It’s a trap, so be careful not to fall into it! You can be lured in by people you trust, and you can fall victim to it without even knowing it. This trap sometimes even snares the ones who set it.

The trap is hype. The dictionary defines hype as "exaggerated or false publicity." These days, almost everyone is guilty of hype, individuals and companies of all kinds and sizes. And people who believe the hype have been around since the earliest days. It seems to me that the first great modern hypester, P.T. Barnum, had some thoughts on the matter.

There’s a fine line between positive spin, or "presenting things in their best light," and hype. Within organizations, the former can be important in building support for programs, missions, and philosophies. A positive image is a way to rally the troops, build camaraderie, and create corporate culture. As long as it is not taken to an extreme, it can have a positive effect.

But when it crosses the line into hype, employees can begin to believe it to the exclusion of important facts to the contrary. Then it may be too late, especially if hype forms the basis for communication with clients or the public. Fact must always prevail over fiction, but that is easier said than done.

Advertising has been a part of our lives for years. Now it is there all day, every day. As we grow older we can develop internal BS detectors and become more immune to the extremes to which ads go. We learn to separate out the hype from the rest of the message.

Unfortunately, hype and advertising is spreading into other areas, and now occasionally gets mixed into news and other supposedly "factual" media. While our BS detectors may have become well attuned to the excesses of advertising, they are not always as good at discovering the hype in news items and press releases, which often gain credibility from their serious contexts.

Public relations firms have become very successful at placing company hype in the guise of news, and editors at newspapers and media outlets have often used this false news without questioning its source or objectivity.

A number of companies have recently been caught mismanaging their hype machines. Not too long ago Merrill Lynch announced a settlement with the State of New York related to public announcements that hyped certain stocks, while internal communications indicated that the firm’s analysts thought otherwise.

This is a perfect example of saying one thing publicly, but having an entirely different message behind closed doors. This practice helped line the pockets of those analysts, while members of the public took the losses. Unfortunately, the $100 million settlement is small change to an organization the size of Merrill Lynch, so we can’t expect it to have a serious deterrent effect.

Another example is the Rigas family, which controlled Adelphia, another organization that has been in the news recently. The company gained respect when it bought up cable systems several years ago and took on the role of gatekeeper by not allowing certain types of programming to be transmitted. This infuriated some customers who resented management’s imposing its moral standards on them. Others applauded the practice.

Now that we have learned that some of these gatekeeper deals were primarily for benefit of the Rigases, they appear totally hypocritical. But which is worse? In our free society, neither gatekeeping nor crooked deals should be tolerated. The family’s resignation from the company is probably the beginning of the demise of the company.

There are antidotes to the hype trap, but they are not easy. Let’s look at what companies can do:

• Every organization needs someone who is not afraid to stand up and say that the messages being delivered or considered are false, misleading, or out of context. Gadflies are often a fundamental part of an effective organization.

• Boards of directors should be consulted on the messages that are relayed to shareholders and the public. Independent board members may be able to stand up and shout "No!" Boards are becoming increasingly important in this regard, but probably not nearly enough.

Some protective measures for individuals:

• Careful reading of statistics, and an understanding of how they can be used to mislead, is essential. A great basic text on this is How to Lie with Statistics by Darrell Huff. Written in 1954, it is still in print and as useful today as it ever was.

• Press announcements that restate earnings or disclose changes in accounting practices (for example revenue recognition policies) may signal that the company has overhyped itself. They may also be an indication of poor general or financial management.

• A review of press releases over an extended period of time can yield clues to an organization’s true hype quotient. Extraordinary sales reports should be looked at carefully, especially in light of the aforementioned revenue recognition policies. Sales can be manufactured to fuel hype, but at some point reality must set in.

• Significant management turnover is frequently a strong indicator that something is amiss at a company.

Believing other people’s hype is a trap that is sometimes difficult to avoid. Most of all, we must avoid believing our own hype.

Marty Shindler is CEO of The Shindler Perspective, Inc., an organization specializing in providing a business perspective to creative, technology, and emerging companies. Marty may be reached at Marty@iShindler.com .

Copyright 2002 by Cinergetics, LLC. All rights reserved. Used by permission