The temptation to lie
Existing on the capital market, we make decisions about placing our own or entrusted funds in various projects on a daily basis. It is a huge responsibility, but also a vision of the reward that the effort put in compensates the uncertainty and risk. In order to minimize unpredictable events, we make a number of analyses. We examine financial tax and legal issues, review products, study market trends, check team competences, etc. We are trying to understand a specific “business case”. This is part of the “hard” business verification. Once we have gained internal conviction for the project, our attention is directed towards favourable provisions in the investment agreement and the conditions of entry and exit from the investment itself. Somewhere in the meantime during a series of meetings with a potential business partner and exchange of information about the project, we have a chance to get to know the future partner closer. Get to know not only what he himself wants to tell us but also see what he may not want to reveal or what seemingly cannot be seen with the naked eye. In addition to detective services, one of the possibilities to capture the subtleties, is the ability to observe and interpret human behaviour. This ability can support (sometimes speed up) the investment decision, focus our attention on the areas for additional verification and in general be a valuable complement to the “hard analysis” of the business. The basic question we ask ourselves when talking to a new partner is whether or not the person is telling the truth. Janine Driver in her book entitled “You will not lie to me” cites the results of the research which do not fill us with enthusiasm. The author writes:
- 80% of lies remain undetected;
- 9 out of 10 candidates in recruitment processes distort data about themselves;
- 66%-80% of students have cheated at least once during the exams;
- Since 1991, the number of men over 60 years of age cheating on their wives has doubled, and it has tripled for women;
- Adults lie in every fifth exchange of opinions, and students in every third one;
It is easy to conclude that things are similar in the world of investment. Perhaps here, statistics would be even more depressing due to greater temptations, such as availability of money, prestigious networking or prospects for success. Mastering the ability to observe and interpret behaviour helps in capturing lies and identifying dishonest people. The very awareness of “colouring” facts can say a lot about a potential business partner (it is said that little lies are not harmful – instead, we are more interested in where and in what context they occur). The ability to read human behaviour can be mastered. This knowledge can also be used in a subtle way, so that the other (not entirely honest) party does not notice the fact that we are using the lie “detector”.
How to do it?
We will describe this in further posts.
Optim Human team