Procurement ethics – when is it OK for procurement executives to lie?

This is another post from  our special series titled, "Things your intern needs to know as (s)he starts his / her career in business".

Today we'll look at the knotty issue of telling the truth, or if you'd rather look at it this way, when is it OK for business people to lie? Now this is of particular interest to procurement people, I'd suggest, because we tend to get many opportunities to lie for the good of our organisations. What do I mean by that? Well, have you ever used phrases like these:

  • My boss won’t sign off that price increase – anyway, your price is 10% higher than everyone else's.
  • If you don't improve your service, I have another supplier lined up to take over the work.
  • I've had a quote significantly cheaper than that.
  • Yes, of course we will pay you to 30 days standard terms.
  • Sorry, I'm in the middle of a meeting, I haven’t got time to take your call and talk about your exciting  new product .

Now of course, any of these may be true, but let's face it, sometimes they're not. I was talking to Claire (my intern) the other day when I got a call. "I'm right in the middle of something critical" I think I said, which was a slight exaggeration - but when is it acceptable to tell those little white lies, or even those dirty great big ones?

Most philosophers don't see an absolute moral standard on lying. It seems obvious that occasionally it is the right thing to do. (Would you tell your five year old that a favourite pet died an agonising death, or "went to sleep"? And presumably any of us would lie to save the life of a loved one).

But in business terms, the lines are very blurred. So my advice to Claire went something like this.

1. Be very careful about lying to your boss or indeed close colleagues (apart from the trivial "yes I like your new shirt" sort of thing). If you get found out, it is hard to recover trust. On the other hand, I probably wouldn’t tell my boss I was going for an interview with our biggest competitor, so there are always exceptions to the rule...

2. You should never lie to get people into trouble, unless they have done something really bad to you! That seems a moral no-go line. If you forgot to place the order, you don't blame the supplier for non-delivery.

3. If you didn't invite the contact in the first place, lies of the "I can't make that meeting / phone call because of a prior engagement" are harmless and help the world go round. They are often less brutal than the truth - “I would rather pull out my own wisdom teeth than listen to you telling me again about your new IT security software product”.

4.  Lying in negotiations needs to be handled very carefully. Giving a certain impression – that you have a better offer, that you’re not that impressed with a firm’s performance – is OK, but I wouldn’t recommend outright lying - it is a dangerous game.  For a start, if you are found out, the other party will probably never trust you again.

So, I guess I might have used the “we’ve had some better offers” line when it might not have been totally accurate. But  I would avoid saying “IBM offered to do it for a million less” (if it wasn’t true). That is too precise and of course, your negotiation opponent may just have a really good friend in IBM, who will tell her that you’re talking nonsense!

Anyway, further thoughts about navigating through this moral maze gratefully received.

Voices (10)

  1. slimey salesman:

    suppliers may have more “opportunity to lie” but in my experience (which is enterprise outsourcing, big ticket technology sales, etc.) this just doesn’t happen.

    buyers all seem to think that salespeople are lying sharks who will say anything to get a deal. In 20 years of selling i have only known one instance of somebody lying to get a sale and he got found out pretty quickly afterwards.

    but in 20 years of selling, i have had countless instances of having to remind buyers of the mis-representations they (or their team made) during negotiations to improve leverage, either during price negotiations or during early positioning to establish some kind of power imbalance. I even know one very experienced procurement coach who has lying embedded into the negotiation framework he teaches… including for several FTSE100 firms.

    i think sales as a profession came under the spotlight decades ago and as such is well scrutinised and (in some instances) regulated as to what can and cannot be said. it would be excellent if procurement went through the same wringer.

    imagine the possibilities… a buyer and a seller genuinely collaborating to see if one had a service which could meet the needs of the other at a mutually agreeable price, without the silly games of poker and bluff which often sit in the middle!

  2. bitter and twisted:

    Eureka! And that’s why pertnerships and outsourcings etc go tits up, instead of a buyer/seller you’ve got seller/seller, which means 2x the uncertainty, possibly 4x due to square law.

