Revenue Journal®

You manage others. What do they depend on you for - more than anything else?

The truth.

You sell a product or a service. What do your customers depend on you for, more than anything else?

Yep. The truth.

Nothing is more valued in the business world, nothing matters as much, as the truth.

Employees eat it up when it's given to them, and, when it isn't, conspire amongst themselves to find out what it is.

Customers demand it, and stomp out (warning others to stay away), if they don't get it.

Those you report to - other managers, a board of directors, investors - expect the truth from you. If you deliver something else, they will find out sooner or later, and they will never trust you again.

Truth and the supply chain.

Business owners and managers, whose products are often made from components that come from other companies, demand the truth from their vendors. These practitioners have to orchestrate a very complex sequence of activities performed by a lot of people in multiple organizations. The practitioner needs to be able to depend on each person and each company to do their part.

The practitioner places a high value on people and companies he can trust - people who will do and deliver what they say, and will not BS him.

The practitioner doesn't want to hire a project manager who will make up delivery dates, based on what he thinks the practitioner wants to hear: "Hey, no problem, we'll have those parts done by May 1."

All the planning downstream from that event depends on that date. If the project manager is just making up the date, disaster will follow.

What the practitioner needs is someone who says, "I might be able to get it out by May 1, but realistically it's more like May 15, and if things go down the tubes, it will be even worse - it could be June 1. So use those dates for your planning."

If there is a problem, practitioners expect the vendor to own up to it and work with them to solve it, rather than slyly shipping them a defective product. One hidden defect can create a disaster for the receiving company, which either catches the problem before incorporating the item into the product (in which case, all the downstream delivery dates will be missed), or doesn't catch the problem and incorporates the flawed part into the finished product. That one decision could then result in injuries, lawsuits, and ruin - due to loss of reputation. All because someone decided to do something that they knew wasn't honest.

We all know why people are dishonest. They figure they can get away with it. They tell themselves it won't matter, because "everybody does it." They decide it's not their problem. They think they will lose money, time, or reputation (ha!) if they own up to the truth. They don't want to look stupid. They want to look smart. There are dozens of reasons why people lie, and only one reason why they don't: Because they have made a personal decision to always tell the truth, no matter how painful.

The truth is, truth drives trust. Trust drives revenue.

This simple truth - the relationship between truth, trust, and revenue - is missing from most business books and articles. I think that's because the reporter or professor had a couple of jobs once, hasn't had personal experience as an orchestrator of complex activities, or hasn't suffered through a disaster due to a deception. It is not a part of their world. They are critics, commentators, and bystanders.

The truth is especially missing from the "get rich quick" books, because these authors want you to think you can get rich quick if you buy their book, so they can get rich quick.

The reality is that it takes time to build trust, and it takes even more time for lots of people to trust you. Those "they were telling the truth" experiences - and the subsequent referrals - happen over time.

I recently interviewed a candidate for a client, a very creative and dedicated young man. At one point in the conversation, when we were discussing compensation incentive based on profits, he said, "Well, profit is relative, right?" - implying that all business people basically lie about their profits, to avoid paying taxes.

Well, I set him straight. Most business owners I know don't play games. They buy things and sell things, and report those activities to the government truthfully. As I said to the candidate, being honest is a choice. It's something you decide to do, and then you do it.

Truth in management.

All day long, employees turn to you for answers to questions. They want to know what's happening with the business. They want to know what's driving you, what you care about, what you will be happy about, what will make you cross, what you want them to do, and what you don't want them to do. They want to know how to solve certain problems. They want to know what you've decided to do - regarding company strategy, product strategy, systems, business infrastructure, policies, and processes.

They don't want mushy, rah-rah management talk. They don't want to be treated like 5-year-olds, whose parents say, "Johnny, this doesn't concern you. Go to bed." They want the truth. If you're having a problem trying to decide what to do, tell them. If you need more data before you can decide, tell them. If you're working on it, but it's not done yet, tell them.

If they come to you with a problem, before you can begin to solve it, you have to get the truth from them. Their version of the truth will only be as reliable as their commitment to being truthful with themselves and with others. A person who lies to herself about what she's doing and what others are doing, will not be telling you the truth. You'll have to get the facts from some other source, confront her with the truth, then solve the problem.

The company leader who neglects his duty to tell employees the truth is going to end up with a mess on his hands. In the absence of truth from above, the employees will substitute their own narrative, which is always wrong - because they don't have all the facts. They make up a narrative because they need something to cling to, some way of perceiving reality, that guides their behavior, decisions, performance, and morale.

If the company's leader doesn't tell them the truth, they will assume that the company leader doesn't care about them and respect them enough to be frank with them, or is hiding something really bad. So their version of the truth takes on a dark, depressing cast, like children at an orphanage run by an evil director.

On the other hand, if they are regularly told the truth, even if it is not a pleasant truth, they will still be loyal and productive. They will find a way to help solve the problems. They will feel as if they are part of the team, the team that knows what has to be done and is acting on it. This is the secret ingredient at the most successful companies.

Truth in marketing.

As buyers, we want to be told the truth. We want to know - what are the strengths of this item, and what are its weaknesses? What are the tradeoffs? Of course, marketing copywriters focus exclusively on the positive aspects of an item, and simply leave out the negative aspects. This is why so many buyers have come to depend on customer reviews. Real buyers, who have had real experiences with the item, share those experiences with others. After reading through several of those reviews, the buyer feels she can make a better decision. The other buyers discuss the pros and cons in a way that informs her. Even if the buyers talk negatively about an aspect of the item, she may decide that aspect doesn't matter very much to her, and she will buy the product anyway, for its other qualities.

It is possible to be positive and truthful at the same time. Jeff Bezos, in a recent letter on the home page of Amazon, manages to pull this off in his inimitable style.

(Click on the image to enlarge - clicking it again makes it more readable, for some reason...)

The first phrase in this letter makes you think he's going to say, "We had high hopes for Kindle before its launch, but we [have been disappointed, have decided it's too early for this product, etc.]." Instead, Jeff says they didn't expect the demand. This is a truthful admission of a mistake in planning. He then makes another confession: They've been "scrambling to increase our manufacturing capacity ever since." The rest of this letter continues on in a straightforward, truthful way to tell customers exactly where they are in the Kindle launch, and what customers can expect if they order one. And, there's a nice touch: a Kindle cake that someone made.

So refreshing.

When times get tough, people get desperate. Truth becomes even harder to find. If you are the business leader who always faces, then communicates, the truth, you are making big deposits in your Trust bank...which will pay off for you in the form of employee and customer loyalty.

Nothing pays like the truth.

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For a little about truth in marketing, and a great example of untruthful, but sophisticated communication, here's a clip from the "comic duo you can bank on," Clarke and Dawe. I especially love the part where he describes how junk loans are made appealing to buyers.