Of all the destructive behaviors leaders can engage in, dishonesty is probably the most common. As children, we discover deception and learn the advantages that deceit can obtain for us as early as age 3 or 4. Unfortunately, deception becomes a habit for some people. These people become addicted to the benefits (almost always short-term) lying can produce, while discounting the long-term costs.

When a person of this nature gains a position of power or authority, the consequences can be disastrous.

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This is Part 2 of a 7-part series on how toxic leadership behaviors manifest in the workplace, what is going on emotionally for the leader engaging in the behavior, and how they affect team performance. See the links below for the other sections:

1.      Introduction

2.      Dishonesty

3.      Bullying

4.      Scapegoating

5.      Micromanagement

6.      Conflict Avoidance

7.      Favoritism

In this piece, I’ll focus on three specific forms of dishonest behavior that show up frequently in the workplace: denial of truth, hypocrisy, and hidden conflicts of interest.

Dishonesty in the Workplace

The core emotion underneath most forms of dishonesty is fear. People lie because they are scared of some consequence. Leaders are no different.

Although dishonesty can manifest in many ways in the workplace—everything from false praise and false optimism to outright falsification of documents and financial statements—I am going to focus on three forms today. These are denial of the truth, hypocrisy and hiding conflicts of interest.

Denial of the Truth

Let’s start with one of the most common forms of workplace dishonesty: denial of obvious truth.

This behavior usually manifests as a leader refusing—in public—to acknowledge the reality of a situation. Basically, a leader insisting something isn’t true when everyone knows it is.

Usually, leadership is obfuscating negative information. Sales numbers are declining but leadership cherry-picks data to make it look as if they are going up, some senior manager in the company is incompetent but other leaders refuse to acknowledge that, or the upcoming merger is going to mean that a chunk of staff are going to be laid off but management only talks about the promotion opportunities (which may be real, but that does nothing to alleviate or acknowledge the anxiety of the people afraid they may be laid off).

Why do leaders deny realities that everyone can see? Usually, it’s fear. Leaders are afraid of the blowback they will get—criticism of their past decisions, deterioration of morale, or even fear of losing their own jobs. The problem is that you can’t hide the truth forever, and when you lie, morale is going to deteriorate anyway.

When a leader tells me that the sky is red when I know it is blue, my reaction is anger. My internal narrative says, “Do you think I’m stupid? I know the sky is blue.” I feel insulted, as if my own senses and powers of reasoning are of no value.

Hint: insulting your own people is not how you inspire them to follow you to the gates of Hell.

Hypocrisy

“Do as I say, not as I do.”

Where denial insults people’s intelligence, hypocrisy offends their sense of fairness. The rules for the leader are different from the rules for the follower. Unfairness—injustice—reliably makes people angry.

Hypocrisy often manifests in corporate values and mission statements. Leaders—assisted by organizational consultants—pick some values like “integrity” or “transparency” that they only follow when it’s convenient. Values only matter if we have to sacrifice something tangible (in a company, usually profit or personal advancement/bonuses) in order to live up to them.

Leaders are also hypocritical about things like work/life balance and “feedback is welcome.” If a leader claims that feedback is welcome, but people that provide frank feedback are directly or indirectly punished, that’s hypocritical. If the company emphasizes work/life balance publicly, but leaders themselves work nights and weekends and reward people who do the same, that is a company that doesn’t really value work/life balance. It values something else.

Fear, again, drives this behavior. A person that punishes critical feedback is almost always insecure—a fear-driven state. If the cultural zeitgeist is that “work/life balance is good”, leaders may fear being criticized or ostracized if they go against that. I would much rather have a leader that tells me straight that “we work 70 hours a week at this company, you can decide if that’s for you or not” and I can make my own decision.

Conflicts of Interest

Conflicts of interest are well-studied in the academic world, and most societies with strong rule of law have many legal safeguards against them. But people still engage in this kind of behavior in subtle ways.

Advocating for a change in parental leave policy, for example, when I am anticipating having children is not a legal conflict of interest. It’s not wrong to advocate for a different leave policy, but it’s dishonest to hide the reason why I am advocating for the change. If I promote a new product to people in my circle without disclosing that I stand to benefit financially if they use the product, that is a conflict of interest. Disclosure and compliance rules prevent most of this kind of stuff in government and large corporate environments, but there’s a lot of it in small business and informal social networks.

The motivation for this kind of behavior is also fear-based. Greed is connected to feelings of scarcity, which is the fear that a person won’t have enough material resources in order to survive. There’s also fear of judgment related to openly promoting a product in which a person has a financial interest. People are afraid of selling and often have a visceral repulsion about it—like they are trying to trick someone out of money. But disclosing the financial interest isn’t the trick, hiding it is.

Dishonesty of this kind undermines trust over the long term. If I learn later on that someone has a financial interest in a product or service that they promoted to me, I’m less likely to trust their recommendations in the future. In the back of my mind, I’m always asking myself, are they telling me about this product because they care about me, or they care about themselves?

If this kind of behavior shows up in a large organization, it opens the floodgates to ethical violations in the rest of the organization. Human beings mimic the behavior of the leaders of the social hierarchies of which they are a part. If I tell my class to show up on time, but I show up late, they’ll start showing up late too.

Why It Matters: Dishonesty Destroys Trust

All of these behaviors, different as they are, have one thing in common: they make people trust you less. And once trust is gone, leadership becomes expensive.

Every time I tell a lie in an organization and get caught—whether I’m hiding a means to enrich myself, I’m claiming to support a value while my behavior says otherwise, or I’m not acknowledging a reality that everyone else sees—the next time I open my mouth, my word counts for less. When people believe me, I can influence with a sentence. When they don’t, I’m forced to use carrots, sticks, policies, or surveillance to regulate their behavior. That’s expensive and exhausting, and also unnecessary.

Truth has a time value, just like money. If I tell the truth now, I pay a cost up-front—discomfort, conflict, or even demoralization. However, if I delay, the emotional cost compounds. Discomfort, conflict and demoralization don’t go away, they get worse. Trust debt accrues interest. By lying, I’m just making it more expensive—in dollars or political capital—to run my own organization over the long term.

I’d rather pay the short-term cost of being disliked than the long-term cost of being distrusted.

Lie now, pay later—with interest.

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Next week, we’ll dive into our second destructive leadership behavior: bullying.

Exercise

Journal on the following or discuss with a friend.

1)      Noticing

When I have been in a position of leadership or authority, when have I engaged in dishonest behaviors?

Have I tried to spin or deny the truth, engaged in different behavior from what I ask others to engage in, or felt that there is a conflict between my personal interests and the interests of the group?

There may be other ways that you have engaged in dishonest behavior.

2)      Excavation

When I lied, what was I scared of? What was I afraid might happen if I told the complete and total truth?

3)      Action

In matters of statecraft and warfare, deception can be a valuable tool when used deliberately. I see that as different from the rampant little white lies most of us tell every day, which are a reflexive response to the emotion of fear.

How can I create an experiment where I try to tell the truth, when I would normally tell some kind of lie (even small) out of fear?

How do I think people would respond to me over the long term, if I gained a reputation for always telling the truth, no matter how unpleasant?