It was during the Second World War in the United States that the phrase—“loose lips might sink ships”—gained popularity and was used as propaganda posters to warn and remind soldiers and officers that their indiscreet talk and unguarded speech could lead, not only them in trouble, but the entire country in avoidable trouble. During war, it is useful to get to know a lot of information about the enemy and boastful talking by anyone from the enemy side can be one of the best and easiest sources to know a lot about the enemy which otherwise would never have been accessible. Similar measures were taken across the Atlantic where the British equivalent was “careless talk costs lives,” and the Germans used “Schäm Dich, Schwätzer!” (shame on you, blabbermouth!). Presently, the US Air Force warns with these words, “Loose Tweets, Destroy Fleets.”1
Basically, the idea was to keep mum and not to disclose unwanted information. It was important to remain mum even when the soldiers and officers were off duty and were with family. Remaining silent and not indulging in loose talk was considered to be essential as while speaking, inadvertently, a person may blurt out some information which might be vital and can be used by the enemy. Later, the word “might” was dropped and the American phrase was shortened to “loose lips sink ships,” a slogan that is used in general for any communication and reminds everyone to be discreet and avoid carelessness.
One of the fascinating aspects of the phrase has been that while talking loosely one doesn’t know as to who may be listening. In case a soldier reveals in any manner his location or the location of the ship—whether in simple and straightforward language or a coded language—there is always the possibility of the enemy intercepting the communication and trying to take full advantage of the information available. The young soldiers during the Second World War were seriously trained to understand the importance of silence not only in their speech but also in writing so that they did not write letters with potentially damaging information, often overtaken by emotion. Thus they were told, “silence means security,” and remaining silent requires immense inner strength. The emotional stability of these individuals was reflected in their conversation and writings. Even at home they could not afford to lower the guard. They have to be on constant vigil and very well balanced in choosing the right words to convey their thoughts. Censorship was imposed on them, but it was not practical to review each and every piece of paper. Self-imposed censorship was the best way to manage things in a proper manner so that any relevant information was not leaked out. Emotionally hardened soldiers were trained not to disclose anything material if captured as a prisoner. They were also trained not to tell any lies to the enemy camp, if captured, as it was, and is, very difficult to put all the lies together in the right perspective and then to justify them.
Nine posters meant for this purpose were published in an article in the Time in 2016. The basic theme of the posters was loose lips sink ships. Following are the messages written on the nine posters:
- 1.Loose lips might sink ships
- 2.Quiet! Loose talk can cost lives
- 3.Free speech doesn’t mean careless talk!
- 4.Keep it under your hat! Careless talk costs lives
- 5.Don’t discuss: troop movements, ship sailings, war equipment
- 6.Silence means security: be careful what you say or write
- 7.If you tell where they are going… They may never get there: don’t talk about troop movements
- 8.Don’t discuss secrets on the telephone
- 9.A wise old owl sat in an oak; the more he saw the less he spoke; the less he spoke the more he heard. Soldier… Be like that old bird: silence means security.2
The posters were plastered all over the country so as to encourage the people in joining the armed forces and in general not indulging in loose and boisterous conversations related to war. These posters very well communicated to the masses the idea of keeping a secret really secret in a business-like manner. A few more slogans conveying the same thoughts were “defence on the sea begins on the shore” and “defence in the field begins in the factory.” This applies to business as well as smart business leaders who consider their business to be nothing less than war.
The Business Perspective
For focussed business leaders, business is war, and nothing but war, which must be won at any cost. Just like war, in business neither they nor their lieutenants—directors, general managers, managers, executives and others—can afford to indulge in loose talk. Being indiscreet simply means being suicidal. Also, they cannot let their advisors—financial, legal, strategic consultants, technical experts, marketing wizards and so on—to ever try to take the risk of being rash even momentarily. The public relation officers and the communication executives have to be extremely cautious of not letting any information go out of the organisation and also to take every step to sensitise everyone in the organisation, especially the persons near the top of the hierarchy, not to provide even an iota of extra information in the public domain. This is particularly important as the people at the top of the pyramid in the organisation and near to the top are privy to confidential and sensitive information about the business concern.
Whether to be discreet or not is also a matter governed by legal provisions. Contractual clauses guide the conduct of executives in businesses. To remain on the right side of the law, it is often important for business leaders to understand that loose lips can invite trouble for them—both personally and professionally. The language used in communication also can be the differentiating factor as the language, usually, can be interpreted differently and may give rise to the possibility of being misunderstood. Hence, it is prudent to be careful in using the language—formal, official and business-like communication is least likely to be misinterpreted. But, if the same communication is laced with arrogance and haughtiness, there are very high chances that it will be misconstrued. Courtesy and politeness are less likely to be misunderstood and the benefit of the doubt always is given to the person who is maintaining plain and simple language, even if not titled towards higher forms of civility.
Business leaders don’t work nine to five. Even if physically they are at the office during certain working hours, their mind is almost all the time engaged with business-related issues. It is quite obvious for them to mix up the work issues with their personal life and talk shop at home with family and friends. This spill-over of the conversation related to work, which may be simply to share the things at office, may sometimes be damaging for the business. Nodding acquaintance with some persons and the desire to share even some remotely connected work issues in a guarded language is not appropriate. It may be just because of sheer passion for work that a business leader is tempted to talk about his achievements at work or the dilemmas faced at the workplace. The audience matters and many a time it is the yearning to be approved and appreciated for the decisions made that a speaker goes on providing information and detailed information about work, even when there is no need to impress the audience and seek their approval. Self-confidence and courage of conviction that what one is doing is the right thing to do—without being unnecessarily reckless—essentially are enough to make the conversation sail through.
