April 26, 2024 • 43 mins
When most investors think of due diligence, they think of sifting through years of financial statements and crunching numbers to better understand a company's potential. Not many people think about interrogating senior executives and employees, and asking the right questions to figure out whether they're telling the truth about the business model. In this episode, we speak with Phil 'Dick' Houston, a veteran CIA officer who's been called the human lie detector. Phil literally wrote the book on how to spot lies, and has been a long-time collaborator of entrepreneur and serial acquirer Brad Jacobs, helping him with due diligence on both senior hires and potential investments. In this episode, Phil explains his strategy for identifying deceptive behavior and how it can be applied to the corporate world.
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Episode Transcript
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Speaker 1 (00:10):
Hello, and welcome to another episode of the All Lots Podcast.
I'm Tracy Alloway.
Speaker 2 (00:15):
And I'm Joe Whysenthal.
Speaker 1 (00:16):
Joe, I'm kind of nervous about this episode.
Speaker 2 (00:19):
I am too.
Speaker 3 (00:21):
About fifteen minutes ago, the same thought flashed through my mind,
I too, am a little nervous about this episode.
Speaker 1 (00:27):
Believe it or not, we do some preparation for our episodes,
although maybe it doesn't always show this particular episode, I
haven't done a lot of reading into this topic, and
I'm really hoping the guest doesn't notice. But I think
my chances are very low because we are literally going
to be speaking to someone whose whole career is about
(00:50):
basically spotting lies.
Speaker 3 (00:52):
I mean that's essential. Like in the business world, if
you really think about it, you know, companies come on
their calls. I think they don't typically lie per se.
I don't think executives lie that much, but you know,
they shade the truth. They highlight some things, they don't
highlight the other things. I feel like it would be
a pretty good skill to have in life to just
generally and especially in business, to just generally know whether
(01:14):
someone is being honest with you or not.
Speaker 1 (01:16):
Absolutely, it feels like a sort of module they should
have at Wharton if you're doing a business degree in
an MBA.
Speaker 2 (01:21):
That I've never seen in an MBA program.
Speaker 1 (01:24):
Well, the person we're going to be speaking to actually
came to us via Brad Jacobs. You might remember him
from the episode in which he was talking about his
latest acquisition and the new part of his logistics empire.
And he's written a new book and we were reading
it and one of the things that we thought was
really interesting was there was a mention that he was
(01:47):
working with a man called Dick or Phil Houston, an
ex CIA person who was basically a polygraph examiner for
a long time, and Brad and Phil were working together
as part of the due diligence process for Brad's many, many,
many serial acquisitions. So the idea was he might go
(02:09):
in and buy a company and then Phil would interview
some of the senior execs and basically try to see
whether or not what they were saying about the company
was true.
Speaker 3 (02:18):
Right, you know, speak of nice skills to have. There's
always that information asymmetry, whether you're just an investor or
whether you're buying out a whole company, and you know,
the seller is always going to know more. Sort of
classic problem in economics. But if you knew the result
of an answer is going to be one hundred percent true,
then that would be pretty great.
Speaker 2 (02:35):
So that would be nice.
Speaker 1 (02:37):
What's that TV show with the Girl who Can Spot
a Love?
Speaker 2 (02:40):
Oh? Oh, poker face? Poker face pretty?
Speaker 3 (02:43):
Yes, it's pretty. It's kind of entertaining. It's kind of
like it's it's fun.
Speaker 1 (02:47):
It's a fun It does seem like a useful scar too.
Speaker 2 (02:49):
Yeah.
Speaker 1 (02:50):
By the way, another reason I'm slightly terrified of this
episode is I used to know an XCIA person who
then went into another profession. I don't want to give
too much way, but it was finance related, so I
used to speak to him about financial things. And I
remember I met him once for lunch after a particularly
(03:10):
terrible mourning where something really really bad had happened in
my professional life. And I sat down and I was like, Hi,
how are you. How's it going? I can't wait to
have lunch. We're going to talk about capital markets or whatever.
And he immediately leaned forward and was like, Tracy, tell
me what's wrong. Something bad happened. And I asked him
how he knew, and he was like, oh, you got
this like little crease in the middle of your forehead.
(03:32):
And this wasn't you know, this was like a casual
source meeting. This wasn't someone I knew really really well,
but he knew he knew that I was upset. Anyway,
So on that note, very very pleased to say that
we are going to be speaking to Phil Houston. He
is a career CIA officer and also the author of
the book Spy the Lie. Former CIA officers teach you
(03:55):
how to detect deception, so we're going to learn how
to spot the bi Phil, thank you so much for
joining all thoughts.
Speaker 4 (04:03):
Tracy, thanks a ton for having me.
Speaker 1 (04:05):
So just to begin with, how do you become a
lie detection expert? What is this career path?
Speaker 4 (04:11):
When I joined the agency fairly early on, I was
called over to the head of polygraph in the agency
and they had spotted the fact that I had developed
a lot of information doing background investigations and they thought
that I would be a very good candidate for such
(04:34):
a position.
Speaker 3 (04:34):
There's so much to get into. Tracy mentioned that we
came across you talking to former guest Brad Jacobs, who
you apparently have worked with a lot. How do you
deploy LIE detection skills in the corporate context.
Speaker 4 (04:48):
Well, we use them in every single day. It's not
just in a regimen of due diligence protocol. We're looking
day in and day out. It's continuous of value, especially
with new companies that Brad acquires, because we never know
(05:08):
if we've missed something in the due diligence process, so
we're always paying attention. And Brad has been highly trained
now by us and my team in the lie detection
model that I developed when I was at the agency.
Speaker 1 (05:24):
What kind of things are you looking out for specifically?
So you know, if Brad says he wants to buy
a company, I'm sure he gets lots of information like
printed information as part of the due diligence process, and
then he has interviews with senior executives. What type of
questions would you be asking them.
Speaker 4 (05:43):
There are multiple areas of probing that we do. Number
one is first and foremost, is are there any problems
or circumstances associated with the acquisition that are not a
matter of record that no vera one has come forth
and said, hey, this is a problem or might be
(06:04):
a problem going forward. And so to gather that information
Usually the first encounter is with a management meeting, where
we sit down in front of management and ask them questions. Now, granted,
the topics are fairly traditional, but the way that we
(06:25):
word questions sometimes are very different. For example, on the
really key issues, we rarely will ask a did you
or do you so? For example, we won't say do
you have any concerns in this area? We use what
we call presumptive questions. And a presumptive question might sound
(06:47):
simply like what concerns do you have in this area?
It presumes that there's potential for a concern. The beauty
of that type of a question is that if a
person is telling the truth, it's still a very easy
and fair question to answer. However, if a person is
(07:08):
concealing something and we ask it presumptively, it generally and
often plants what we call a mind virus. The mind
virus is that thing that we've all been victims of.
It's when you know, somebody walks in the door in
the morning and their coworker comes running up and says,
(07:28):
you know, Joe, the boss wants to see you, and
you say, well, what's that about, and you know, they say,
I don't know but but right away and as Joe's
walking down there, is he likely thinking more, Geez is
going to be a great day, I'm going to get
a bonus, I'm going to get a promotion. Or does
he immediately start thinking what's wrong? Or is there a problem?
(07:49):
And if it is, then he's inventorying mentally what the
problems might be and how he's going to deal with that.
That mind virus triggers if someone's lying, it often triggers
the exhibition of deceptive behaviors, both verbal and nonverbal behaviors.
Speaker 3 (08:10):
I already love this conversation so much, but let's continue
to pursue. I imagine that when you're doing due diligence
on a company, you know it's the unknown unknowns, it's
the things that aren't written down. But you don't even
know the right question to ask because it's not written down.
But as you say the presumptive approach, talk to us
about like, okay, take the example further with a question
(08:32):
like that, what are the types of responses that would
say trigger warning lights of either it's verbally or physically,
this looks.
Speaker 2 (08:39):
Like a lie?
Speaker 3 (08:40):
Like what might be gleaned in the response and to
such a question, sure.
Speaker 4 (08:46):
In working with Brad, we've had all kinds of when
people are lying, all kinds of crazy responses. We've had
responses where we've said or made just simply the statement
listen in describing our diligence, we are also going to to,
you know, come in and take a look at your accounting,
and the person immediately says, oh, there's no need to
do that. And you'd think that they would realize how
(09:08):
obvious that that dodge is the spot, But at the
moment they're on the spot and they need it out,
and so they're not realizing the kinds of responses they give.
They'll also say, well, why do you need to go there?
Or why are you asking that? Or how much do
you need to know? Or here's what I can tell you.
