Beware of red herrings ... why an executive must learn to be both a detective and an interpreter Featured

5:06pm EDT December 19, 2013
Beware of red herrings ... why an executive must learn to  be both a detective and an interpreter

First, a quick refresher. The term red herring is derived from the practice of training hounds to follow a scent, or distracting them with a different smell, during a fox hunt. In a story it can be a clue that leads the reader towards a false impression or conclusion. Not to muddy the waters, but this term also refers to a preliminary prospectus sometimes used for an initial public offering (IPO) that intentionally provides only a portion of a company’s vital data.

A red herring can also be a diversionary tactic used in business to make an argument, or raise a concern, that is not relevant to the central issue, but appears initially to be plausible. 

Has the tide turned?

Here’s an example: You have been working on an acquisition and finally the other side has agreed to a face-to-face powwow on your turf to seal the deal. After months of sweet-talking, playing nice and being on your best behavior, you think you can make this transaction finally happen.

Then out of the blue, a few days before the visit, you start to get not so warm and fuzzy emails from the other side referencing the offer price. Your touch-base calls suddenly go unreturned and you get that sinking feeling that the tide has changed.

What gives? First you must take a step back and retrace everything that has transpired since the tone began changing. Once you’re sure it’s not you, rather than improving the deal, you move to a watch and wait mode.

On the appointed day your guests arrive, you rush into the room, hand extended with a big smile on your face, but they signal indifferent expressions and reciprocate with wimpy handshakes.

To avoid making a huge tactical misjudgment, you must immediately move to detective and interpreter mode. The detective portion of this persona requires you to look beyond the obvious, not accepting circumstantial evidence as gospel, learning to think like Sherlock Holmes — assessing information and searching for real meaning from scraps of random comments and innuendos.

Part and parcel of this is also the need to function the same as a United Nations-type, interpreting words and body language to translate what is said into what is really meant. Effective managers instinctively can read between the lines to drill down to the lowest common denominator to get beyond red herring statements that merely become diversions to solving the real problem.

Playing a bargaining chip

Fast forward to the end of this dramatization and we learn that the visiting team was simply trying to put you on the defensive by employing a “big chill” technique to cause you to second guess your economic offer.

Their real objective was to gain a bargaining chip to get you to agree to allow them to keep their existing titles so they could save face in the community. This is right out of Red Herring 101.

Red herrings might provide some direction but, more frequently than not, they can send you down the wrong path.

With a little practice, a degree of healthy skepticism and a resistance to jumping to conclusions, red herrings can be readily spotted once it’s understood how people use them, either intentionally or inadvertently. A good starting point is to remember that red herrings, just like their real life namesakes, don’t pass the smell test.

Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. “The Benevolent Dictator,” a book by Feuer that chronicles his step-by-step strategy to build business and create wealth, published by John Wiley & Sons, is now available. Reach him with comments at mfeuer@max-wellness.com.