In the previous post, I covered greed as a main erosive agent to public trust in the institution of business. I’m going to argue here that dishonesty – inauthenticity – is cut from the same cloth. It might in fact be a greater detriment to public trust.
A key study revealed that, in addition to “bending the law,” “not telling the truth” was the most salient reason for a person to lose trust in a business.
Palo Alto, California-based Theranos remains one of the most public examples of a deceitful brand promising meaningful impact—and delivering less than nothing. The now infamous story of the epic rise and fall of med-tech Theranos and its founder / Chief Deceiver, Elizabeth Holmes, exemplifies the dark side of duplicitous storytelling.
Because “we humans are … suckers for story,” according to Jonathan Gottschall, America’s best known professor of storytelling (read: we trust what we’re told), we allowed ourselves to get collectively bamboozled by the incredible “story:”
A young (19 years old at founding) female wunderkind, saving the world through breakthrough blood testing nanotech, leading to a $10 billion valuation at the company’s peak and a personal worth of $4.5 billion for Holmes. Wow. That’s the stuff of legend. Perhaps forgivable lapses in our scrutiny were outmatched only by the incredible deceit Holmes was leading.
The media had fawned over Theranos for years, simply reiterating the narrative as originated by Holmes and Co.. No better proof of the awesome power of a story well told, whether used for good or ill. In short, we simply trusted her word, and passed it on.
Lives were literally on the line, but Holmes triaged her own ego as most worthy of treatment. “Consumer trust is currency,” writes Sue Manber, Chief Patient Officer of Publicis Health in Forbes, “and in healthcare, spending it wisely is essential to patients’ health and well-being.” Manber calls for radical honesty, complete transparency, and clarity of purpose.
Are businesses closer to that ideal now, five years later? Are we less naïve today?
For an answer, just study our current era of “fake news,” concerns over which have never been higher. False information being used as a weapon is now at an all-time high of 76 percent, according to the 2022 Edelman Trust Barometer.
This includes, I strongly suspect, all manner of disinformation, agitprop, deep fakes, conspiracy theorizing, super-siloed chronicles, and outright “big lying”-for-gain, during which one world leader has even literally rewritten the book on selling a story that’s demonstrably false—because it turns out, not enough people care.
It’s why we all bought the Theranos story, even though it was all “a series of lies, material misstatements, and omissions,” layer upon layer of tissue-thin falsehoods (to the point even her baritone voice was feigned).
Yes, the Theranos confidence game eventually led to the US Securities and Exchange Commission (SEC) findings of “massive fraud,” lawsuits by former investors, professional sanctions, the dissolution of partnerships, and the eventual decease of the company in 2018. That’s good. That’s helpful in reseating trust in our institutions.
But do you think it’s any less easy for the next Holmes to hoodwink us with our own gullibility? Is there hope of us achieving honest businesses with such indelible examples of fraud and conspiracy so recently afoot?
Bernie Madoff (Inmate #61727-054 at FCI Butner Correctional Complex in North Carolina) proved a decade before these more recent scandals that the former chief of the NASDAQ and friend to kingmakers, celebs, and philanthropists the world over, could systematically defraud said friends of $50 billion in the largest Ponzi scheme on record, all the while seducing the world with his trickster tongue. Talk about Leading With “Me.” Why? To what end? Is it ever worth it?
Shkreli would say no. Madoff, obviously. Yes, Holmes is living in a triple-digit million-dollar Silicon Valley estate—but maybe not for long. In the previous post, I wrote that it was a bad month for her: On January 3, 2022 she was convicted on four counts of fraud, and is scheduled for sentencing in September 2022.
The boldness of these business leaders’ foregoing lies and avaricious moves – the sheer chutzpah evinced by their telling and doing – is notable, and not usually seen outside the political arena. But we mustn’t succumb to any level of admiration for Shkreli and Holmes and their abject abuse of the public trust, any more than we should empathize with Madoff, owing to the genius of his grift and the scope of the scam.
“Establishing a culture of honest storytelling is not only a moral imperative for companies and workers,” argues Gottschall in the Harvard Business Review, “it is better business in a long-term, bottom-line sense. No matter the genre or format, the ancient prime directive of storytelling is simple: tell the truth.”
Perhaps it was just unmitigated gluttony underneath the sociopathy of Shkreli, Holmes, and Madoff, and the likes of Billy McFarland, CEO of Fyre Media, Inc., who scammed investors and patrons out of $24 million related to a fraudulent luxury music festival in 2017 (McFarland’s serving six years at FCI Elkton in Ohio).
But maybe it’s something different, and even more sinister in some ways: Maybe it’s deliberate disrespect for us, the consumers. Maybe they don’t care whether we trust them.
We must. And they must.
So, in a word, don’t deceive—because consumers will see through it, and drag your company’s reputation through the municipal muck. If for no other reason than the sheer pragmatic: When companies don’t earn their trust, studies show that at least one in five consumers will “walk away forever.”
Acknowledge what I’ve learned from two decades of business purpose work with some of the world’s most influential and successful brands: Consumers strongly prefer to buy from brands doing good, and that trust turns on the role that a company is playing in our shared future (for employees, customers, the environment, and future generations). As such, brands such as Cascade, The Gap, Inc., Shoprite, and others are positioning themselves not as exceptions, but as signposts for the new normal in which ROI has been transformed into ROP (Return on Purpose).
ROP is measured in a far broader set of variables that include revenue, shareholder return, employee satisfaction, customer brand affinity, the health and well-being of individuals and the environment, and the welfare and security of all stakeholders and our planet.
Your business is going to tell either that story, or one of increasingly irrelevancy, or in the worst case—a story whose last chapters take place in jail.