(09:30):
And that's an interesting statement we hear and we listen for,
because if you think of the literal interpretation of that
statement here's what I can tell you, it immediately in
our world conjures up. What can't you tell us?
Speaker 1 (09:45):
Do people try to deflect? Having interviewed many people on
this podcast, the most problematic response that we tend to get,
hopefully not outright lies at least not often, but you
ask a question and someone will say, oh, that's very
very interesting. Now let me talk about this entirely different
point that has nothing to do with what you just asked.
Speaker 4 (10:05):
That could be a product of their media training, but
it also could be if it's accompanied by other deceptive behaviors.
And if we talk a little bit later about the
model for detecting deception, clusters are an important component of
that model. So more than just one deceptive behavior in
(10:27):
response to a stimulus, meaning a question or a statement,
that's what gets our attention. And so when they start
that deflection, deceptive people know that they can't just sit
there like the proverbial bump on a log and say nothing.
They have to say something. And so what they often
(10:47):
do is we'll try to lead us as stray by
talking about something they can comfortably talk about that you
might be interested to you and perhaps even a suage.
You know, what concerns they think you might have.
Speaker 1 (11:00):
Are lies in the business world different or do they
exhibit different qualities to lies outside of the business world.
So I guess in criminal activity or maybe in intelligence gathering,
going back to your career at the CIA, are there
differences in the way those lies benifest.
Speaker 4 (11:19):
The primary difference is tracy are the topics, but in reality,
the lying the behaviors remain the same. They're intrinsic to
human nature, and we have a very specific list of
behaviors that we are looking for. The biggest problem in
(11:42):
spotting lies if people are not trained, is when they
see something odd that happens, or something different or uncomfortable,
their instincts may kick in, but they might not recognize
what's going on, and they're only guessing at that point
as to whether they've just heard a line or not.
Speaker 3 (12:17):
Why do we back up and talk about the framework
or the model that you first developed at the CIA.
I imagined that over the years it's been refined more
examples and you get better and better at applying it.
Why don't you just sort of just bring us back to, like,
what are the core, like underpinnings of your approach.
Speaker 4 (12:33):
The core is that we have codified the behaviors, so
meaning that we've picked the behaviors that we know through
research and anecdotal evidence are the most reliable indicators. What
we learned in the early days is that many of
the traditional behaviors that we thought were good were not
(12:56):
and for example, take an eye contact for exams. Eye
contact is not nearly as reliable as people would think
it to be. Fact.
Speaker 2 (13:08):
Yeah, now, both me and Tracy a big relief on that.
Speaker 4 (13:11):
Yeah yeah. Eye contact can be very different, especially in
different cultures, in different regions. I'm here in New York City.
You know, if I were to walk down the street,
you know and smiling and saying hi to people and
so forth, that wouldn't look very good, right, or it
probably wouldn't go over very well. But in the little
(13:31):
town where I live in the reverse would be true.
If I if I didn't smile, or if I didn't
you know, nod, or even you know, verbally greet someone,
they'll walk away with a different opinion. And so the
eye contact piece is just simply not as reliable as
we need it to be. The anecdotal evidence in our
world uh supports that, as as well as some major
(13:54):
research studies. Two in particular, one in the US and
one in London, strongly suggests that the deceptive person often
has better eye contact than the truthful person does, highly
likely because they're forcing it.
Speaker 2 (14:10):
You know.
Speaker 1 (14:10):
Earlier I was using the term bs and lie sort
of interchangeably, but they're not exactly the same thing. And
in the business world, one thing that tends to happen
is you have people telling a good story about their business,
and the story, you know, it might even be true.
That might be the way particularly ambitious executive sees things unfolding.
(14:35):
I guess what I'm getting at is, how do you
tell the difference between an outright lie saying something fraudulent
about their business versus someone who's like trying to sell
the optimistic best case scenario story.
Speaker 4 (14:50):
Okay, first of all, let me go back to the
model itself. In the model, we're monitoring both their verbal
behavior or what's commonly been refined to a body language,
and we're also monitoring their nonverbal behavior. What I said earlier,
we're monitoring their verbal behavior is what they say. The
(15:10):
nonverbal is obviously what they don't say. And those both happened,
you know, often simultaneously or or in conjunction with a
single response to a particular stimulus, and we're picking up
on both of those. Now, what are we picking up?
All of the behaviors that we use fit into five
(15:32):
psychological buckets. The first bucket is the evasion bucket. Okay,
these are These are behaviors such as, you know, failing
to answer the question or qualifying the question. They're not
giving you some or all of what you want from them.
The second one is this persuasion bucket. And this is
(15:55):
kind of tracy where you were leading to if I
if I heard you correctly, where someone's trying to tell
you something positive or good because they can't tell you
the truth because the truth has consequences to it, so
they start using convincing statements, Oh, we would never do that.
We're a great company, we've been around forever, We've got
(16:17):
the best team in the industry. And they're trying to
convince you that you don't have to worry about, you know,
whatever it is or whatever topic that you surface to them.
The third behavior is aggression behavior, sometimes referred to as
attack behavior. Sometimes it's very visibly or visible, other times
(16:39):
it's more nuanced. So for example, you ask someone a
question and they say why are you asking that? And
or sometimes they say why are you asking me that?
You guys always ask these things. I've gone from you know,
to five different banks today, and it seems like every
single person has this has fixated on this issue, and
(17:01):
so forth. They're trying to get you to back off.
The fourth behavior is what we call manipulation. This is
where they're manipulating the circumstances of the interaction to their favor.
A good example of that is when you ask them
a question and they repeat your question. Now, you might say, well, geez,
(17:22):
what value does that bring to them? Well, the value
is that we think about ten times faster than we talk,
So in that second or two to repeat the question
could equate to twenty seconds of material to say or
strategy to pursue, and that's how they stay up with it.
Speaker 1 (17:44):
That was good media training, right. If you need to
buy yourself a little bit of time to formulate the
thoughts in your head, you repeat the question or say
something nonscript what a great point, Joe, thank you so
much for bringing that up.
Speaker 4 (17:57):
A non answer statement is another one in the manipulation bucket,
and for the same purposes, it's buying time. The fifth
and final bucket is the reaction bucket, and this is
again the body language when people respond either as a
result of the fight, flight or freeze response, or there
(18:19):
are a couple of other things that aren't caused necessarily
by that response. For example, something we call a verbal
nonverbal disconnect, where you ask someone a question and they're
saying no, I wouldn't do that, and at the same
time they're nodding their head yes in response to the question.
You see that kind of thing. But the other big one,
(18:41):
two big ones in the reaction bucket are when people
have anchor point movements in response to something you ask
them or see them. I remember, early in the early
days when I first started working in the investment world
at a hedge fund, and I was sitting there with
the hedge fund manager interviewing a management team, and I
(19:02):
remember he asked someone a very direct question about what
the street was saying was a problem, and the moment
he started answering the question, he reached across the table
and started making huge sweeping gestures on the table. And
we call those grooming gestures or anchor point movements. And
(19:23):
it can be as simple as a swivel in the chair,
a leaning forward after answering, or in the midstore or
in preparation for answering your question leaning backwards.
Speaker 3 (19:35):
In the case of the sweeping of the table that
they has, what is the respondent doing there implicitly or
why is that what makes that a tell or a edwy.
Speaker 4 (19:46):
From a psychological standpoint, what he's doing is cleaning up
the surroundings. He in his mind, is making life better
at that moment, because right now life's terrible because he
doesn't have a great answer to the question. And that example,
by the way, the company went under a few weeks
later for the exact issue that he was doing. That's sweeping. Now,
(20:08):
we don't rely on any one of these behaviors in
response to the question. We're looking for a cluster two
or more deceptive indicators will tell us immediately that we
have more work to do. More work simply means not
that we're leaping to judgment, but that we're going to
ask more questions, We're going to follow up, or we're
(20:31):
going to talk to somebody else once they leave whatever,
or do research whatever. More work means. But the beauty
of it is is that we don't get snookered, so
to speak.
Speaker 1 (20:44):
How often do you get false positives where you're interviewing
someone and you think this person is lying or there
are some bread flags here to suggest that maybe he's
not being one hundred percent truthful, and then you go
out you do additional info gathering as you were just describe,
and you find out, actually, maybe he's just a weird
guy or socially awkward or something like that.
Speaker 2 (21:05):
Sure, Sure, he just likes to straighten up the table.
