WHAT IS STRATEGIC MISREPRESENTATION AND HOT AIR
Suppose you apply for your dream job. You buff your resumé to a shine. In the job interview, you highlight your achievements and abilities and gloss over weak points and setbacks. When they ask if you could boost sales by 30% while cutting costs by 30%, you reply in a calm voice: ‘Consider it done.’ Even though you are trembling inside and racking your brain about how the hell you are going to pull that off, you do and say whatever is necessary to get the job. You concentrate on wowing the interviewers; the details will follow. You know that if you give even semi-realistic answers, you’ll put yourself out of the race.
Imagine you are a journalist and have a great idea for a book. The issue is on everyone’s lips. You find a publisher who is willing to pay a nice advance. However, he needs to know your timeline. He removes his glasses and looks at you: ‘When can I expect the manuscript? Can you have it ready in six months?’ You gulp. You’ve never written a book in under three years. Your answer: ‘Consider it done.’ Of course you don’t want to lie, but you know that you won’t get the advance if you tell the truth. Once the contract is signed and the money is nestling in your bank account, you can always keep the publisher at bay for a while. You’re a writer; you’re great at making up stories!
The official term for such behaviour is strategic misrepresentation: the more at stake, the more exaggerated your assertions become. Strategic misrepresentation does not work everywhere. If your ophthalmologist promises five times in a row to give you perfect vision, but after each procedure you see worse than before, you will stop taking him seriously at some point. However, when unique attempts are involved, strategic misrepresentation is worth a try – in interviews, for example, as we saw above. A single company isn’t going to hire you several times. It’s either a yes or no.
Most vulnerable to strategic misrepresentation are mega-projects, where A) accountability is diffuse (for example, if the government that commissioned the project is no longer in power), B) many businesses are involved, leading to mutual finger-pointing, or C) the end date is a few years down the road.
No one knows more about large-scale projects than Oxford professor Bent Flyvbjerg. Why are cost and schedule overruns so frequent? Because it is not the best offer overall that wins; it is whichever one looks best on paper. Flyvbjerg calls this ‘reverse Darwinism’: whoever produces the most hot air will be rewarded with the project. However, is strategic misrepresentation simply brazen deceit? Yes and no. Are women who wear make-up frauds? Are men who lease Porsches to signal financial prowess liars? Yes and no. Objectively they are, but the deceit is socially acceptable, so we don’t get worked up about it. The same counts for strategic misrepresentation.
In many cases, strategic misrepresentation is harmless. However, for the things that matter, such as your health or future employees, you must be on your guard. So, if you are dealing with a person (a first-rate candidate, an author or an ophthalmologist), don’t go by what they claim; look at their past performance. When it comes to projects, consider the timeline, benefits and costs of similar projects, and grill anyone whose proposals are much more optimistic. Ask an accountant to pick apart the plans mercilessly. Add a clause into the contract that stipulates harsh financial penalties for cost and schedule overruns. And, as an added safety measure, have this money transferred to a secure escrow account.
The above article is from the book The Art of Thinking Clearly by Rolf Dobelli. The article is only for educational and informative purposes to explain and understand cognitive biases. It is a great book, definitely worth a read!