Dishonesty Hurts People & Profits

Successful leaders are reliable leaders—both internally and externally.

While a leader with Internal Reliability is true to their own beliefs and principles, a leader with External Reliability is true to others. They earn the trust and respect of everyone around them because they tell the truth and always admit when they are wrong.

In a nutshell, these leaders are trustworthy and honest.

Honesty is important in any business. An article on describes three different types of honesty: honesty with others, honesty with self, and honesty about the experience. The first one—honesty with others—is a key characteristic of a leader with External Reliability.

Being honest with others means owning mistakes. It means being authentic and transparent. It means always following through on promises and making good on your word. And while it may not seem like honesty affects the business bottom line, it does. Proof of this impact lies in the absence of honesty — dishonesty.

A study done by MIT Sloan Management Review (“The Hidden Costs of Organizational Dishonesty”) examined the damage of dishonesty in the workplace, and found that lack of integrity, or untruthfulness, has some real repercussions on an organization’s bottom line. Lower trust, undermining of positive behavior, and a drop in job satisfaction are just some of the consequences that result from deceit. What does this mean? It means that when a leader is dishonest, it hurts everyone, and not just emotionally. Losing trust and reputation can mean losing business. Dissatisfied employees can mean loss of productivity and lower job retention. This brings us back to the Dale Carnegie Leadership Study, which shows that employees of a leader who lacks External Reliability (in other words, a dishonest leader) are four times more likely to be looking for another job. Dishonesty hurts—both people and profits.

In contrast, honest leaders bring out the best in their employees. They build a network of trustworthy business relationships. They encourage and increase open communication and positivity. They create engaged and productive employees. This makes it easier for everyone to work together to accomplish goals. That’s why it’s no coincidence that wildly successful companies like Target, Microsoft, and Ford Motor Company are on Forbes Magazine’s list of “World’s Most Ethical Companies.” There is a correlation between success and honest business practices.

Dale Carnegie believes that honesty is always the best policy, and that honest leaders are influencing the business world in a good way. It’s clear to see how honesty contributes to External Reliability; honest leaders are always true to others. At the end of the day these leaders have happy employees, higher profits, and the trust of everyone around them. Externally Reliable leaders get the job done—and that’s the honest truth!