Speaker 4 (21:07):
Yeah, very meticulous individual. More often than not not likely
to see. But if we're going to see one, it's
likely going to be in a situation where we're dealing
with multiple issues. So, for example, for Bradford years, we've
done a ton of employment pre employment screening, especially for
(21:28):
the senior executives, and there may be more than one
lie or more than one problem that they're worried about,
but because of something called psychological set, it means that
they have a fixation or fear on one particular area
of deception and they're not nearly as worried as much
(21:49):
about the other areas, And so most of their behavior
comes out on that particular issue that they're worried about,
and as a result, we may miss you know, which
would be a false negative. But if our bias has
the pitchfork effect, in other words, we're thinking, oh, that
this guy's not telling the truth about anything, then we're
(22:11):
starting to see false positives, and it happens I.
Speaker 3 (22:14):
Mean, I know you mentioned that eye contact is not
as robust as maybe people imagine in popular belief. But
I'm curiously in a world where more and more is
done zoom digitally, et cetera. Have you had to update
your tactics at all our approach? Can you talk a
little bit about lie detection in the pre and post
(22:35):
zoom era.
Speaker 4 (22:36):
Sure. We always, if we can, want to be doing
the interaction in person and in particular when we're there,
whether we can do it overtly or even covertly, we
want to head to toe observance of them as we're
talking to them, because the behavior can leak out anywhere.
For example, you know, we know that the feet are
(22:59):
always an anchor point, and if the fight or flight
response kicks in, it will often go to the feet first,
because that's our primary anchor point in life, and that's
what gets us out of trouble, that's the escape mode
and so forth. So we want to be able to
see those In the zoom we lose a lot. We
(23:21):
lose at least fifty percent of the reaction bucket, and
so we rely very heavily then or more heavily even
on the other four buckets, because those are all almost
completely related to the verbal activity.
Speaker 1 (23:36):
What about eye contact in zoom, because I will admit
I have a hard time focusing my eyes on zoom calls,
partially because I don't want to look at the screen
and see myself when I'm talking. It's just very awkward,
so I sort of look off in the distance.
Speaker 4 (23:49):
Does that mean anything, No, Tracy, there are people that
will tell you the opposite, But our research and again
the anecdotal evidence, and a lot of your taxpayers he
has gone to, you know, to invalidate some of that.
When you're on zoom, one of the biggest problems you
have both as the interviewer, if you're the person asking
(24:10):
the questions, or you know, if it's just a conversation,
one or the other is likely to experience what we
call mental drift, where when you're sitting there, you have
all kinds of distractors that are drawing your attention, whether
it's an email that pops up or a dialogue box
that pops up, whatever the case may be, or someone
(24:34):
sticks their head in the door or a sound outside
or whatever. It's so easy to become distracted, and it
happens a lot and so we have to be very
careful with, you know, using eye contact as a lie behavior,
so to speak.
Speaker 3 (24:50):
So in the CIA context, obviously a lot of people
engaged in intelligence gathering, it's good to.
Speaker 2 (24:55):
Know if someone is being honest or not.
Speaker 3 (24:57):
But I also have to imagine that in the CIA
content there are a handful of people for whom the
ability to lie is actually a valuable skill, including save
people who are going undercover in some situation which case
deception is actually.
Speaker 2 (25:09):
Part of the job.
Speaker 3 (25:10):
Can we learn to be better liars? Can we learn
to identify our own leaks and tells and behaviors and
sweeps and anchors and pivots so that we come off
more trustworthy than we should be in some situations.
Speaker 4 (25:23):
Most of the time, when people try to avoid light detection,
they're doing two things. Number one is they're trying not
to do things that everyone believes is obviously a deceptive behavior.
The second is they try to do things that and
(25:44):
focus on things that mask or carve out the other
behaviors that sound better, so to speak. And we know
that because once we develop this methodology in the CI
was the principal developer of both the model and the training,
we started training federal law enforcement, and they loved the
(26:07):
training we in fact did years ago before Homeland Security
with the US Customs down at the southern California border.
We did a lot of training for them, and they
actually did a study, a little mini study, to see
how well this worked, and it showed that their agents
were much much more better skilled at spotting who has
(26:30):
the contraband versus who doesn't.
Speaker 1 (26:47):
I mentioned in the intro that we hadn't done much
prep for this particular conversation. That was in fact a lie,
because I've done a little bit of prep. But one
of the things I saw that I thought was really
interesting was a bit where you were talking about cognitive
dissonance and how that feeds into asking the right questions
or interrogation techniques. And you are basically suggesting that someone
(27:10):
who is lying or misrepresenting the facts is dealing with
cognitive dissonance because more likely than not, they still think
of themselves as a good person even though they've done
or are doing a bad thing. And so the idea
is to allow them space to sort of deal or
sort through that cognitive dissonance out loud to you and
(27:33):
provide a narrative that explains their behavior. Is that a
useful technique in business as well, like the idea of
just providing people space to try to walk through their
mindset at a particular time.
Speaker 4 (27:47):
If you really want them to be truthful with you, your
demeanor is very important, number one. Number two, you need
to present yourself as doing your job, whatever your job.
If you're an investment analyst, you know, for example, if
you simply you know, present the questions or the opening monologue,
(28:11):
you know, to the meeting, saying hey, listen, you know,
let me just say up front, we're really interested in
you guys, but I really need to ask some direct questions,
so please if I don't mean to offend you or
anything of that nature. And then you lower their guard
a little bit. And it's amazing. Just simply opening up
the conversation that way and then presenting your question in
(28:34):
a non threatening manner, you can begin to get people
to open up. There is another methodology that we use
if and when we think that someone is lying and
we have the green light from the client to use
that methodology, and it is much different than what you
(28:57):
would think of as interrogation. It's a persuasion technique that
is enormously effective, and sometimes you get the whole story.
Most of the time, though you get at least more
than they'd given up at that particular point.
Speaker 3 (29:11):
Could you explain that a little bit further? What's this
approach about?
Speaker 4 (29:14):
Sure? I once had a hat in my office It said,
if your lips are moving, you're lying, okay, And in reality,
if I think the person's lying, I want to go
for a period of time where their lips are not moving.
I want to be the one talking to them, and
I'm going to be not saying random things. I'm going
(29:37):
to be using very selective influence techniques that will help
me make it easier in their mind at that moment
to fess up. And we've used these techniques on spies,
on criminals, on double agents. I know I have three
(29:59):
confess essions from double agents in my career at the agency,
and to get a confession from a double agent is
like solving the most major crime you can you know
you can solve, so to speak, in our world.
Speaker 2 (30:13):
So what does that sound like?
Speaker 4 (30:14):
Like?
Speaker 3 (30:14):
How do you like what are some of the things
you say?
Speaker 4 (30:16):
Yeah?
Speaker 1 (30:16):
Do they actually admit it? Do they go like, oh
you got me, I'm a double agent, but.
Speaker 3 (30:20):
Like yeah, and how like what are the things you
say to like put them in that framework.
Speaker 4 (30:23):
Like that that is is a longer monologue, so to speak,
if you will. And so you know, if you think
about the interview and interaction, it's a dialogue. And so
when we go in the monologue mode, we're in the
in that direct elicitation mode. And it sounds very low key,
so different than what you see in the movies where
(30:46):
somebody starts, you know, the conversation by yelling, you know,
screaming you better tell me or you know, we're gonna
and they list a series of consequences. We do the reverse.
We lower our voice, we start talking. We start telling
them reasons why people have done this and that we
(31:08):
understand those reasons. So there are just a lot of
different categories of things that we can say and do
that make it easier and over time to talk about it.
And often it doesn't come out as the big confession.
It often comes out as an admission about something related
(31:31):
to it. And then we take that admission and it's
like a thread or perhaps peeling the onion to use
another metaphor, and you start just peeling or tugging and
you begin to get the information.
Speaker 1 (31:46):
That reminds me, actually this is a little bit media
naval gaisy. But Joe and I have talked about this before,
but every once in a while we will get comments
saying like, Oh, I wish you'd pushed back on this
point a little bit more in the interviewer. Why didn't
you press them on this particular point. And it feels
like people have an idea in their heads that like,
(32:09):
if you just ask the right question enough times, eventually
you'll get that kind of gotcha moment from the interviewee
and they'll just throw their hands up and say like, oh,
you're right, I'm completely wrong, blah blah blah blah. But
that hardly ever happens in my experience, Like even the
best interviewers in the world, it's difficult to elicit that
(32:31):
particular reaction because everyone is so on guard for that
like major admission. So it's interesting that you sort of
you go for the smaller admissions that maybe are tangential
to that, and then try to pull those threats.
Speaker 4 (32:44):
In some cases yes, in some cases no, we're reading
them very closely as we're talking to them. If we
think that they're prone to confessing the you know, yes
I killed them, or yes I we cook the books,
or yes we did this, then we'll go for that.
But if it's clear that they're being cagey and they're
(33:07):
trying to dance around the issues and so forth, then
we'll go for much smaller chunks of information. And it's
very effective. And keep in mind the more questions you
ask someone a human being. But we know from the
behavioralist is that every time a person lies, their resistance doubles.