The senior and top management executives usually meet a lot many people in different settings and circumstances. All of them may not be known to them, but very often successful businesspersons are requested to share their experience and give some tips to young and inexperienced entrepreneurs, students and others in general. During such occasions there is a tendency to overstate a little bit, if not completely exaggerate, and to justify these statements, one has to divulge certain facts which could have been easily avoided. For media interactions, it can be surely miserable if the interviewer is pushing a bit too much and not leaving the issues at the surface level. For prior scheduled interviews, panel discussions and speeches to be made, it is always advisable to prepare well and anticipate the questions which can be asked. Making comments without proper thinking can be interpreted by the media and observers in a manner which the speaker never intended. Thus, forewarned is forearmed. Getting provoked easily is the surest way to commit mistake and speak the things which need not be divulged. For the individual, words spoken in rage may lead him to jail or serious legal proceedings of defamation can be initiated. Wrong choice of words, in a fit of anger, can be troublesome from the legal perspective as the employers do not wish to retain any executive in a senior position who is not able to keep his cool and does not have control over the language he uses. Professionally, loose lips always invite suffering.
For business leaders, there has to be coherence in what they think and do. Intention, expression and action should be aligned. Whenever there is a gap between these three, problems arise and may continue even after the initial damage is done. Satyam, an Indian company, faced the disgrace due to its CEO Ramalinga Raju’s irresponsible utterances and actions, resulting in litigation for years in India and abroad.
Venture Global and Satyam’s Raju Case3
This is one of those cases which have been the outcome of misdeeds of a business leader and the manner in which he had set his lips loose. It was because of his actions and loose talk, even when there was nothing concrete on the ground, that the ship—the company—had sunk. This is about the company Satyam and its founder Ramalinga Raju. The long ongoing fraud has been compared with Enron:
The long-running fraud, which is being called India’s Enron, also raised questions about the vigilance of regulators in India and the United States.4
Disclosure of fraud resulted in dozens of legal proceedings, both in India and in the United States. In the 2017 judgment by the Supreme Court of India, the two justices had different views which resulted in a deadlock. The matter will now be decided by a larger bench; however, the facts, discussion and analysis give us a fantastic exposure to what can happen to legal proceedings, and how long and at how many different forums these matters can continue, only because of loose talk and reckless comportment of the CEO of the company.
In 1999, Venture Global, an American company, headquartered in Michigan, formed a joint venture (JV) with Satyam Computer Services, an Indian company—now known as Tech Mahindra—with each holding 50% shareholding in the JV called, Satyam Venture Engineering Services (SVES) in Hyderabad. The shareholders agreement provided for options in case of certain events of default: purchase defaulter’s shares or dissolution and liquidation of JV. The dispute resolution clause provided for arbitration. SVES entered into a contract for providing information technology (IT) services to TRW, a company engaged in automotive auxiliary business, in the year 2000. Disputes arose between Venture and Satyam, which were referred to arbitration. The award, dated 3 April 2006, ordered Venture to transfer its entire shareholding to Satyam, according to the shareholders agreement. Satyam filed for enforcement of the award in the Michigan court.
Venture challenged the award in the lower court in Secunderabad, the twin city of Hyderabad, and thereafter in the Andhra Pradesh High Court at Hyderabad—now known as the High Court of Judicature at Hyderabad—primarily on the ground that a foreign arbitral award cannot be challenged in an Indian court. Venture lost in both the courts and then moved the Supreme Court. Venture won in the Supreme Court, which decided that a foreign arbitral award could be challenged in an Indian court. In 2008, the Supreme Court restrained the transfer of shares and remanded the case to the trial court in Hyderabad.5
Then, Raju confessed.
Raju’s Confession Letter6
January 7, 2009
To the Board of Directors, Satyam Computers Services Ltd.
From B. Ramalinga Raju, Chairman, Satyam Computer Services Ltd.
Dear Board Members,
It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice:
- 1.The balance sheet carries as of September 30, 2008
- (a)Inflated (non-existent) cash and bank balance of Rs 5040 crore (as against Rs 5361 crore reflected in the books)
- (b)An accrued interest of Rs 376 crore which is non-existent
- (c)An understated liability of Rs 1230 crore on account of funds arranged by me
- (d)An over stated debtors position of Rs 490 crore (as against Rs 2651 reflected in the books)
- (a)
- 2.For the September quarter (Q2) we reported a revenue of Rs 2700 crore and an operating margin of Rs 649 crore (24% of revenues) as against the actual revenues of Rs 2112 crore and an actual operating margin of Rs 61 crore (3% of revenue). This has resulted in artificial cash and bank balances going up by Rs 588 crore in Q2 alone.
The gap in the Balance Sheet has arisen purely on account of inflated profits over a period of last several years (limited only to Satyam standalone, books of subsidiaries reflecting true performance). What started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow ov...