IBISWorld published my article, “Detecting Fake News and Baloney During Procurement Research,” in July 2017. In the article I provide background information and a checklist that procurement (and business) professionals can use to efficiently evaluate news stories. It was recently brought to my attention that the article is no longer available via IBISWorld’s website, so here it is in its entirety.
It is unfortunate, but over the past year the term “fake news” has evolved into an overexposed, meaningless buzzword. Fake news is not new. What is new is the attention it has been receiving since the 2016 presidential election in the United States. Fake news is not just limited to politics but is a reality in the scientific, academic, and business worlds as well. In Carl Sagan’s book, The Demon-Haunted World: Science as a Candle in the Dark, there is a chapter titled, “The Fine Art of Baloney Detection,” where Sagan addresses how scientists approach falsehoods. He discusses the baloney detection kit, which is a set of cognitive tools and techniques to be used to enhance skeptical thinking (Popova). Business researchers have always known about the strategic use of misinformation and allow for healthy skepticism at all times (Ojala).
Recent news stories confirm the need to be skeptical and highlight the importance of diligence. For example, in April 2017, 27 individuals and entities were charged with misleading investors into believing they were reading “independent, unbiased analyses” on websites such as Seeking Alpha, Benzinga and Wall Street Cheat Sheet. An alert was issued by the Securities and Exchange Commission warning that articles on investment research websites may not always be objective and independent, and investors should be wary (Stempel). In March 2017, Wilbur-Ellis, a pet food ingredient supplier, was charged with “providing allegedly misbranded and adulterated poultry ingredients” to Blue Buffalo (Wall). In 2016, Business Insider published an article that covers 18 false advertising scandals that ended up costing the involved brands millions. Some examples in the article include Volkswagen’s false advertising about environmentally friendly cars, Activia yogurt having special bacterial ingredients, Kellogg’s Rice Krispies’ claim of boosting immune systems and New Balance’s pitch that its shoes help wearers burn calories (Heilpern).
There are different types of fake news. Intentional fake news is written and communicated with the sole purpose of deceiving the reader for political or monetary gain or for the fun of pulling off a hoax. Satirical news uses humor to make a point and biased news favors a particular opinion. Meanwhile, some news is unintentionally misleading. Lazy or careless reporting can be misinterpreted, and honest, but unfortunate mistakes – such as new products unexpectedly performing poorly – fall into the realm of unintentional fake news.
Procurement professionals have always understood the critical value of performing research on markets and suppliers. When relying on external information it is vital to know what and where to search. Also of equal importance is knowing how to determine if sources of data are accurate and credible.
Below is a baloney detection checklist for procurement professionals to use when performing research. Before consulting the checklist, here are six tips to remember when researching:
- Being in a state of mindfulness and educating yourself about the reality of fake news is the most valuable step you can take
- More often than not, researching the research will be necessary
- When viewing a potential supplier’s website and its content, always remember that the number one purpose of a company’s website is to sell
- Trust yourself and trust your instincts. If you sense something is not right, it probably isn’t. If you are at all uncertain about a data point, or news claim, don’t use it. It’s not worth the risk
- Never use one source only if making critical decisions. Find several independent sources that say the same or similar things
- For optimal critical thinking and clear judgment, never research when you are highly emotional, overzealous, angry or anxious
When using this checklist, keep in mind that its purpose is to detect misleading information. It is understood that professionals involved with procurement research will most likely use high-quality resources from vetted content providers that specialize in the areas of market and supplier intelligence. The same understanding is applied to academic researchers who use peer-reviewed journals as preferred sources. The checklist is to be used when performing searches on the open web.
Caulfield, Mike. “How ‘News Literacy’ Gets Web Misinformation Wrong.” Medium.com. April 3, 2017, https://medium.com/@holden/how-media-literacy-gets-web-misinformation-wrong-45aa6323829d.
Heilpern, Will. “18 False Advertising Scandals That Cost Some Brands Millions.” Business Insider. March 31, 2016. http://www.businessinsider.com/false-advertising-scandals-2016-3.
Ojala, Marydee. “Fake Business News.” Online Searcher. May/June 2017, pg. 61.
Popova, Maria. “The Baloney Detection Kit: Carl Sagan’s Rules for Bullshit-Busting and Critical Thinking.” Brain Pickings. n.d., Accessed July 11, 2017, https://www.brainpickings.org/index.php/2014/01/03/baloney-detection-kit-carl-sagan/.
Stempel, Jonathan. “SEC Targets Fake Stock News on Financial Websites.” Reuters. April 10, 2017. http://www.reuters.com/article/us-sec-fakenews-idUSKBN17C1YP.
Wall, Tim. “Blue Buffalo Supplier Charged With 8 Criminal Counts.” Petfood Industry.com. March 10, 2017. http://www.petfoodindustry.com/articles/6334-blue-buffalo-supplier-charged-with-8-criminal-counts.
Zimdars, Melissa. “False, Misleading, Clickbait-y, and/or Satirical ‘News’ Sources.” Public Google Docs. https://docs.google.com/document/d/10eA5-mCZLSS4MQY5QGb5ewC3VAL6pLkT53V_81ZyitM/preview 2016 (Made available under Creative Commons Attribution 4.0 International License.)