(33:30):
So if you were keeping score and you were lying
to me and I said, Tracy, did you do it?
And you say no, you get two points for your answer,
but I only get one for my question. And then
I ask it again in some other other way, and
now the score is four to two, and then eight
to three, and so on and so forth.
Speaker 1 (33:51):
I'm sort of building up a wall.
Speaker 4 (33:52):
I guess exactly. That's a great analogy, you're great metaphor.
Speaker 2 (33:56):
Does everyone lie?
Speaker 4 (33:58):
The research set as that in the western world, meaning
in the in the Western hemisphere, that the average person
lies at least ten times every day. Now, now they
include in those lies, you know, in the metrics for
that research, they include what we call you know, the
(34:19):
white lies. I like to call them the smart lies.
If I go home from this trip and my wife
has a new hairdo and I and my immediate thought
is yikes, and she goes, hey, honey, how do you
like my you know, my hairdew, I'm definitely not going
to say yikes, but I'm going to try to soften
the blow, you know, at a minimum. And if I
(34:41):
can get away with all, that's nice. And then you
know she'll she'll pick up on something. She worked for
the agency as.
Speaker 2 (34:48):
Well, So it's got to be Yeah, that's so easy.
Speaker 4 (34:51):
It's a two hit short. You're going to be very
very careful.
Speaker 1 (34:53):
Wow, communication in your household must be both excellent and
at times fraud but phil At times. You have been
described as the human polygraph. I think, can we play
a little game, a little live spotting?
Speaker 4 (35:08):
You can, but I will tell you up front that
what causes deceptive behaviors is the fear of detection, and
so parler games, it's difficult, if not impossible, to spot
the deception because the person doesn't have any fear. The
game is and they know and they know how the
(35:29):
path to win it.
Speaker 1 (35:30):
Oh, maybe it's not a good idea.
Speaker 3 (35:32):
Though, I want to know what your lie was going
to be, Tracy, I'll give it a shot as well.
Speaker 1 (35:35):
And okay, all right, Three things. Number One, I went
on vacation to Brazil and it is my favorite place
in the world. Number two, I have a corky named Pablo.
He just turned four. Number three, I want saying karaoke
with sir Ian McKellen.
Speaker 2 (35:53):
I think I know the answer.
Speaker 1 (35:54):
I think you might know something because I just like
of enough, like you're.
Speaker 4 (35:58):
You're you're exhibiting almost zero deceptive behavior. So I if
I were forced, I would have picked number one.
Speaker 3 (36:06):
Oh that's right, that's right, that's right. That was there
something at all in the way.
Speaker 4 (36:11):
She said that absolutely, she she went to the persuasion bucket.
To the others, she didn't there was nothing persuasively.
Speaker 3 (36:19):
Wait, what did she say?
Speaker 2 (36:20):
How did she phrase?
Speaker 4 (36:21):
She said? That was? She says, I went on vacation
to Brazil and that's my favorite place in the whole world.
Speaker 1 (36:27):
I emphasized it, and I don't normally emphasize words.
Speaker 3 (36:31):
That's really good. That was really good because like I
knew it because I had heard you talk about karaoke
and I know your dog, so I just knew it, Brazil,
but I did not pick up on your embellishment of
that fact.
Speaker 1 (36:42):
So this is I swear, this is such a frightening
episode for people who talk for a living.
Speaker 3 (36:48):
Do polygraphs work. You mentioned you're the human polygraph but
where do we stand the conventional wisdom on actual.
Speaker 4 (36:53):
Polygraphs in the in the hands of a well trained polygrapher,
they're incredible.
Speaker 1 (37:00):
Oh really, yeah, Maybe just to boil it all down,
what is your top tip for spotting lies in the
business world?
Speaker 4 (37:09):
At a minimum, pay attention to the evasion bucket. So
whether it's in a pre employment interview you're doing, whether
it's in an m and A situation, whether it's in
an employee malfeason situation, if they don't answer your question,
and if they don't answer it entirely, don't think of
(37:32):
yourself as a human light detector, but take that as
a catalyst for doing more work. I give you a
great example. I remember interviewing a very senior executive candidate
at a Fortune two hundred company, and they love this guy.
Everybody had interviewed him, they loved him. And when I
(37:55):
interviewed him after the one hour interview, I walked back
out into the CEO's office. They said what did you think?
And I said, well, he's got a lot going for him.
But the problem I'm concerned about is he's been either
fired or separated involuntarily from his last five jobs.
Speaker 1 (38:13):
How did you know that?
Speaker 4 (38:14):
Because when I ask him the first time, I asked
the normal questions, but then I ask a question that
no one typically asks. So somebody comes in and says, oh,
we had a restructuring and you know I was thinking
about maybe changing jobs. So I put up my hand
and said, I you know, hey, I'll be glad to
(38:37):
take one of those or whatever and so, and people say, okay,
that makes sense. We hear a lot of people that
do that, but they fail to ask the simple question,
could you have stayed if you wanted to? Wow?
Speaker 3 (38:51):
I just have one more small question, out of curiosity,
have you or anyone approached you or is there any
work on AI machine learning of pro just to lie detection?
If you have all these video of interrogations and texts
and documents other is there any work being done on
that approach?
Speaker 4 (39:08):
Joe, I'm so glad you asked. We are working on
it furiously and we've already had some success and we're
making great progress.
Speaker 1 (39:17):
Exciting stuff, all right, Phil Houston, thank you so much
for coming on all thoughts and telling us how to
spy the lie. I appreciate it.
Speaker 4 (39:25):
Thank you guys. It's been fun.
Speaker 2 (39:26):
That was really fun. Thank you so fun.
Speaker 1 (39:28):
Yeah, it was terrifying and fun. Joe, that was really fun.
Speaker 3 (39:45):
I was super impressed that he caught your lie. I know,
especially because, as you said, you don't make sense that
parlor games when the stakes aren't really there, that you're
not going to have that same response, but that he
caught that embellishment your first question and flagged it.
Speaker 1 (39:59):
And it's definitely going to make me think about what
words I'm emphasizing you.
Speaker 3 (40:04):
Didn't mean to like at that point, right, No, Like
you didn't think I'm going to give a little clue
here on this one right now. No, I s not
voluntarily offered up a clue that, like you did not
intend to.
Speaker 1 (40:15):
Yeah, I mean I tried to make them like fairly neutral.
Obviously you have to say something, but I was trying
to make each of them like roughly similar to the others.
But he absolutely nailed it. No, I thought that entire
conversation was really interesting, especially given that our day jobs
is to interview people, and the idea of like, maybe
you don't seek out the big admission if people are
(40:38):
cagey or if they're in pr mode and you know
they have a story that they want to tell, but
maybe you try to nibble around the edges at smaller admissions.
Speaker 3 (40:47):
Well. And the other thing too is even if we're
not in our jobs like trying to like, you know,
most of our interviews aren't like gotcha now views, But
I think that there's something to be gleaned about question
structure and what is it that's going to elicit the
most fruitful answer? And so even in his first example,
are you concerned about X? It seems like that's the
(41:08):
question we might ask on a range of things. Are
you concerned about what AI is going to do to
your business? Are you're concerned about what the energy transition
is going to do to your oil company? Versus? Maybe
we can frame it as what are your biggest concerns
about how AI will affect your business? What are your
biggest concerns about the energy transition? Even when we're not
trying to catch people in a lie, there's probably good
(41:29):
lessons and hear about higher quality questions.
Speaker 4 (41:31):
Just in general.
Speaker 1 (41:32):
Absolutely also asking the questions that other people haven't asked yet.
We do try to do that, Like sometimes we ask
the obvious questions. Yeah, and they're the most interesting ones,
but no one has asked them before because they seem
so obvious. Totally, Well, anyway, shall we leave it there?
Speaker 2 (41:49):
Let's leave it there.
Speaker 1 (41:49):
This has been another episode of the Odd Thoughts podcast.
I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 3 (41:56):
And I'm Joe Wisenthal. You can follow me at the Stalwart.
Check out the book Spy the Live former CIA officers
teach you how to detect deception from our guest Phil Houston,
follow our producers Carmen Rodriguez at Carmen armand Dashel Bennett
at Dashbot and kil Brooks at Cale Brooks. And thank
you to our producer Moses ondm and from our Oddlogs content.
(42:16):
Go to Bloomberg dot com slash odd Lots. Weable blog
transcription in the newsletter, and check out the Discord chat
twenty four to seven with fellow listeners Discord dot gg
slash od.
