The truth, the whole truth and nothing but the truth. You hear this in every courtroom drama you watch.

And then there is the story of George Washington and the cherry tree. Young George chopped down the tree and when his father asked if he’d done it, he said “Father, I cannot tell a lie.” This story has become the “proof” of Washington’s greatness and illustration of the virtues of honesty.

Conversely, there seems to be a popular mindset that says small lies (the white lie type) – are acceptable if they are well intentioned or result in meeting a goal.

How do these examples about truth apply to leadership and the workplace? Do we really believe the ends justify the means when the “means” is dishonesty?

If you look at the vision statements, missions and core values of almost every company that exists, you will see a claim of promoting the values of honesty, transparency and trust.

Regardless of how often well-intentioned honesty statements are trotted out there, scandals continue to take place. And some business minds question whether honesty should even be included in core values that apply to the workplace.

Is honesty really the best policy?

In fact, one EY study shows that 81 percent of C-level executives reported that they have policies and codes of conduct in place. But over half of these executives also reported that those who broke policies and breached codes of conduct were never penalized. Five percent of these executives admitted that they would misstate financial performance to if it would help them survive financial troubles, proving that unethical practices seemed to be accepted at some level.

Another study at the University of Massachusetts found that 60 percent of people lie at least once in the course of a ten-minute conversation. And many of these people tell two or three lies within that ten minutes. If you think you don’t do this at all, pay close attention to yourself the next time you’re in a conversation – especially one at a dinner party or social gathering (where we tend to embellish in one way or another).

If you’re perceived as dishonest, your reputation will be sullied. No one will want to buy your products or services again. This result must not convince some, because we see what continues to happen around us. People think they will never get caught, or they justify their deception with the promise of improving profits. Even though some leaders and employees are aware of the risks, they are choosing to engage in these activities anyway.

Are policies enough?

The statistics from the EY study seem to be proof that policies aren’t enough. So what will help leaders understand how to make honesty a priority in their workplace?

It comes down to understanding how the negativity that dishonesty brings into the workplace affects it. It comes down to using science to show that the benefits don’t outweigh the costs of being dishonest.

So the answer is, No, policies are not enough.

According to one author who has spent his career researching the science of influence and its ethical applications in business – Dr. Robert Cialdini – there are three essentials that company leaders must believe to have honesty in the workplace.

1. Dishonesty disrupts employee performance. The science from Dr. Cialdini provides proof that the stress of lying and cheating lowers the performance levels of the affected teams.
2. Dishonest organizations experience greater turnover. It is also proved by statistics that those individuals who are stressed by dishonesty will leave the company. At this point, those who are left are the ones who are comfortable with deception – and are more likely to engage in unethical behavior – even to the point of cheating the business to benefit themselves. As a leader, allowing dishonesty within or with vendors or clients fosters dishonesty among team members.
3. Dishonesty is damaging to the bottom line. Poor employee performance and turnover are the most common detriments to the bottom line and it’s also one of the most expensive. A business of 1000 employees losing just ten percent of employees (who make $40,000/year) would result in $4 million per year in turnover costs. Another form of damage is to reputation and relationships with customers. Even though deceptive and dishonest practices may seem beneficial at the time, they are – as science proves – actually damaging over time and that is rarely worth any short-term gains.

Dishonesty also has some direct costs to your business.

1. Dishonesty erodes the trust between you and your team. Trust is necessary for any leader to lead. Glossing over the truth, telling a flat out lie or acting like the truth doesn’t matter to you – each of these can cause tremendous damage to the trust that you’ve established with your team.
2. Dishonesty can affect your ability to attract clients. Those who can quickly spot insincerity will be the first to avoid you, but sooner or later lots of clients you’re trying to woo will be put off by your dishonesty, shallowness or disingenuous nature.
3. Dishonesty actually trigger a stress response in the body. If you’re stressed, you cannot focus on the present. Stress hormones are released and activate the fight or flight response in the body. Vital resources are diverted from functions that are considered by the body to be non-essential (which includes the neocortex of the brain which handles all high-level, logical thinking. In other words (to get out of our scientific heads for a second) dishonesty actually makes you less intelligent in the moment, and thus less able to make good decisions – and that can hurt you in almost any area of your business.

The Rewards of Honesty

While dishonesty has its pitfalls, honesty definitely has its rewards that can help businesses thrive.

Here is what they are:

1. Honesty builds loyalty in your team and your customers. Honesty can be refreshing for customers and an example for your team. It encourages both groups to want to interact with you again and again.
2. Honesty can help you build a reputation in your industry. More than 80 percent of all consumers (in B2B and B2C) check out companies online before doing business with them. A reputation of honesty can have a ripple effect, attracting new customers who want trustworthy business partners like you.
3. Being honest with potential customers can be tremendously rewarding. A lot of people lie without thinking about it, so your honesty will stand out as behavior that is different and valuable.
4. Living and working honestly will improve your health. Not only can lying cause stress that affects critical thinking, but it can also wreak havoc on your emotions. Being honest can help you experience a sense of relief that you do not have to deal with the cover ups, inconsistencies and misrepresentations that dishonesty brings.

Honesty really is the best policy because it allows you to let go of the need to bend the truth and embrace honesty. Everyone around you sees the positive effects and your business will thrive.

Sources:

https://www.entrepreneur.com/article/311011

https://www.influencive.com/real-benefits-honesty-workplace/