Corporate integrity was the subject. And “Little Lies Cost Big Money” was the title. Both were integral to a HEC Paris Master Class in Doha, led by Lily Kelly-Radford.
Corporate lies are not just a moral quandary, but a financial problem—in millions of dollars—when more than half of companies lose revenue due to product recalls, fraud, data breaches, and c-suite missteps.
This, according to a ground-breaking study of 7,000 companies by author and management consultant Ron Carucci. His article in Harvard Business Review earlier this year, “Four Ways Lying Becomes the Norm at a Company,” reveals that most lying within corporations is a result of organizational dysfunction, rather than individual character flaws.
Kelly-Radford’s “Little Lies Cost Big Money” presented a number of real-world cases from around the world as the class engaged in a discuss about how the impact plays out in different cultures and how those cultures would address it.
“From the class’ response, we learned that this is a hot topic,” said Kelly-Radford. “People are very interested in how to address it.”
The class suggests correcting organizational structures and processes that may not facilitate honest answers.
How is your corporate integrity?
The presentation discusses the “lies” as distortions that morph and become acceptable and are ignored over time. These collectively have a significant impact on culture and truth telling behaviors. It all affects revenues.
There are four factors that can be addressed to lower the amount of dishonesty in reporting and communicating:
• A lack of strategic clarity
• Unjust accountability systems
• Poor organizational governance
• Weak cross-functional collaboration
“These four issues resulted in a total of 180 billion in lost revenue,” said Kelly-Radford. “If we were to average this across all 7000 companies, it would be more than 22 million in revenue. Who wants to lose 22 million?”
We can vouch for this in our work as we’ve seen how learning can play a roll in making human systems more functional and more effective.