Speaker 1 (42:27):
Loots and if you enjoy odd Lots, if you want
Joe and I to tell more lies to each other
and play parlor games around that, then please leave us
a positive review on your favorite podcast platform and a
reminder for Bloomberg subscribers, you can listen to all Oddlots
episodes ad free if you connect your Bloomberg subscription to
(42:47):
Apple Podcasts. Thanks for listening
Speaker 4 (43:07):
In
Hello, and welcome to another episode of the All Lots Podcast.
I'm Tracy Alloway.
Speaker 2 (00:15):
And I'm Joe Whysenthal.
Speaker 1 (00:16):
Joe, I'm kind of nervous about this episode.
Speaker 2 (00:19):
I am too.
Speaker 3 (00:21):
About fifteen minutes ago, the same thought flashed through my mind,
I too, am a little nervous about this episode.
Speaker 1 (00:27):
Believe it or not, we do some preparation for our episodes,
although maybe it doesn't always show this particular episode, I
haven't done a lot of reading into this topic, and
I'm really hoping the guest doesn't notice. But I think
my chances are very low because we are literally going
to be speaking to someone whose whole career is about
(00:50):
basically spotting lies.
Speaker 3 (00:52):
I mean that's essential. Like in the business world, if
you really think about it, you know, companies come on
their calls. I think they don't typically lie per se.
I don't think executives lie that much, but you know,
they shade the truth. They highlight some things, they don't
highlight the other things. I feel like it would be
a pretty good skill to have in life to just
generally and especially in business, to just generally know whether
(01:14):
someone is being honest with you or not.
Speaker 1 (01:16):
Absolutely, it feels like a sort of module they should
have at Wharton if you're doing a business degree in
an MBA.
Speaker 2 (01:21):
That I've never seen in an MBA program.
Speaker 1 (01:24):
Well, the person we're going to be speaking to actually
came to us via Brad Jacobs. You might remember him
from the episode in which he was talking about his
latest acquisition and the new part of his logistics empire.
And he's written a new book and we were reading
it and one of the things that we thought was
really interesting was there was a mention that he was
(01:47):
working with a man called Dick or Phil Houston, an
ex CIA person who was basically a polygraph examiner for
a long time, and Brad and Phil were working together
as part of the due diligence process for Brad's many, many,
many serial acquisitions. So the idea was he might go
(02:09):
in and buy a company and then Phil would interview
some of the senior execs and basically try to see
whether or not what they were saying about the company
was true.
Speaker 3 (02:18):
Right, you know, speak of nice skills to have. There's
always that information asymmetry, whether you're just an investor or
whether you're buying out a whole company, and you know,
the seller is always going to know more. Sort of
classic problem in economics. But if you knew the result
of an answer is going to be one hundred percent true,
then that would be pretty great.
Speaker 2 (02:35):
So that would be nice.
Speaker 1 (02:37):
What's that TV show with the Girl who Can Spot
a Love?
Speaker 2 (02:40):
Oh? Oh, poker face? Poker face pretty?
Speaker 3 (02:43):
Yes, it's pretty. It's kind of entertaining. It's kind of
like it's it's fun.
Speaker 1 (02:47):
It's a fun It does seem like a useful scar too.
Speaker 2 (02:49):
Yeah.
Speaker 1 (02:50):
By the way, another reason I'm slightly terrified of this
episode is I used to know an XCIA person who
then went into another profession. I don't want to give
too much way, but it was finance related, so I
used to speak to him about financial things. And I
remember I met him once for lunch after a particularly
(03:10):
terrible mourning where something really really bad had happened in
my professional life. And I sat down and I was like, Hi,
how are you. How's it going? I can't wait to
have lunch. We're going to talk about capital markets or whatever.
And he immediately leaned forward and was like, Tracy, tell
me what's wrong. Something bad happened. And I asked him
how he knew, and he was like, oh, you got
this like little crease in the middle of your forehead.
(03:32):
And this wasn't you know, this was like a casual
source meeting. This wasn't someone I knew really really well,
but he knew he knew that I was upset. Anyway,
So on that note, very very pleased to say that
we are going to be speaking to Phil Houston. He
is a career CIA officer and also the author of
the book Spy the Lie. Former CIA officers teach you
(03:55):
how to detect deception, so we're going to learn how
to spot the bi Phil, thank you so much for
joining all thoughts.
Speaker 4 (04:03):
Tracy, thanks a ton for having me.
Speaker 1 (04:05):
So just to begin with, how do you become a
lie detection expert? What is this career path?
Speaker 4 (04:11):
When I joined the agency fairly early on, I was
called over to the head of polygraph in the agency
and they had spotted the fact that I had developed
a lot of information doing background investigations and they thought
that I would be a very good candidate for such
(04:34):
a position.
Speaker 3 (04:34):
There's so much to get into. Tracy mentioned that we
came across you talking to former guest Brad Jacobs, who
you apparently have worked with a lot. How do you
deploy LIE detection skills in the corporate context.
Speaker 4 (04:48):
Well, we use them in every single day. It's not
just in a regimen of due diligence protocol. We're looking
day in and day out. It's continuous of value, especially
with new companies that Brad acquires, because we never know
(05:08):
if we've missed something in the due diligence process, so
we're always paying attention. And Brad has been highly trained
now by us and my team in the lie detection
model that I developed when I was at the agency.
Speaker 1 (05:24):
What kind of things are you looking out for specifically?
So you know, if Brad says he wants to buy
a company, I'm sure he gets lots of information like
printed information as part of the due diligence process, and
then he has interviews with senior executives. What type of
questions would you be asking them.
Speaker 4 (05:43):
There are multiple areas of probing that we do. Number
one is first and foremost, is are there any problems
or circumstances associated with the acquisition that are not a
matter of record that no vera one has come forth
and said, hey, this is a problem or might be
(06:04):
a problem going forward. And so to gather that information
Usually the first encounter is with a management meeting, where
we sit down in front of management and ask them questions. Now, granted,
the topics are fairly traditional, but the way that we
(06:25):
word questions sometimes are very different. For example, on the
really key issues, we rarely will ask a did you
or do you so? For example, we won't say do
you have any concerns in this area? We use what
we call presumptive questions. And a presumptive question might sound
(06:47):
simply like what concerns do you have in this area?
It presumes that there's potential for a concern. The beauty
of that type of a question is that if a
person is telling the truth, it's still a very easy
and fair question to answer. However, if a person is
(07:08):
concealing something and we ask it presumptively, it generally and
often plants what we call a mind virus. The mind
virus is that thing that we've all been victims of.
It's when you know, somebody walks in the door in
the morning and their coworker comes running up and says,
(07:28):
you know, Joe, the boss wants to see you, and
you say, well, what's that about, and you know, they say,
I don't know but but right away and as Joe's
walking down there, is he likely thinking more, Geez is
going to be a great day, I'm going to get
a bonus, I'm going to get a promotion. Or does
he immediately start thinking what's wrong? Or is there a problem?
(07:49):
And if it is, then he's inventorying mentally what the
problems might be and how he's going to deal with that.
That mind virus triggers if someone's lying, it often triggers
the exhibition of deceptive behaviors, both verbal and nonverbal behaviors.
Speaker 3 (08:10):
I already love this conversation so much, but let's continue
to pursue. I imagine that when you're doing due diligence
on a company, you know it's the unknown unknowns, it's
the things that aren't written down. But you don't even
know the right question to ask because it's not written down.
But as you say the presumptive approach, talk to us
about like, okay, take the example further with a question
(08:32):
like that, what are the types of responses that would
say trigger warning lights of either it's verbally or physically,
this looks.
Speaker 2 (08:39):
Like a lie?
Speaker 3 (08:40):
Like what might be gleaned in the response and to
such a question, sure.
Speaker 4 (08:46):
In working with Brad, we've had all kinds of when
people are lying, all kinds of crazy responses. We've had
responses where we've said or made just simply the statement
listen in describing our diligence, we are also going to to,
you know, come in and take a look at your accounting,
and the person immediately says, oh, there's no need to
do that. And you'd think that they would realize how
(09:08):
obvious that that dodge is the spot, But at the
moment they're on the spot and they need it out,
and so they're not realizing the kinds of responses they give.
They'll also say, well, why do you need to go there?
Or why are you asking that? Or how much do
you need to know? Or here's what I can tell you.
(09:30):
And that's an interesting statement we hear and we listen for,
because if you think of the literal interpretation of that
statement here's what I can tell you, it immediately in
our world conjures up. What can't you tell us?
Speaker 1 (09:45):
Do people try to deflect? Having interviewed many people on
this podcast, the most problematic response that we tend to get,
hopefully not outright lies at least not often, but you
ask a question and someone will say, oh, that's very
very interesting. Now let me talk about this entirely different
point that has nothing to do with what you just asked.
