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November 6, 2012
The Dismal Science
Truth in Business
by Adam Smith

The quest for truth is worthwhile and can be a lifelong pursuit. Socrates first pursued truth as it relates to the physical world and then delved into morality and moral truths. The Romans were great seekers of truth related to science and how it could help them construct building, roads, and aqueducts. They became great engineers.

The great religious reformers of the middle ages sought for truth which eventually led to the restoration of the gospel. President Hinkley wrote a book called Truth Restored.

Today the quest for truth is greater than it ever has been, and humans have resources in pursuit of truth that could not have been imagined in prior generations.

In the world of business, there are those seeking truth. Investors are constantly trying to determine the value of a company. Banks are trying to determine the credit worthiness of a potential creditor. When people are being interviewed, the organization doing the hiring is trying to determine if the person will do the job.

But within a corporation, it is amazing how some people never want to hear the truth about problems or issues.

A few examples from my work experience will provide enlightenment (truth) and hopefully amusement.

I worked for a company that really, really liked the quality program six sigma. This is a common program that many companies have adopted. The company I worked for initially used six sigma to help improve the quality of the products they manufactured, with great success. Then the company president came up with the great idea that every department all over the world would implement six sigma. This includes areas like human resources, accounting, and administration.

There were rules about how to implement the program, and you’d better do it right. The department I was in had about 20 people, and implementing and reporting six sigma statistics became part of my job. Over time it became a large part of my job. I started looking around and saw people all over my division who did nothing else but six sigma work.

I naively went to my boss and had the following conversation.

Me: If we did nothing else but stop using six sigma in departments where it does no good, we could save a lot of money.
Boss: I know, but we can’t do that.
Me: Why? It would be so easy!
Boss: If we stopped the program, corporate senior management would fire us.
Me: Can’t we just make the suggestion?
Boss: No, they would fire us for that as well.

Well, all right then. It may not be a surprise that while that company continues to make good products, they have a problem competing on price. Costs are too high.

At another company, a guy I worked with and I noticed that there were a couple of employees in another finance area that did not seem to do much work. So being the geeks we were, we created a chart on the back of the door of my office. The chart had two columns. One side was for one employee that never seemed to get to work on time. If the employee got to work by LUNCH we would mark yes, if not then we would mark no.

On the other side of the chart were yes and no columns for someone that was at work but ALWAYS seemed to be on the internet. If we happened to be walking by and the employee was on the internet we would mark yes; if she was doing something else (it did not even have to be work), we would mark no.

This provided us some amusement for a few months as the results reflected what we had suspected. The first employee got to work before lunch only about 20% of the time. The internet junkie was doing something besides being on the internet only about 10% of the time.

As fate would have it, I ended up accepting a position in that other department. One of my employees was a good, efficient worker. She came to work on time and had a lot to do while she was there. It is not surprising that she disliked working so hard while there were others that did so little.

I thought this was my chance. I would go to my boss, who was also over the two non-functioning employees, and voice the concerns of my employee. This gave me the opportunity to point out they were not working and maybe some reallocation of work was in order.

My boss was abrupt and short and told me she would look into the situation. Nothing happened except it was obvious that I was in trouble with my boss. She viewed it as though I was saying she was not doing her job (she wasn’t), and it took about a year for her to improve her attitude towards me.

I have many examples of this behavior. All of the examples just as ridiculous as the ones I related.

This lack of wanting to know the truth in business exists because there is something people do not want to do — admit a mistake.

When there is too much of this truth denial in a company at too high a management level, the viability of the company actually is becomes questionable. The profitability of the company lags or the company starts losing money. Finally, changes are made at the top of a company, the truth, as always, comes out about the issues facing the company, and then appropriate changes are made and hopefully the company can recover.

This cycle is a constant in the world of business.

For many employees it is easy to see the folly of management for companies where we work. Yet in our own lives, do we ever ignore the truth to keep from admitting to ourselves that we have made a mistake?

Truth does in fact always prevail. It is better that we are honest with ourselves and strive to improve. This is repentance and what has been asked of us.

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