Business Competition in the Age of Deception
The economist reported the executive chairman of Cisco, the world leading Software Company as saying, “We compete against market transitions, not competitors. Product transitions used to take five to seven years; now they take one to two.” Competition in such an environment of rapid change requires new thinking and a new approach and many companies are not keeping up with it.
But rapid change pales in seriousness when compared with the commoditization of deception. Corporate values are the foundation of every leadership. Without the restraining and directional force of values, a business can destroy society.
The social media was awash with stories like Hillary Clinton selling weapons to ISIS and Pope Francis endorsing Donald Trump for President during the period leading up to the United States Presidential elections in 2016. The two stories attracted hundreds of thousands of reactions on Facebook, with many many being unable to tell whether the headlines were real or not.
In a survey according to statistica.com, 60 per cent of respondents believed that the headline which claimed the Pope released a statement in support of Donald Trump was somewhat or very accurate. This highlights the level of confusion that the deception created.
Very recently Nigeria’s Presidency came under fire to disclose the health status of Nigeria’s President Buhari who spent weeks in a London hospital, a situation which generated international attention. As the President’s medical vacation lingered, the news filtered in that President Buhari was indeed
dead and buried in Saudi Arabia and a look alike, Jubril from Sudan installed by Aso Rock cabal imposing himself as the real Buhari.
Situations surrounding the eventual return of Buhari to Nigeria like he’s working from home over a period on the excuse that his Presidential office had been infested by rats, only helped weaken the Presidential position that indeed President Buhari was alive and not an imposter Jubril. This claim generated tremendous dust that it became hard to tell which position should be trusted
Vinci, a French concessions and construction company with operations in over 100 countries suffered an 18% fall in their share price over a fake press release about the company by Bloomberg in 2016. Bloomberg was eventually fined €5m by French regulators Autorité des Marchés Financiers in 2019 for reporting the fake press release because the regulators said the news agency had disseminated information “that it ought to have known to be false” and which was “likely to secure Vinci’s share price at an abnormal or artificial level”
The press release was a hoax announcement published by Bloomberg and replicated by other news media stating Vinci had fired its chief financial officer Christian Labeyrie and was restating its results after discovering accounting irregularities. Vinci shares dropped by 18% even though the company denied all the information contained in the press statement 24 minutes after it was released. This was a well calculated attack launched against a critical asset of Vinci- its reputation by some faceless deceiver somewhere which Bloomberg sadly circulated.
According to Kantar Media, the total U.S. advertising spend in 2018 reached $151 billion, a 4.1% increase over the previous year. In 2019 Apple brand value stood at 309.53 billion U.S. dollars. That’s the investment the company has made as a guarantee it will deliver the results its brand promises. That brand can be the only reason why someone makes a purchase or investment decision in favour of Apple. It’s a critical asset therefore which is worth protecting. A successful attack on the reputation of any company can spell their end.
The discussion so far makes it look like deception is only fabricated by an interested third party to bring another party down. But far from that, there are also calculated efforts by certain governments and organisations to present misleading facts to gain market advantage. It is not uncommon to find organisations engaging in financial engineering to gain an advantage.
One-off restructuring charges are a common example of financial engineering. Earnings smoothing is another. This means understating profits in good years by hiding some of them in the balance sheet and scraping them out in bad years to boost operating results. This helps to smooth a volatile earnings stream as well as make the company stock look appealing.
There have been corporate deception throughout history. A modern history case in point was Enron. At its peak, its shares were worth $90.75; when 2001 the firm declared bankruptcy, they were trading at $0.26. It remains a wonder how such a powerful business, at the time one of the largest companies in the United States could fall almost overnight. Yet more difficult to understand is how its leadership managed to fool regulators for so long with fake holdings and off-the-books accounting.
Yet deception in this age is even more troubling. With the rise in social media usage, smartphone penetration and multiplication of mobile apps, almost anything is possible right now. The unthinkable can be done by someone sitting at a remote location with only a mobile phone. Think about deep fakes for example. You may have seen a video of former American President Barack Obama calling President Trump a “complete dipshit”, or Mark Zuckerberg claims he has “total control of billions of people’s stolen data”. That’s deep fakes at work.
With deep fakes video, audio and photo of anybody can be made to say what they never said. According to the Washington Post, In January 2019, Fox affiliate KCPQ aired a deepfake of Trump during his Oval Office address, mocking his appearance and skin colour (and subsequently fired an employee found responsible for the video).