Speaker 4 (10:05):
That could be a product of their media training, but
it also could be if it's accompanied by other deceptive behaviors.
And if we talk a little bit later about the
model for detecting deception, clusters are an important component of
that model. So more than just one deceptive behavior in
(10:27):
response to a stimulus, meaning a question or a statement,
that's what gets our attention. And so when they start
that deflection, deceptive people know that they can't just sit
there like the proverbial bump on a log and say nothing.
They have to say something. And so what they often
(10:47):
do is we'll try to lead us as stray by
talking about something they can comfortably talk about that you
might be interested to you and perhaps even a suage.
You know, what concerns they think you might have.
Speaker 1 (11:00):
Are lies in the business world different or do they
exhibit different qualities to lies outside of the business world.
So I guess in criminal activity or maybe in intelligence gathering,
going back to your career at the CIA, are there
differences in the way those lies benifest.
Speaker 4 (11:19):
The primary difference is tracy are the topics, but in reality,
the lying the behaviors remain the same. They're intrinsic to
human nature, and we have a very specific list of
behaviors that we are looking for. The biggest problem in
(11:42):
spotting lies if people are not trained, is when they
see something odd that happens, or something different or uncomfortable,
their instincts may kick in, but they might not recognize
what's going on, and they're only guessing at that point
as to whether they've just heard a line or not.
Speaker 3 (12:17):
Why do we back up and talk about the framework
or the model that you first developed at the CIA.
I imagined that over the years it's been refined more
examples and you get better and better at applying it.
Why don't you just sort of just bring us back to, like,
what are the core, like underpinnings of your approach.
Speaker 4 (12:33):
The core is that we have codified the behaviors, so
meaning that we've picked the behaviors that we know through
research and anecdotal evidence are the most reliable indicators. What
we learned in the early days is that many of
the traditional behaviors that we thought were good were not
(12:56):
and for example, take an eye contact for exams. Eye
contact is not nearly as reliable as people would think
it to be. Fact.
Speaker 2 (13:08):
Yeah, now, both me and Tracy a big relief on that.
Speaker 4 (13:11):
Yeah yeah. Eye contact can be very different, especially in
different cultures, in different regions. I'm here in New York City.
You know, if I were to walk down the street,
you know and smiling and saying hi to people and
so forth, that wouldn't look very good, right, or it
probably wouldn't go over very well. But in the little
(13:31):
town where I live in the reverse would be true.
If I if I didn't smile, or if I didn't
you know, nod, or even you know, verbally greet someone,
they'll walk away with a different opinion. And so the
eye contact piece is just simply not as reliable as
we need it to be. The anecdotal evidence in our
world uh supports that, as as well as some major
(13:54):
research studies. Two in particular, one in the US and
one in London, strongly suggests that the deceptive person often
has better eye contact than the truthful person does, highly
likely because they're forcing it.
Speaker 2 (14:10):
You know.
Speaker 1 (14:10):
Earlier I was using the term bs and lie sort
of interchangeably, but they're not exactly the same thing. And
in the business world, one thing that tends to happen
is you have people telling a good story about their business,
and the story, you know, it might even be true.
That might be the way particularly ambitious executive sees things unfolding.
(14:35):
I guess what I'm getting at is, how do you
tell the difference between an outright lie saying something fraudulent
about their business versus someone who's like trying to sell
the optimistic best case scenario story.
Speaker 4 (14:50):
Okay, first of all, let me go back to the
model itself. In the model, we're monitoring both their verbal
behavior or what's commonly been refined to a body language,
and we're also monitoring their nonverbal behavior. What I said earlier,
we're monitoring their verbal behavior is what they say. The
(15:10):
nonverbal is obviously what they don't say. And those both happened,
you know, often simultaneously or or in conjunction with a
single response to a particular stimulus, and we're picking up
on both of those. Now, what are we picking up?
All of the behaviors that we use fit into five
(15:32):
psychological buckets. The first bucket is the evasion bucket. Okay,
these are These are behaviors such as, you know, failing
to answer the question or qualifying the question. They're not
giving you some or all of what you want from them.
The second one is this persuasion bucket. And this is
(15:55):
kind of tracy where you were leading to if I
if I heard you correctly, where someone's trying to tell
you something positive or good because they can't tell you
the truth because the truth has consequences to it, so
they start using convincing statements, Oh, we would never do that.
We're a great company, we've been around forever, We've got
(16:17):
the best team in the industry. And they're trying to
convince you that you don't have to worry about, you know,
whatever it is or whatever topic that you surface to them.
The third behavior is aggression behavior, sometimes referred to as
attack behavior. Sometimes it's very visibly or visible, other times
(16:39):
it's more nuanced. So for example, you ask someone a
question and they say why are you asking that? And
or sometimes they say why are you asking me that?
You guys always ask these things. I've gone from you know,
to five different banks today, and it seems like every
single person has this has fixated on this issue, and
(17:01):
so forth. They're trying to get you to back off.
The fourth behavior is what we call manipulation. This is
where they're manipulating the circumstances of the interaction to their favor.
A good example of that is when you ask them
a question and they repeat your question. Now, you might say, well, geez,
(17:22):
what value does that bring to them? Well, the value
is that we think about ten times faster than we talk,
So in that second or two to repeat the question
could equate to twenty seconds of material to say or
strategy to pursue, and that's how they stay up with it.
Speaker 1 (17:44):
That was good media training, right. If you need to
buy yourself a little bit of time to formulate the
thoughts in your head, you repeat the question or say
something nonscript what a great point, Joe, thank you so
much for bringing that up.
Speaker 4 (17:57):
A non answer statement is another one in the manipulation bucket,
and for the same purposes, it's buying time. The fifth
and final bucket is the reaction bucket, and this is
again the body language when people respond either as a
result of the fight, flight or freeze response, or there
(18:19):
are a couple of other things that aren't caused necessarily
by that response. For example, something we call a verbal
nonverbal disconnect, where you ask someone a question and they're
saying no, I wouldn't do that, and at the same
time they're nodding their head yes in response to the question.
You see that kind of thing. But the other big one,
(18:41):
two big ones in the reaction bucket are when people
have anchor point movements in response to something you ask
them or see them. I remember, early in the early
days when I first started working in the investment world
at a hedge fund, and I was sitting there with
the hedge fund manager interviewing a management team, and I
(19:02):
remember he asked someone a very direct question about what
the street was saying was a problem, and the moment
he started answering the question, he reached across the table
and started making huge sweeping gestures on the table. And
we call those grooming gestures or anchor point movements. And
(19:23):
it can be as simple as a swivel in the chair,
a leaning forward after answering, or in the midstore or
in preparation for answering your question leaning backwards.
Speaker 3 (19:35):
In the case of the sweeping of the table that
they has, what is the respondent doing there implicitly or
why is that what makes that a tell or a edwy.
Speaker 4 (19:46):
From a psychological standpoint, what he's doing is cleaning up
the surroundings. He in his mind, is making life better
at that moment, because right now life's terrible because he
doesn't have a great answer to the question. And that example,
by the way, the company went under a few weeks
later for the exact issue that he was doing. That's sweeping. Now,
(20:08):
we don't rely on any one of these behaviors in
response to the question. We're looking for a cluster two
or more deceptive indicators will tell us immediately that we
have more work to do. More work simply means not
that we're leaping to judgment, but that we're going to
ask more questions, We're going to follow up, or we're
(20:31):
going to talk to somebody else once they leave whatever,
or do research whatever. More work means. But the beauty
of it is is that we don't get snookered, so
to speak.
Speaker 1 (20:44):
How often do you get false positives where you're interviewing
someone and you think this person is lying or there
are some bread flags here to suggest that maybe he's
not being one hundred percent truthful, and then you go
out you do additional info gathering as you were just describe,
and you find out, actually, maybe he's just a weird
guy or socially awkward or something like that.
Speaker 2 (21:05):
Sure, Sure, he just likes to straighten up the table.
Speaker 4 (21:07):
Yeah, very meticulous individual. More often than not not likely
to see. But if we're going to see one, it's
likely going to be in a situation where we're dealing
with multiple issues. So, for example, for Bradford years, we've
done a ton of employment pre employment screening, especially for
(21:28):
the senior executives, and there may be more than one
lie or more than one problem that they're worried about,
but because of something called psychological set, it means that
they have a fixation or fear on one particular area
of deception and they're not nearly as worried as much
(21:49):
about the other areas, And so most of their behavior
comes out on that particular issue that they're worried about,
and as a result, we may miss you know, which
would be a false negative. But if our bias has
the pitchfork effect, in other words, we're thinking, oh, that
this guy's not telling the truth about anything, then we're
(22:11):
starting to see false positives, and it happens I.
