Why the Truth Thins as Your Company Grows
They’re lying to you.
Not maliciously, not even consciously.
But they’re hiding things, softening them. They nudge reality just enough that the core meaning is lost by the time it reaches you.
Who are these miscreants? Your employees.
That’s the sad pattern as your company grows. Teams expand. Managers multiply. Then come the managers of managers.
And as headcount grows, the average employee’s motivation shifts.
In a small team, what’s good for the company is good for everyone in it. Success is shared, so utilitarian thinking reigns.
But pass 30 employees, then 100, then 1,000, and a canyon opens between the company’s performance and an individual’s benefit.
The result? The scale tips from all-for-the-company toward all-for-me. Employees are more motivated to protect their own positions than to improve the business.
Cynical? Perhaps. But not wrong.
We’ve all met the employee who is more concerned with their bonus, budget authority, or title than with the company’s profitability. Do you think that person delivers the unvarnished truth up the chain of command when bad news strikes?
And it’s not just the selfish; even good people don’t.
Softening reality is rational self-preservation.
What’s a minor embellishment? No one really gets hurt, and I look a little better in front of my boss. It’s not even a 1% shift from the truth.
Until everyone does it.
The Lies Live Below the Dashboard
You have data, dashboards full of metrics. But one layer beneath every metric sits a human ready to explain the why behind the number.
That’s where the lies live. “So far, so good.” “Nothing concerning.”
So what do you do?
You can’t treat every member of your team as a spy with secrets to extract. But you’re not going to fully overcome human nature, either.
Humans evolved to survive, not to deliver perfectly objective status reports. For 300,000 years, survival meant staying in the tribe at all costs. Or, as the case may be, staying in your startup.
You can’t expect people to be perfectly honest, but you can design systems that encourage them to be.
- Gather witnesses. One person’s story is information. Two is data. Three is a pattern.
- Foster psychological safety. I’ve written about this before. People tell the truth when they believe honesty won’t be punished. They hide when they don’t.
- Admit when you’re wrong. A subset of safety, but worth calling out on its own. Leaders who show their fallibility make it easier for others to show theirs.
But there’s one habit that’s more important than all the others: Be a diagnostician.
Becoming a Diagnostician
One CEO told me his head of revenue had delivered bad news.
“We’re going to miss the quarter.”
I asked why.
“We didn’t close as many deals as we expected.”
That’s not a diagnosis; that’s a symptom.
That’s not enough information, I told him. Then I asked if I could pose a few more questions.
- Did we generate the number of new leads we intended to?
- Were there enough ICP leads among them?
- Did we hit our conversion rate from lead to closed deal?
- Did we get the upsells we expected?
- Did we see the average sale price we anticipated?
My CEO got the point.
“We missed revenue” (or “We beat revenue,” for that matter) is not actionable. It’s like telling a doctor, “I don’t feel well.” The diagnosis can only begin with asking better questions.
Those questions serve another purpose: They expose the 1% lies. “We did OK on conversion.” “Upsells were roughly on track.” “Lead volume was just about where we needed it.” Each of these statements sounds harmless. Each is just slightly softer than reality—about 1% softer.
A 1% Difference
The Titanic was only about half a percent off her intended course when she struck the iceberg.
Half a percent. That’s all it takes.
The danger isn’t any individual lie. It’s that each layer believes it’s passing along essentially the same information it received. Along the way, people instinctively smooth rough edges and avoid conflict. But like a game of telephone or making a photocopy of a photocopy, each iteration — each tiny adjustment — degrades the information.
What starts as, “We’re going to miss the quarter because, despite having enough quality leads, we lost twice as many deals as expected to competitors we’d planned,” becomes, “We’re a little light this quarter.”
The message didn’t become false. It became harmless.
By the time it reaches you, you’re steering the company using a slightly incorrect map. Until one day, it isn’t so slight anymore.