An Ex-CIA Officer Explains How to Spot a Lie in Business

Tracy Alloway (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:15)

And I'm Joe Weisenthal.

Tracy Alloway (0:16)

Joe, I'm kind of nervous about this episode.

Joe Weisenthal (0:20)

I am too.

About 15 minutes ago, the same thought flashed through my mind. I too am a little nervous about this episode.

Tracy Alloway (0:27)

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 basically spotting lies.

Joe Weisenthal (0:51)

I mean, that's essential like in the business world. If you really think about it, companies come on their calls. I think they don't typically lie per se. I don't think executives lie that much, but they share 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 someone is being honest with you or not.

Tracy Alloway (1:16)

Absolutely. It feels like a sort of module they should have at Wharton if you're doing a business degree, an MBA or something like that.

Joe Weisenthal (1:21)

I don't know, I've never been in an MBA program.

Tracy Alloway (1:24)

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 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 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.

Joe Weisenthal (2:18)

Right, speaking 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 the seller is always gonna know more sort of classic problem in economics. But if you knew the result of an answer is gonna be 100% true, then that would be pretty great. So maybe-

Tracy Alloway (2:36)

That would be nice. What's that TV show with the girl who can spot a lie?

Joe Weisenthal (2:40)

Oh, oh, Poker Face.

Yes, it's pretty, it's kind of entertaining. It's kind of like, it's fun. It's a fun-

Tracy Alloway (2:47)

It does seem like a useful skill.

By the way, another reason I'm slightly terrified of this episode is I used to know an ex-CIA person who then went into another profession. I don't wanna 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 terrible morning 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 gonna 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 little crease in the middle of your forehead. And this was like a casual source meeting. This wasn't someone I knew really, really well. But he knew. That's a good read.

Joe Weisenthal (3:39)

He had a good read on you.

Tracy Alloway (3:41)

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 how to detect deception. So we're going to learn how to spot the BS. Phil, thank you so much for joining Odd Lots.

Philip Houston (4:02)

Tracy, thanks a ton for having me.

Tracy Alloway (4:05)

So just to begin with, how do you become a lie detection expert? What is this career path?

Philip Houston (4:11)