Lies

post # 9 — January 29, 2006 — a Managing post

What follows is an article I coauthored with Julie Lindy, the editor of INSIDE Public Accounting. I plan on revising it into my usual article length, but thought the blogosphere would like to see the shorter version which appeared in Julie’s newsletter/magazine this month. Julie Lindy is a veteran journalist who has been covering practice management of accounting firms for more than a decade. Contact her at (678) 686-6528; jlindy@hudsonsawyer.com.

Let’s face it: lying is a very common human activity. Not only is it easy to lie – it can even be the polite or politically correct thing to do. “Your baby is beautiful.” “Don’t worry, spilling your drink on my carpet is no big deal.” “Your party was so much fun.” We often find ourselves lying for the sake of kindness and social graces.

However, equally common are the times when we lie not to preserve the feelings of others, but to try and create an advantage for ourselves. That’s when we get ourselves into trouble – almost always. We are so eager to impress that we end up saying things that are so hackneyed and improbable as to backfire immediately: “My child is brilliant” “Trust me, I’ll do the right thing” “The check’s in the mail” “It’s not about the money.” (Does any listener ever believe any of those claims?)

The lies accounting firms tell flow just as easily. And, like social lies, accounting firms often tell them knowing that nobody really believes them. Everyone, speaker and listener, knows we are making conventional, time-worn claims (often phrased the same old way) that have little correlation with reality.

There are four categories of accounting firms lies:

Lies to clients: These lies occur throughout most firms’ marketing materials. Look at some obvious lies prominently placed on the Web sites of three firms in the INSIDE Public accounting list of the largest 100 accounting firms:

• “We dedicate all of our resources to the long-term success and general well-being of our clients.”
• ”[Firm X] is uniquely qualified to provide audit and accounting, tax, information technology, estate and financial planning, and management consulting services to a wide range of industries, individuals, estates, and trusts.”
• “Our core purpose is to use knowledge, experience and innovation to solve problems and enhance opportunities for our clients.”

Do the firms that say these things about themselves really think clients and prospects who read these statements will believe them? And if everyone knows that the claims are not going to be believed, why do firms continue making them? All that happens is that by continuing to make claims that are (literally) non-credible, less trust and confidence is built, not more. It’s all very peculiar!

It’s no explanation to argue that firms really believe that they are superb at these things. It’s always been true that what you think about yourself is irrelevant data. It’s what others think of you, not what you think of yourself that determines your success. Unproven claims have become a hallmark of marketing, but in a reputation-based business like accounting, it’s much more effective to provide some evidence and let people draw their own conclusions. For example, client testimonials are an effective way to deliver your message. They allow you to avoid the perception of lying, because you’re not making a claim.

Lies to staff: One of us recently spoke with a firm that claimed to be a terrific place to work. When he asked for proof, firm leaders replied, “Well, we can’t prove it, but we just know we’re a fantastic place to work!” Saying something is true doesn’t make it so. In these times of desperate staffing situations, it’s tempting to say what employees and potential employees want to hear: “We have great communication between partners and staff.” “Our people are our greatest asset.” “We offer flexible schedules and believe in work/life balance.” “We live by the following core values …” We want to believe we are great at these things, but are we really? When was the last time you asked your employees how well you were living up to your espoused values?

Lying to staff can have damaging long-term consequences. Recently a tax senior felt so compelled to vent his frustration with the firm he recently left that he wrote a confidential letter to the editor of IPA: ”[Firm Y’s] partners … have to lie in interviews to get people to come work for them. When I interviewed with this firm, they made multiple promises that they didn’t keep.”

Is this what you want former employees saying about your firm in your community, or to the press? Again, testimonials are extremely powerful. The only people really qualified to say whether your firm is a great place to work are your employees.

The biggest danger in lying about our performance and effectiveness (without confirming feedback) is that it can lure us into believing our own PR. Once you start lying to yourself about what you are good at, you’re really in trouble, because you’ll stop looking for ways to improve and you’ll suffer doubly – once for the poor performance and secondly for being so manifestly “out of it” that you can’t even see what you need to improve.

Lies partners tell each other: Here are some common ones: “We act like team players, putting the interests of the firm before our own.” “We treat each other with respect.”

“We keep our word to each other in contributing non-billable time to help the firm develop.” “We don’t care who gets the origination credit. We help each other with marketing and business development”

These are all very nice things to say. We might even mean them when we say them. But how many times do partners catch each other dropping a ball or breaking a promise to the practice group or some other team – and do nothing about it? “The trouble with law firms is that the culture is: Promise big. Deliver little. Get forgiven. Repeat until totally frustrated,” says consultant Patrick McKenna. Accounting firms aren’t much different, are they? Forgiveness, toleration and understanding are certainly virtues, but failure to hold each other accountable isn’t good business.

Successful businesses don’t tolerate broken promises and uncompleted actions. “At McKinsey & Co., there is very little you have to do. But if you say you’re going to do it, you must keep your word,” Managing Director Ian Davis reported in a speech at the London Business School. People who don’t keep their word create a chain reaction of consequences – wasted meetings, redoing of tasks, unnecessary downtime, and missed deadlines that are deadly to an organizations efficiency and quality. And of course, the attitude quickly spreads that if the other guy doesn’t have to keep his word, I don’t have to either, and the whole thing spirals!

Lies partners tell themselves: Do any of these sound familiar? “We manage for the long term around here.” “We balance financial metrics with soft contributions like mentoring and being a good citizen when dividing the pie.” “We reward our group leaders for time managing their groups and forgive them if that means fewer personal billable hours or less origination. We want them to focus on their groups.” Sounds nice, doesn’t it? But is it the truth? We’d save ourselves from so many blunders and foolish notions if we could only see ourselves as others see us, the poet Robert Burns points out. Like the other types of lies that firms tell, these lies aren’t mean or malicious. They’re the lies of self-delusion. We want to believe them. Often, the claims we make don’t have the desired impact, so we raise the temperature of our tone. We exaggerate to make affect, and in the process, hurt our own credibility.

Exaggeration, misrepresentation and lying – however innocently or well-intended – has never made good business sense, as tempting as it may be. Lying and getting away with it puts you at risk of being found out in the future. Lying and not being believed destroys your credibility immediately. It’s just not worth it!