Do they exist? I don’t know. Neither apparently does the Harvard Business Review.
Some years ago I worked with an entrepreneur who was raising his first $10 million of VC investment (“Series A”), without which the company could not proceed. One key element in the investment pitch was a strategic relationship with a multinational customer. The day before finalizing the investment, the customer announced that they were backing out. I advised my friend to inform his investors, but he chose to let them know at the first board meeting after the money was in the bank. I don’t know how he told them, but there was no apparent negative fallout. Was I being naïve? “I might have lost the company if I had made a fuss over the lost customer.” Today this venture has strong revenues, top-tier venture backing, and is a strong IPO or acquisition candidate. Was it acceptable for this entrepreneur to lie to save his venture?
I run a small creative agency in Hong Kong, and what I do know is that a differentiation needs to be made between “lying” and “positioning”. The differentiation between the two, and how an entrepreneur chooses between them is what really matters. The former is obvious enough – an untruth told as a truth. The key is defining the latter.
While I think lying is ethically unacceptable, NOT telling the truth is not – and there is a difference. Before you dismiss this as mere semantics – hear me out. In the HBR example above, the entrepreneur was faced with two choices: tell the investors the truth about the key customer backing out of the deal; or lying to them about it by saying the deal is on. There is in fact a third option – not telling the truth, “positioning” the facts (which is perhaps what the author also hinted at when he wrote “I don’t know what he told them”.) “We are on the verge of signing the deal” or “The customer is in place to sign the deal” would not have been The Truth, but would have made the best of a bad situation – for the entrepreneur anyway – while remaining ethically ambiguous.
Call it what you will – “bending the truth”, “stretching the facts”, “spinning the story” – but the sticking point remains that “positioning” has become, or perhaps has always been, an integral part of the sales process.
What do you think?