Follow.