    1. RJ:

      I suspect this is the first conversation on Spend Matters where penises and (sic) pert(nership) tits have cropped up. Seems like one of those challenges to insert a particular phrase into a conversation.

      By the way b&t it’s good to see you live up to your name. On a more serious note ref: your comments, I have some sympathy but feel you do need some degree of trust in business. Scepticism is often a good thing, blind faith naive and dangerous but downright cynicism can be poisonous.

  3. bitter and twisted:

    If the magic procurement unicorn offered you an enchanted negotiation table which compelled everyone to tell th truth, you’d bite its hoof off, right?

    Suppliers have much more opportunity to lie than buyers. Money is money but a product or service can suck in myriad unforseen ways.

  4. Dan:

    Lying is wrong, but exaggeration should be ok.

    The recipe is: two parts truth and one part lie. Stir well and serve. Hopefully they’ll swallow it.

    1. Bill Atthetill:

      Excellent point Dan. I like it.

      Building on this notion, and reflecting upon the fact that, statistically, men lie more, and exaggerate far more(!), than women, here’s an example, aligned to what you propose:

      “It’s 12 inches long”

      versus

      “I use a 12 inch ruler to measure it”

      The first is obviously a lie.

      The second is two truths blended with a lie to create an ‘exaggeration’.

      Let me explain.

      1. I need an accurate means of measurement and use a ruler (true).

      2. It is a standard 12 inch ruler (true again).

      3. I deliberately mention “12 inch” to give the impression that I need all of the ruler (a lie).

      And later that evening, a ‘casual’ observer would say: “Hey, you exaggerated!”

      (You will note that, nowhere in the example above, have I mentioned the word ‘penis’.)

      1. Dan:

        Its important that there’s enough truth in there that you can weasel out of it if you’re caught out.

        In the immortal words of Homer J. Simpson: “weaseling out of things is one of the most important skills you learn. Its what sets us apart from the animals. Except for the weasel”.

  5. Paul Wright:

    Years ago I worked with the purchasing manager of a major chemical company who was open about lying to suppliers because “it works and they never know”. I also worked with some of the suppliers who all said “you can’t believe a word X says”. As you say, once you lose your reputation you can’t get it back.

    1. RJ:

      Is this proof to the old adage that it’s not the lie that matters, it’s getting found out? Having been put in a number of situations with both customers and suppliers where my own or others’ failure to tell the truth has been at best highly embarrassing and at worst has severley damaged the reputation of the organisation I was working for, I would say that it’s never OK to lie outright.

      However, that doesn’t necessarily mean “full and frank” disclosure of everything at every stage – (i) confidentiality can be a serious issue and (ii) negotiation is often a poker game and revealing all of your cards is not usually a sensible strategy.

  6. John Viner-Smith:

    When it comes to Negotiation, the extent to which it’s appropriate to tell a lie varies according to the context and what you’re trying to achieve by telling the lie. As a generalisation misrepresenting your position can be useful and viewed as part of “the dance” of negotiation, whereas being seen as a liar is never useful. The challenge is to spot and navigate the boundary between just “doing the dance” and risking your credibility.

    Whether in old-school, “positional” negotiation or more complex negotiation it may be appropriate misrepresent your position on certain matters, giving yourself the opportunity to manage their satisfaction through managed concession or effective trading but you must always be careful of risking trust. I have seen occasions where negotiators have chosen to tell an easy lie over an uncomfortable truth (for example saying “I’ve got a better quote on the table, what can you do?” when they really mean to say “You need to lower your price 15% if you want to be working with me next year”). In this case, if and when the lie comes to light, your credibility is shot and trust will evaporate.

    Ultimately knowing the difference between simply doing the dance in negotiation and risking damage to the relationship comes down to experience and observation. High quality training can be very helpful, something which our colleagues in Sales have recognised and taken advantage of for several years now.

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