Private Equity 201

Sometimes, in business, as in other parts of life, things are complicated.

A long time ago, I worked with a fellow that I liked and respected, who has gone on to have a spectacular career in the high technology industry. In an incident that he re-tells on his blog, he talks about the role of messaging in a high-tech software company.

As I remember it, he once told me that

Marketing is the art of telling the truth in the most positive possible way.

Although I'm not sure that he ever persuaded me to be comfortable with this sort of behavior, I came to respect him and what he does, quite a lot.

But there are other situations that can arise.

For example, you may find that you are working to "accelerate operational efficiencies":

One example of a same for less alternative is when a manufacturing company reduces its total personnel (and thereby personnel cost) while still producing the same volume of goods. This can e.g. be achieved through centralization, automation or optimization of working processes.

This, clearly, makes a certain amount of business sense. Profit is higher, after all. (Though it's definitely not so great for those people who make up the set by which the "company reduces its total personnel".)

Where it gets tricky is when you try to figure out how to talk about this with other people, such as your own employees, your company's customers, or the broader market as a whole.

One of the most horrifying phrases you may ever hear in the corporate environment is: "controlling the message."

When executives talk about controlling the message, they are talking about the delicate issue of trying to affect what those other people hear when the company says something.

You might think this is simple: just always tell the truth.

That's definitely an approach, but if people hear the truth, they might act on it, and they might do something you didn't want them to (they might not buy your product, or if they already have it, they might cancel their subscription, etc.).

Of course, they might also respect you for telling the truth, and reward you for it by being honest with you in turn.

But, anyway, there is an entire part of modern business that involves "controlling the message".

And there are real world situations where people who excel at controlling the message are rewarded with promotions, prestige, bonuses, raises, etc.

And there are other real world situations where people, perhaps because they come from backgrounds or cultures where controlling the message isn't a top priority, don't do such a good job of it.

And for those people, they may find that they are disciplined, not promoted.

And that's how a company culture is built.