Speaker 3 (22:14):
Mean, I know you mentioned that eye contact is not
as robust as maybe people imagine in popular belief. But
I'm curiously in a world where more and more is
done zoom digitally, et cetera. Have you had to update
your tactics at all our approach? Can you talk a
little bit about lie detection in the pre and post
(22:35):
zoom era.
Speaker 4 (22:36):
Sure. We always, if we can, want to be doing
the interaction in person and in particular when we're there,
whether we can do it overtly or even covertly, we
want to head to toe observance of them as we're
talking to them, because the behavior can leak out anywhere.
For example, you know, we know that the feet are
(22:59):
always an anchor point, and if the fight or flight
response kicks in, it will often go to the feet first,
because that's our primary anchor point in life, and that's
what gets us out of trouble, that's the escape mode
and so forth. So we want to be able to
see those In the zoom we lose a lot. We
(23:21):
lose at least fifty percent of the reaction bucket, and
so we rely very heavily then or more heavily even
on the other four buckets, because those are all almost
completely related to the verbal activity.
Speaker 1 (23:36):
What about eye contact in zoom, because I will admit
I have a hard time focusing my eyes on zoom calls,
partially because I don't want to look at the screen
and see myself when I'm talking. It's just very awkward,
so I sort of look off in the distance.
Speaker 4 (23:49):
Does that mean anything, No, Tracy, there are people that
will tell you the opposite, But our research and again
the anecdotal evidence, and a lot of your taxpayers he
has gone to, you know, to invalidate some of that.
When you're on zoom, one of the biggest problems you
have both as the interviewer, if you're the person asking
(24:10):
the questions, or you know, if it's just a conversation,
one or the other is likely to experience what we
call mental drift, where when you're sitting there, you have
all kinds of distractors that are drawing your attention, whether
it's an email that pops up or a dialogue box
that pops up, whatever the case may be, or someone
(24:34):
sticks their head in the door or a sound outside
or whatever. It's so easy to become distracted, and it
happens a lot and so we have to be very
careful with, you know, using eye contact as a lie behavior,
so to speak.
Speaker 3 (24:50):
So in the CIA context, obviously a lot of people
engaged in intelligence gathering, it's good to.
Speaker 2 (24:55):
Know if someone is being honest or not.
Speaker 3 (24:57):
But I also have to imagine that in the CIA
content there are a handful of people for whom the
ability to lie is actually a valuable skill, including save
people who are going undercover in some situation which case
deception is actually.
Speaker 2 (25:09):
Part of the job.
Speaker 3 (25:10):
Can we learn to be better liars? Can we learn
to identify our own leaks and tells and behaviors and
sweeps and anchors and pivots so that we come off
more trustworthy than we should be in some situations.
Speaker 4 (25:23):
Most of the time, when people try to avoid light detection,
they're doing two things. Number one is they're trying not
to do things that everyone believes is obviously a deceptive behavior.
The second is they try to do things that and
(25:44):
focus on things that mask or carve out the other
behaviors that sound better, so to speak. And we know
that because once we develop this methodology in the CI
was the principal developer of both the model and the training,
we started training federal law enforcement, and they loved the
(26:07):
training we in fact did years ago before Homeland Security
with the US Customs down at the southern California border.
We did a lot of training for them, and they
actually did a study, a little mini study, to see
how well this worked, and it showed that their agents
were much much more better skilled at spotting who has
(26:30):
the contraband versus who doesn't.
Speaker 1 (26:47):
I mentioned in the intro that we hadn't done much
prep for this particular conversation. That was in fact a lie,
because I've done a little bit of prep. But one
of the things I saw that I thought was really
interesting was a bit where you were talking about cognitive
dissonance and how that feeds into asking the right questions
or interrogation techniques. And you are basically suggesting that someone
(27:10):
who is lying or misrepresenting the facts is dealing with
cognitive dissonance because more likely than not, they still think
of themselves as a good person even though they've done
or are doing a bad thing. And so the idea
is to allow them space to sort of deal or
sort through that cognitive dissonance out loud to you and
(27:33):
provide a narrative that explains their behavior. Is that a
useful technique in business as well, like the idea of
just providing people space to try to walk through their
mindset at a particular time.
Speaker 4 (27:47):
If you really want them to be truthful with you, your
demeanor is very important, number one. Number two, you need
to present yourself as doing your job, whatever your job.
If you're an investment analyst, you know, for example, if
you simply you know, present the questions or the opening monologue,
(28:11):
you know, to the meeting, saying hey, listen, you know,
let me just say up front, we're really interested in
you guys, but I really need to ask some direct questions,
so please if I don't mean to offend you or
anything of that nature. And then you lower their guard
a little bit. And it's amazing. Just simply opening up
the conversation that way and then presenting your question in
(28:34):
a non threatening manner, you can begin to get people
to open up. There is another methodology that we use
if and when we think that someone is lying and
we have the green light from the client to use
that methodology, and it is much different than what you
(28:57):
would think of as interrogation. It's a persuasion technique that
is enormously effective, and sometimes you get the whole story.
Most of the time, though you get at least more
than they'd given up at that particular point.
Speaker 3 (29:11):
Could you explain that a little bit further? What's this
approach about?
Speaker 4 (29:14):
Sure? I once had a hat in my office It said,
if your lips are moving, you're lying, okay, And in reality,
if I think the person's lying, I want to go
for a period of time where their lips are not moving.
I want to be the one talking to them, and
I'm going to be not saying random things. I'm going
(29:37):
to be using very selective influence techniques that will help
me make it easier in their mind at that moment
to fess up. And we've used these techniques on spies,
on criminals, on double agents. I know I have three
(29:59):
confess essions from double agents in my career at the agency,
and to get a confession from a double agent is
like solving the most major crime you can you know
you can solve, so to speak, in our world.
Speaker 2 (30:13):
So what does that sound like?
Speaker 4 (30:14):
Like?
Speaker 3 (30:14):
How do you like what are some of the things
you say?
Speaker 4 (30:16):
Yeah?
Speaker 1 (30:16):
Do they actually admit it? Do they go like, oh
you got me, I'm a double agent, but.
Speaker 3 (30:20):
Like yeah, and how like what are the things you
say to like put them in that framework.
Speaker 4 (30:23):
Like that that is is a longer monologue, so to speak,
if you will. And so you know, if you think
about the interview and interaction, it's a dialogue. And so
when we go in the monologue mode, we're in the
in that direct elicitation mode. And it sounds very low key,
so different than what you see in the movies where
(30:46):
somebody starts, you know, the conversation by yelling, you know,
screaming you better tell me or you know, we're gonna
and they list a series of consequences. We do the reverse.
We lower our voice, we start talking. We start telling
them reasons why people have done this and that we
(31:08):
understand those reasons. So there are just a lot of
different categories of things that we can say and do
that make it easier and over time to talk about it.
And often it doesn't come out as the big confession.
It often comes out as an admission about something related
(31:31):
to it. And then we take that admission and it's
like a thread or perhaps peeling the onion to use
another metaphor, and you start just peeling or tugging and
you begin to get the information.
Speaker 1 (31:46):
That reminds me, actually this is a little bit media
naval gaisy. But Joe and I have talked about this before,
but every once in a while we will get comments
saying like, Oh, I wish you'd pushed back on this
point a little bit more in the interviewer. Why didn't
you press them on this particular point. And it feels
like people have an idea in their heads that like,
(32:09):
if you just ask the right question enough times, eventually
you'll get that kind of gotcha moment from the interviewee
and they'll just throw their hands up and say like, oh,
you're right, I'm completely wrong, blah blah blah blah. But
that hardly ever happens in my experience, Like even the
best interviewers in the world, it's difficult to elicit that
(32:31):
particular reaction because everyone is so on guard for that
like major admission. So it's interesting that you sort of
you go for the smaller admissions that maybe are tangential
to that, and then try to pull those threats.
Speaker 4 (32:44):
In some cases yes, in some cases no, we're reading
them very closely as we're talking to them. If we
think that they're prone to confessing the you know, yes
I killed them, or yes I we cook the books,
or yes we did this, then we'll go for that.
But if it's clear that they're being cagey and they're
(33:07):
trying to dance around the issues and so forth, then
we'll go for much smaller chunks of information. And it's
very effective. And keep in mind the more questions you
ask someone a human being. But we know from the
behavioralist is that every time a person lies, their resistance doubles.
(33:30):
So if you were keeping score and you were lying
to me and I said, Tracy, did you do it?
And you say no, you get two points for your answer,
but I only get one for my question. And then
I ask it again in some other other way, and
now the score is four to two, and then eight
to three, and so on and so forth.
