More straight talking please

“Political language is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” — George Orwell

If there is one reason (and if you are an investor, I hope there will be more than one) to listen to the CIO Chair podcasts, it is to hear credible people straight talking.

There is irony that straight talking is a 'selling point', but it was an insight to me, that those who make big decisions speak more precisely than those who persuade others to make decisions. Success for CIOs is less about persuading people to choose A instead of B, where they can make a fee, but it is about delivering outcomes. In that way, it is like the surprising humility that sportspeople show. They do not need to tell you that training method X is better than Y, they are there to compete and their performance does the talking.

With 6 great CIO conversations (5 released and one being prepared for release) with my co-host Sean Thompson, the most striking theme is that those at the top of the investing tree speak with much balance.

The noisy certainties

We’re living through an attention war. There are two ways to win in an attention war: 1) be amazing or 2) be loud (including hacking algorithms to amplify your message). Given that choice, it is easier (and less risky) to be loud. Being loud requires constant posting, and occupying space in people's heads from frequency rather than credibility. The "cheat code" is to fake certainty, inflate claims beyond what the evidence justifies and make it actionable urgently or hack emotions other ways.

Throughout history, politicians have found it more profitable to fake confidence than deep thinking. There have always been a long supply of those peddling "solutions", whether it be lotions and potions (for example, beauty products and supplements) and half-baked investment ideas or policies.

The CV embellishments

Whilst we have culturally accommodated some 'salesmanship' into communication we are seeing sensationalisms in places where they were previously less common. Having been in London's Finance Industry for 25 years this August, it feels to me like CVs are suffering from claim inflation.

There has always been mild embellishment, but the language inflation is getting less credible. People were not self-employed, they were “Founder & CEO” of a one-person advisory firm. People don’t take time off for something difficult; they take a “strategic sabbatical”. A project doesn’t go well; it “delivers transformational impact”.

Having shared a journey recently with an academic, this sensationalism is being seen at the entrance to academia too.

The cost of spin

There are three costs:

1. It might appear phoney: When people spin things too positively, it does not engender trust. What else are they making a big deal of?

2. It could also come across as delusional: it appears that people who hugely overstate their accomplishments (e.g. Gary Stevenson) might just be so detached from reality that they really believe they were the 'best trader in the world'

3. It invokes a slippery slope of acceptable spin

The third, is the most systemically damaging. If everyone inflates, the honest person feels dull. This might encourage some sexed up language, or worse still outright fabrication is the only way to compete.

We’ve seen public examples where biography drift becomes a full-blown credibility event. In the UK, Rachel Reeves faced scrutiny around claims of having spent “the best part of a decade” at the Bank of England — with debate centred on what counts (and how it was presented).

On the global stage, Ferdinand Marcos Jr. in the Philippines was urged to stop claiming an University of Oxford degree after the university confirmed he did not complete one.

Sadly, parts of finance have joined the party. One giveaway is precision without provenance: quoting Sharpe ratios and correlations to two decimals on assets that aren’t correctly marked-to-market, as if modelled valuations have the same informational content as a traded price. Another is the confident use of words that are doing the job of evidence: “resilient”, “defensive” and “uncorrelated”. There are too many instances of claims like that in our industry.

What we want to aim for

This is where we head back to CIOs. Our conversations were had in language that maps cleanly to reality. It informs, not excites. It avoids inflation and theatre. Plainly, here is what we’re trying to do; here is what we think we know; here is what we know we don’t know; here is how we decide on imperfect information.

Where there are important consequences at hand, like policies, courts, committees and interviews we need to expect more straight-talking from one another.

More credibility tips

If you aspire to CIO communication skills here are some observations:

• Qualify statements. Don’t say “robust” — say "did not incur loss when subjected to a Global Financial crisis simulation on rating and price".

• Identify the conviction level. Fact vs inference vs opinion vs hunch vs rumour.

• What is simulated: If the number is a modelled backtest, say so.

• Assumptions before conclusions. Especially when presenting numbers.

• What would make you change your mind. “Here’s what would change my mind” is more credible than “Here’s why this is always the case”.

Straight talk is about being credible — and treating other people’s attention as something to be earnt, not hacked.

So what?

• Straight talk is not about being blunt or “brutally honest” it is about being accurate

• We should treat other people’s attention as something to be earned, not hacked

• In a decision-making environment, language is part of the control framework: it shapes what's important, what gets escalated and what can be ignored

• The first step to better outcomes is more precise wording — from politicians, from salespeople, from each other, and especially from ourselves

Our CIOs earn credibility the old-fashioned way: clear statements, explicit assumptions, honest uncertainty, and a willingness to be judged on results rather than rhetoric.

Next week, I will start a series on "What CIOs can teach about careers". As always get the blog delivered directly to your inbox on Home | Deciders | for mental fitness | change your mind.