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Wednesday, September 26, 2012

Be known for reliability and honesty

How far out of the box are you willing to go?

With the political season in full force, you hear stories from the candidates followed the news dissecting the info and presenting the fact checker analysis.  Spin-doctors attempt to correct gaffs or redefine candidates in unique ways.  The fact checkers attempt to provide the context and factual info behind statements.  A recent political speech, analyzed by the fact checkers, apparently was true as delivered.   Parts of concepts were eliminated to allow the stated content to be accurate. However, inclusion of the omitted parts would have lessened key arguments in the speech. Sometimes the political figures do not even bother to make the statements truthful. They stretch the facts and repeat the misinformation enough that people believe the statements as pure fact. 

Sales representatives often attempt to make the product look more attractive by embellishing the stated benefits. This occurs on product labels as well.  Look at products in any health food store.  Specifically read the stated benefits.  Statements like great for your immune system or good for heart health.  What does that mean anyway?  It does not matter that there is little real data to support legitimate concrete claims.  Consumers take the advertising materials as meaningful and purchase the product. 

Entrepreneurs need to raise capital and approach investors.  They tend to put a positive-spin on the company, markets, and team.  They have a goal of getting the investment and painting the company in the most positive light.  They must generate enthusiasm around the investment opportunity and it is hard to do sometimes with the straight boring facts.  A few twists here and snips there and the story sounds much better.

Investors have become a bit more perceptive and tend to check the presented information more carefully.  At some point, they will retain specialists to help review the company and all materials.  The review must match the facts or liability is created on behalf of the company.  There is a point where the spin can become too severe and it is by all measures a flat out lie. 

All CEOs need to retain their credibility and pressing the facts to far gets them labeled as dishonest.  The investor pool tends to share their feelings with others even if they are not investing in the same deal.  Once you have received the label, it is near impossible to convince people you are truthful.  They will discount most of what you say and move on.  They are not likely to challenge you and you may never know their true feelings.  In the past, I was warned about certain people without asking.  They community was happy to volunteer the info about someone they did not trust!

You have to walk a fine line.  The company must appear exciting. Your actions must be justified to your investors from time to time.  Keep in mind that there is a line between SPIN and LIE and once you cross it, your actions are questioned forever.