Jeff Sommer, New York Times business writer on investment strategies, has an interesting article in the May 1 business section about credibility and the ugly truth when it comes to investment advice. He quotes Professor Shlomo Benartzi, a behavioral economist from UCLA as outlining the benefit of being honest as it relates to investment credibility. I guess we need academics to reinforce honesty with the investment community these days. As an example, if a stock picked by the investment advisor goes up and does unexpectedly better (like oil), the right thing to do is to tell the ugly truth (you didn’t expect the stock to do that well), and vice versa.
Upon reading this I realize that it is important to reinforce the value of telling the ugly truth in any business situation. When something happens and expectations are not met, (positive or negative) tell the ugly truth. It is difficult to repeat or prevent something if we don’t understand it. It is also important to be clear about the action we’re taking to learn what happened, and why and how we might do things differently in the future. If we work for or with someone that doesn’t want the truth, then we’re probably working for the wrong people.
Character Move: just like our mom’s always told us, telling the truth, even when it is ugly, is the best policy. The truth comes out; it’s only a matter of time. Think about where we might be more explicit about the ugly truth right now. Our credibility will rise accordingly.
Telling the Ugly Truth in the Triangle,
Lorne