One of the most important jobs of an analyst is to assess the quality of management. We’d all like to know when the person on the other side of the conversation -especially executives of stocks we’re researching- is being untruthful or at least sending us down the wrong path. Even among those who has extensively researched the topic of body language, there’s debate about how much can actually be concluded when attempting to detect deception. What is clear is that there is significant subjectivity involved and much practice is required to master the skill. As you’ll see in the best practice on this topic, for every cue there is a qualifier that says you can’t rely on it 100 percent of the time. Further complicating matters, very often the cue must be identified within a second of introducing the stimulus (e.g. asking the person a question), which leaves opportunity for error. With these caveats in mind, it’s still useful to be aware of methods to detect deception.
If you begin to see cues that you’re being deceived, continue to ask questions in the topic area to see what kinds of responses you receive, but do so gently and not in an accusatory manner. If your interviewee begins to assume that you’ve picked up on the deception, the subject may change altogether or the meeting may end. Given that you want to read the person’s body language as well as develop rapport, when entering a room for a meeting with management, attempt to get the closest seat to the person who will be interviewed. Somewhat related, if you have the chance to choose which manager to sit next to, make a point of getting to the person who influences or understands the critical factors the best. Don’t leave your seating to chance. It’s critical to get information as well as build a relationship with the managers who you think are likely to move up in the organization.
Below is a list of best practice on body language observations that includes elements of research conducted by the psychology and law enforcement fields, as well as lessons learnt during my own experience as a research analyst. This is an area, probably more than any other best practice that likely takes some time to master
Observing Body Language to Detect Deception
1) Body gestures: One of the best indicators to watch is the interviewee’s demeanour during a meeting. Does she or she appear happy you’re there, or aggravated and on the defensive? If your line of questioning is accusatory (which should be avoided), you might be the cause of the reaction rather than the person’s intent to deceive.
-The interviewee not aligning with you can be a sign of deception, such as leaning away from you, stretched legs toward you, or abnormal distance given the circumstances.
-Blocking moves such as crossed arms and legs.
-Placing obstacles between you, such as a glass of water or a book.
-Conducting diversionary activities, such as playing with an object, clearing off desk, or fixing hair while talking (an insecure CFO I interviewed watched TV for part of our meeting).
-A complete lack of normal body movement during the interview, such as no typical gestures to show emphasis.
2) Manipulation: Some people are masters of deception and may use techniques to influence you to overlook their deception:
-Touching you briefly on the shoulder or arm, which incidentally is also used by restaurant wait staff seeking a bigger tip.
-Mimicking your body movements, such as crossing arms after you do so.
-A dry mouth can be sign of deception, which can manifest itself in the form of a person licking lips, clearing throat, making hard swallows, or a cracking voice.
-If a smile is held too long, appears tight, doesn’t include eyebrow movement, or the expression looks forced, it could be a sign of deception.
-When lips appear tight in response to a question, there could be deception involved, especially if this hasn’t been characteristic of the person during other parts of the conversation.
-When interviewees cover the mouth, touch the nose, or look down, it may indicate lack of belief in what the speaker is saying (at least in Western cultures), but it could also be a stress-reliever, which is simply a sign that the person is uncomfortable and doesn’t have to be linked to deception.
-If the head is nodding up and down (a typical gesture for yes) while you are describing your view on a particular company issue and the person is saying no to the question (or viceversa), there could be deception. l’ve seen this first hand more than once.
-When the eye pupils are dilated or there is inappropriate closing of the eyes or squinting, it can indicate deception. If you know you’re about to ask a controversial question that could lead to deception, stay focused on the eyes to see if pupils dilate or the interviewee squints.
-If the person won’t look you in the eyes, you should be on guard for possible deception, although some experts say it only indicates the speaker is having a problem (e.g., trying to form a thought more clear (without distraction).
-Increased eye blinking can also be a sign that a person is troubled, but once again, not necessarily because of deception.
-Prolonged eye contact maybe a trick to convince you of the speaker’s sincerity or an attempt to dominate you.
In situations where management has been accused of wrong doing, if the interviewee personally attacks the accuser, it can be a sign of a cover-up; a highly personal attack may indicate a high level of defensiveness from management, which should start to raise yellow flags.