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Right Way to Deal With an Employee Accused of Lying

This article originally appeared in Business Insider on April 8, 2015.

By Adam Goodman

We have the opportunity to study three very different corporate reactions to allegations of lying.

Brian Williams, whose wartime stories were conflated or exaggerated, was put on leave by NBC News.

Bill O’Reilly, who also exaggerated his reporting experiences, and perhaps told outright lies about them, received no punishment and was fully backed by Fox News.

Now "Rolling Stone" has officially and apologetically retracted its story about rape at the University of Virginia, with the reporter and her editors keeping their jobs.  

So which corporate move is right? It raises the interesting question of how managers should deal with employees who lie. It is tempting to simply say fire the liar, and there are well-established HR procedures for doing that. But as every manager with some experience under their belt knows, it is hardly ever that simple.   

In most organizations, there are three key factors to consider when dealing with lying, or its close cousins such as bending the truth or exaggeration — an organization’s culture, its values, and the impact lying and its relations have on credibility. 

I believe credibility should be the key, so I will start there. Whether it’s between a vendor and a customer or a journalist and the audience, credibility is the proverbial coin of the realm in building and maintaining relationships. Once this credibility is called into question, relationships can crumble.   

Often the question is whether a false statement actually affects credibility. Was it an intentional lie, perhaps an intentional pattern of exaggerated claims, or an accidental overstatement?

For example, innocently making a claim about a product or service that’s untrue can be corrected with the employee and the customer. (“We thought the product could be configured for this feature and learned that it’s just not possible.”) That only works once. Repeatedly making the same claim is obviously unacceptable and should be sanctioned.  

It is clear from the differences in the way NBC, Fox, and "Rolling Stone" dealt with the issue of lying that their approaches to the question of credibility are different. This is an important point for managers to note, leading to the question of culture and values.   

Culture plays a role in determining what behavior is acceptable. Over the years, I have observed that there are patterns of behavior within companies that are largely shaped by culture. The once-staid culture of financial institutions, for example, was warped by the scramble to pump out easy mortgage money before the Great Recession. 

The fast-money culture clearly brought with it assurances by mortgage brokers that it was OK and even smart to take on more mortgage than a person could handle. It was a culture that valued profit behind a veil of credibility. 

There’s an old saying that if there’s a battle between needed change and culture, bet on culture to win. It took a near financial collapse to bring a higher standard of truth-telling to the financial industry, and there are those who argue that this game is still in play.

Cultural change is hard. Culture, like momentum, is a permeating irresistible force in a company that preserves the status quo. We can all point to examples in our lives when statements like “That’s just the way things are done around here” or “Who am I to raise a concern?” are how people defend choices that, on reflection or in a different context, are exaggerations or lies. 

Culture is internal to an organization. Values are observed by those on the outside looking in. We reserve to ourselves the right to decide what a person’s or organization’s values are based on the actions we observe, not what’s engraved on a plaque in the entryway or posted on a website; and certainly not how often or loudly a Brian Williams, a Bill O’Reilly, or their managers tell us that they are credible. Customers can tell.

The issue involving Williams, O’Reilly, and "Rolling Stone" is a particularly good one for exploring the management lessons about lying. 

Media is a culture in which credibility is held in high regard. Brian Williams’ suspension is an example of NBC being concerned about the credibility of its news gathering and reporting. As Williams said, he “misremembered.”

A reasonable viewer then asks, “What else has he ‘misremembered’?” This undermines his credibility and that of the network for past and future stories. Fox News, by backing Bill O’Reilly, chose the personality over credibility. "Rolling Stone" is clearly banking on the rape story being accepted as an aberration and not part of a larger pattern of falsehood in their reporting. As with Williams, time will tell. 

When faced with a situation that seems to involve lying, I suggest avoiding the impulse to take immediate action. Pause, consult, then act. As with so many issues in the practice of management, and as we see in the world of journalism, doing the right thing is not as easy as it might seem.  

- Adam Goodman directs Northwestern University's Center for Leadership and is a faculty member in the McCormick School of Engineering & Applied Science.

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