Business Spin

It’s just like political spin, only different.

How could the chairman of Enron have been telling his employees they should buy the company’s stock at the same time he was selling it? How could Ken Lay have been saying that the company was in great shape when he had a report from one of his vice presidents saying it most definitely wasn’t?

Well, it might have been an innocent mistake. You don’t need to believe every report that crosses your desk. If some of your own actions had slipped your mind, you might find them as hard to believe as anyone else would. And you might be selling your stock for reasons other than concern that it might be about to tank.

So now that we’ve gotten the presumption of innocence out of the way, let’s consider two other possibilities. One is that he was lying. The other is that he was spinning. What’s the difference? It’s often said that there is none. (Come to think of it, I’ve said this myself.) But there is: Lying means flouting the truth. Spinning means indifference to the truth. The culture of spin is one in which the relation between what you’re saying and what happens to be true is a question that doesn’t even arise. This doesn’t make spin less objectionable. In fact, it’s more objectionable precisely because it’s culturally ingrained. We all know that it’s wrong to lie. The signals we send and receive about spin are very different.

The political equivalent of Ken Lay would be a politician who insisted he was going to win the election even though all the polls showed him heading for near-certain defeat. In the political world, though, spin is not merely tolerated: It is required. It is regarded as a basic test of competence.

RUSSERT: Senator, you’re down by 40 points in every poll. Your opponent is openly consulting realtors in Washington. Your own dog called a press conference yesterday to demand that you withdraw from the race. Are you going to lose?

POLITICIAN: No, Tim, it’ll be a tough fight—make no mistake about that—but I’m confident that … blah blah blah. And my cat is behind me 100 percent.

The purpose of such exchanges is not to elicit the truth, but to see how well the politician can spin. If he admits that he’s probably going to lose, he flunks. If he survives the barrage with his preposterous optimism and poker face unbroken, he wins.

But this example is entry-level spin. It shows a basic willingness to ignore reality, but no special effort or talent in creating an alternative reality. The other difference between lying and spinning is that while lying is often spontaneous, spinning usually involves advanced planning. There are a few naturally gifted improvisational spinners, such as the brilliant White House spokesman, Ari Fleischer. Characteristically, though, spin does not wing it. Often spin production is an industrial process involving many people, maybe or maybe not including the person who ultimately delivers it.

In recent years the Washington spin industry has invaded the corporate world as professional spinmeisters who learned their craft from politicians (or who actually used to be politicians) have come to realize that big companies are just as spinologically needy as politicians and have more money. Of course, the corporate world is where PR and advertising were invented—two activities that also strain the relationship between assertion and truth. But in some ways spin, or at least untruthful spin, remains less acceptable in the corporate world than in politics.

One reason for this is that in spinning a commercial product—which goes by the polite name of “marketing”—the mountain can come to Mohammed. That is, you can design the product around the spin rather than design the spin around the product. John Kenneth Galbraith argued 35 years ago in The New Industrial State that corporations often create the demand for their products, rather than satisfying hungers that already exist. Controversial at the time, this now seems obvious. And when marketing is paramount, the product itself is secondary. Oddly, this makes it easier for corporate spin to be truthful: You can decide what you want to say and build reality around it. Businesspeople used to marketing sometimes trip up when they forget that reality is less malleable in non-marketing situations.

Spin is also illegal in many corporate circumstances where it would be legal, acceptable, and even expected in politics. If a corporate insider knows something important about the company’s future, he or she not only may not say something that directly contradicts the truth—in most circumstances they may not even spin by silence. Imagine if politicians were under that kind of legal requirement! And why aren’t they? Well, obviously because money is at stake with the business executive whereas nothing depends on the politician’s truthfulness except democracy.

In the pervasive culture of spin, it’s possible that Ken Lay was describing a reality he wanted without even considering the relation of what he was saying to reality as we actually experience it. If so, his mistake was forgetting that he’s not a politician.