Lessons From Deceipt

The subject of lying has been widely studied over recent history. Aldert Vrij describes the common theoretical perspectives used to explain an individual's nonverbal behavior during deception:

• Emotions - deceivers feel guilty, therefore experience negative emotions that come out in negative comments, use general terms and not refer explicitly to themselves, talking in short, indirect, and evasive statements.
• Cognitive Effort - fabricating a lie is difficult, therefore if there is no time for preparation verbal statements will be very general, including fewer self-references and shorter statements, making the person sound implausible and non-immediate.
• Attempted Control - liars avoid producing statements that are self-incriminating (the content of deceptive statements is controlled) using non-speciffic language, fewer self-references, short statements with little detail, and more irrelevant information as a substitute for information that the deceiver does not want to provide.
• Lack of Embracement - liars appear to lack conviction because they feel uncomfortable when they lie, or they have not personally experienced the supposed claims, therefore use general terms, fewer self-references, and shorter answers.

A recently published paper by Stanford professors Larcker and Zakolyukina titled "Detecting Deceptive Discussions in Conference Calls" draws the results of researching 29,663 conference calls by business executives from 2003 to 2007.

Other than the common-man fun of reading of the behavioural glitches linked to deceipt, the research provides another pleasurable insight: CEOs and CFOs (the two characters undergoing study) lie in different ways. In terms of linguistic features of the narratives, both CEOs and CFOs use more references to general knowledge, fewer non-extreme positive emotions words, fewer shareholders value and value creation references. However:

• CEOs use fewer self-references, more third person plural and more impersonal pronouns, fewer ex- treme negative emotions words, more extreme positive emotions words, fewer certainty words and fewer hesitations.
• In contrast, CFOs do not use more extreme negative and extreme positive emotions words.

The profile of both jobs is quite different, and don't necesarily sit within the same aspiration ladder: a 1995 survey looked at the declining trend in the apetite for the big role within the CFO community (8% of CFOs sought a CEO role in 1995 vs. 52% in 1990). Also see this short article. This difference in lying could indeed host some truths about the character a leader and an expert are expected to play in front of a inquiring pannel, and this should hold true at all levels in the organisation.

It's an interesting insight indeed, but I hope (for the sanity of the research community) corporate investors manage a better ROI to the 29,663 conference call research effort.