There is a saying in England that I cannot find a source for, but goes something like this:
Wherever the Queen visits, it smells like wet paint.
The point being that a visit from the Queen is such a big occasion, that everyone works hard to make the best possible impression in advance of her visit, including giving all of the walls a fresh coat of paint. It is a really good expression that can also be applied to any leader: if everyone is striving to give you the best possible impression of things, how do you see things for how they actually are?
I tend to group reportees into three categories:
I prefer category 3: just give me the facts, as clearly and concisely as possible. Options and opinions are also of course welcomed, but start with the facts, otherwise I am going to have to parse these myself and that takes time and effort, and more importantly I might miss something or otherwise get it wrong. Getting to the facts is effectively cutting through the bullshit. Human beings are not robots, so will typically color facts with their own interpretations and opinions so it is important to be able to tell them apart.
If a reportee is continually reporting fiction rather than fact, you should ask yourself why they feel compelled to do so? Perhaps they want to make themselves look good, perhaps they want to make a rival look bad, or perhaps they are simply afraid to report the facts in case there are any implications for them. As a leader, you need to ensure that your guys feel confident in presenting the honest facts in a judgement-free environment, and it is your job to set that example. Facts can be judged and reviewed, but not the messenger. If you make the mistake of taking punitive measures against a messenger, or rewarding those who always report success, then you will simply encourage people to tell you what you want to hear and have a massive blind spot.
Beware of wet paint smells.