Deep fakes is an incredible technology that is fast gaining popularity. According to a Forbes report in November 2019, a U.K.-based energy firm’s CEO was scammed over the phone when he was ordered to transfer €220,000 into a Hungarian bank account by an individual who used audio deepfake technology to impersonate the voice of the firm’s parent company’s chief executive. With just deep fake a company’s reputation can be brought down in one day.
Business and investment decisions are built on trust. Many times this trust can take years of labour and investment to build. How useful then is the effort if all that can be made to go out of the window overnight? How do you compete in the age of increasing deception? How do you protect your company against deception and how can you see through the darkness of deception to a place of light and clarity in order to make effective decisions?
There may be no hard and fast rule to this as deception can come from anywhere, promoted by the most respected channels and targeted at anyone. However, by relying on the principles I will discuss here, you can improve your chances of making effective decisions every time even with the spread of deception.
● Factor deception in:
Deception would most likely happen, so it’s better to factor it in when competitive or even operational decision situations present themselves. Business is war. It’s a continuous effort to defend and protect your territory as well as advance into and take other territories. As competitive pressure and rivalry intensify, some forces in the competitive environment can exhibit anti-competitive tactics which may include deception. Remember, the best strategies are hidden, sometimes they involve showing illusion. It could include a well calculated attempt to lure you to a place of quick profit in order to distract you and weaken your position.
Bearing that in mind then, understand that not all that look good are good. Every opinion poll has to be double-checked even if it’s in your favour. Every award, every contract, every relationship and every increase in stock price may not be good and must be double-checked to be sure they are not a ploy designed to deceive. Everyone in the organization needs to be trained to understand that every opportunity to meet a goal may not be a good opportunity.
● Set up a special intelligence unit in your organization
While the CEO must function as the intelligent-in-chief, he needs a special unit or team dedicated to serving as intelligent officers. Trained to see beyond the ordinary, this unit works with every unit in the organization and must vet every relationship irrespective of how innocent those relationships may appear before the organisation can commit to it.
Besides, having a dedicated intelligent unit, the whole organization should be intelligent-conscious, knowing that nothing is as it appears any longer in the age of deception.
● Be a value-driven organisations
Nothing makes an organization more prone to deception than the lack of commitment to core values. We are confronted every day by bizarre stories of trusted names playing double standards. This includes governments of nations and corporate giants. Values are about meeting a basic standard of fair play and good conduct and the responsibility lies with business leaders to do a better job of creating the conditions that enable organizations not only to stay on the right side of the law but to do the right thing, always.
To do this, the leaders must commit to the organization’s sense of purpose, values, consciousness of the other people and the awareness of interdependence. Leaders must commit to leading by example and demonstrating trust in those they lead. Moreover, this focus needs to be a central part of how the organization runs, not just a periodic discussion only mentioned during training and periodic awards.
● Be a discerning executive
Leading from the heart rather than from the brain is a concept strong leaders understand and master. In a 1925 book, ‘The Man Nobody Knows’, American author, Bruce Barton, wrote ‘Many wealthy men have purchased newspapers with the idea of advancing their personal fortunes or bringing about some political action in which they have a private interest. Such newspapers almost invariably fail… The public has a sixth sense for detecting insincerity; they know instinctively when words ring true.”
Every manager must possess this ability in this age of deception. Everything may look right, all the figures might fit in, yet it may not feel right within. The manager may have to reject a business direction that makes ‘sense’ because it just doesn’t seem right. The bible said, there is a way that seems right but the end, therefore, are the ways of death. Discernment could be the most potent tool for competing in the age of deception even when every other tool fails.
Discernment, or, as Merriam-Webster puts it, the quality of being able to grasp and comprehend what is obscure, is a vital characteristic of successful CEOs. It allows them to truly see the root and heart of the situation, and to find an appropriate solution.
According to Hamariweb.com, discernment is the power or faculty of the mind by which it distinguishes one thing from another; the power of viewing differences in objects, and their relations and tendencies; penetrative and discriminate mental vision; acuteness. So it goes beyond guesswork and mental analysis. It is an ability one develops through meditation and listening to one’s inner mind. It is above all, learning to function by an inner clarity even when material evidence to the contrary exists.
Business Competition in the Age of Deception
Dr Brian Reuben, business consultant, researcher and keynote speaker has influenced business leaders globally. He holds business training regularly in Lagos, Dubai and London. He has trained and advised executives in several organizations including the Department of Petroleum Resources Nigeria, Energy Council United Kingdom, Trident Energy, United Kingdom, KGN TV South Africa, Africa Reinsurance Corporation, Globacom, Letshego MFB Botswana, Savile Energy Luxembourg among others.