Speaker 1 (33:51):
I'm sort of building up a wall.
Speaker 4 (33:52):
I guess exactly. That's a great analogy, you're great metaphor.
Speaker 2 (33:56):
Does everyone lie?
Speaker 4 (33:58):
The research set as that in the western world, meaning
in the in the Western hemisphere, that the average person
lies at least ten times every day. Now, now they
include in those lies, you know, in the metrics for
that research, they include what we call you know, the
(34:19):
white lies. I like to call them the smart lies.
If I go home from this trip and my wife
has a new hairdo and I and my immediate thought
is yikes, and she goes, hey, honey, how do you
like my you know, my hairdew, I'm definitely not going
to say yikes, but I'm going to try to soften
the blow, you know, at a minimum. And if I
(34:41):
can get away with all, that's nice. And then you
know she'll she'll pick up on something. She worked for
the agency as.
Speaker 2 (34:48):
Well, So it's got to be Yeah, that's so easy.
Speaker 4 (34:51):
It's a two hit short. You're going to be very
very careful.
Speaker 1 (34:53):
Wow, communication in your household must be both excellent and
at times fraud but phil At times. You have been
described as the human polygraph. I think, can we play
a little game, a little live spotting?
Speaker 4 (35:08):
You can, but I will tell you up front that
what causes deceptive behaviors is the fear of detection, and
so parler games, it's difficult, if not impossible, to spot
the deception because the person doesn't have any fear. The
game is and they know and they know how the
(35:29):
path to win it.
Speaker 1 (35:30):
Oh, maybe it's not a good idea.
Speaker 3 (35:32):
Though, I want to know what your lie was going
to be, Tracy, I'll give it a shot as well.
Speaker 1 (35:35):
And okay, all right, Three things. Number One, I went
on vacation to Brazil and it is my favorite place
in the world. Number two, I have a corky named Pablo.
He just turned four. Number three, I want saying karaoke
with sir Ian McKellen.
Speaker 2 (35:53):
I think I know the answer.
Speaker 1 (35:54):
I think you might know something because I just like
of enough, like you're.
Speaker 4 (35:58):
You're you're exhibiting almost zero deceptive behavior. So I if
I were forced, I would have picked number one.
Speaker 3 (36:06):
Oh that's right, that's right, that's right. That was there
something at all in the way.
Speaker 4 (36:11):
She said that absolutely, she she went to the persuasion bucket.
To the others, she didn't there was nothing persuasively.
Speaker 3 (36:19):
Wait, what did she say?
Speaker 2 (36:20):
How did she phrase?
Speaker 4 (36:21):
She said? That was? She says, I went on vacation
to Brazil and that's my favorite place in the whole world.
Speaker 1 (36:27):
I emphasized it, and I don't normally emphasize words.
Speaker 3 (36:31):
That's really good. That was really good because like I
knew it because I had heard you talk about karaoke
and I know your dog, so I just knew it, Brazil,
but I did not pick up on your embellishment of
that fact.
Speaker 1 (36:42):
So this is I swear, this is such a frightening
episode for people who talk for a living.
Speaker 3 (36:48):
Do polygraphs work. You mentioned you're the human polygraph but
where do we stand the conventional wisdom on actual.
Speaker 4 (36:53):
Polygraphs in the in the hands of a well trained polygrapher,
they're incredible.
Speaker 1 (37:00):
Oh really, yeah, Maybe just to boil it all down,
what is your top tip for spotting lies in the
business world?
Speaker 4 (37:09):
At a minimum, pay attention to the evasion bucket. So
whether it's in a pre employment interview you're doing, whether
it's in an m and A situation, whether it's in
an employee malfeason situation, if they don't answer your question,
and if they don't answer it entirely, don't think of
(37:32):
yourself as a human light detector, but take that as
a catalyst for doing more work. I give you a
great example. I remember interviewing a very senior executive candidate
at a Fortune two hundred company, and they love this guy.
Everybody had interviewed him, they loved him. And when I
(37:55):
interviewed him after the one hour interview, I walked back
out into the CEO's office. They said what did you think?
And I said, well, he's got a lot going for him.
But the problem I'm concerned about is he's been either
fired or separated involuntarily from his last five jobs.
Speaker 1 (38:13):
How did you know that?
Speaker 4 (38:14):
Because when I ask him the first time, I asked
the normal questions, but then I ask a question that
no one typically asks. So somebody comes in and says, oh,
we had a restructuring and you know I was thinking
about maybe changing jobs. So I put up my hand
and said, I you know, hey, I'll be glad to
(38:37):
take one of those or whatever and so, and people say, okay,
that makes sense. We hear a lot of people that
do that, but they fail to ask the simple question,
could you have stayed if you wanted to? Wow?
Speaker 3 (38:51):
I just have one more small question, out of curiosity,
have you or anyone approached you or is there any
work on AI machine learning of pro just to lie detection?
If you have all these video of interrogations and texts
and documents other is there any work being done on
that approach?
Speaker 4 (39:08):
Joe, I'm so glad you asked. We are working on
it furiously and we've already had some success and we're
making great progress.
Speaker 1 (39:17):
Exciting stuff, all right, Phil Houston, thank you so much
for coming on all thoughts and telling us how to
spy the lie. I appreciate it.
Speaker 4 (39:25):
Thank you guys. It's been fun.
Speaker 2 (39:26):
That was really fun. Thank you so fun.
Speaker 1 (39:28):
Yeah, it was terrifying and fun. Joe, that was really fun.
Speaker 3 (39:45):
I was super impressed that he caught your lie. I know,
especially because, as you said, you don't make sense that
parlor games when the stakes aren't really there, that you're
not going to have that same response, but that he
caught that embellishment your first question and flagged it.
Speaker 1 (39:59):
And it's definitely going to make me think about what
words I'm emphasizing you.
Speaker 3 (40:04):
Didn't mean to like at that point, right, No, Like
you didn't think I'm going to give a little clue
here on this one right now. No, I s not
voluntarily offered up a clue that, like you did not
intend to.
Speaker 1 (40:15):
Yeah, I mean I tried to make them like fairly neutral.
Obviously you have to say something, but I was trying
to make each of them like roughly similar to the others.
But he absolutely nailed it. No, I thought that entire
conversation was really interesting, especially given that our day jobs
is to interview people, and the idea of like, maybe
you don't seek out the big admission if people are
(40:38):
cagey or if they're in pr mode and you know
they have a story that they want to tell, but
maybe you try to nibble around the edges at smaller admissions.
Speaker 3 (40:47):
Well. And the other thing too is even if we're
not in our jobs like trying to like, you know,
most of our interviews aren't like gotcha now views, But
I think that there's something to be gleaned about question
structure and what is it that's going to elicit the
most fruitful answer? And so even in his first example,
are you concerned about X? It seems like that's the
(41:08):
question we might ask on a range of things. Are
you concerned about what AI is going to do to
your business? Are you're concerned about what the energy transition
is going to do to your oil company? Versus? Maybe
we can frame it as what are your biggest concerns
about how AI will affect your business? What are your
biggest concerns about the energy transition? Even when we're not
trying to catch people in a lie, there's probably good
(41:29):
lessons and hear about higher quality questions.
Speaker 4 (41:31):
Just in general.
Speaker 1 (41:32):
Absolutely also asking the questions that other people haven't asked yet.
We do try to do that, Like sometimes we ask
the obvious questions. Yeah, and they're the most interesting ones,
but no one has asked them before because they seem
so obvious. Totally, Well, anyway, shall we leave it there?
Speaker 2 (41:49):
Let's leave it there.
Speaker 1 (41:49):
This has been another episode of the Odd Thoughts podcast.
I'm Tracy Alloway. You can follow me at Tracy Alloway.
Speaker 3 (41:56):
And I'm Joe Wisenthal. You can follow me at the Stalwart.
Check out the book Spy the Live former CIA officers
teach you how to detect deception from our guest Phil Houston,
follow our producers Carmen Rodriguez at Carmen armand Dashel Bennett
at Dashbot and kil Brooks at Cale Brooks. And thank
you to our producer Moses ondm and from our Oddlogs content.
(42:16):
Go to Bloomberg dot com slash odd Lots. Weable blog
transcription in the newsletter, and check out the Discord chat
twenty four to seven with fellow listeners Discord dot gg
slash od.
Speaker 1 (42:27):
Loots and if you enjoy odd Lots, if you want
Joe and I to tell more lies to each other
and play parlor games around that, then please leave us
a positive review on your favorite podcast platform and a
reminder for Bloomberg subscribers, you can listen to all Oddlots
episodes ad free if you connect your Bloomberg subscription to
(42:47):
Apple Podcasts. Thanks for listening
Speaker 4 (43:07):
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