What’s Needed Next: A Culture of Candor

18 03 2010

While evaluating businesses by the amount of wealth created for investors is popular, there is a more effective way to measure business performance:the extent to which executives create organizations that are economically, ethically, and socially sustainable.”

Candor improves performance because employees can share information and make better decisions.  With collective intuition, executive teams can have different POV’s and get all the information possible.  Typically, leaders are more likely to make mistakes when they act on too little information than when they wait to learn more.  Employees will typically be less likely to to intervine on a bad decision when they work with leaders who are “decisive” and don’t listen to others’ advice (even if they have critical information that could save the company).

By sharing information, everyone in the company is on the same page and knows where the company is headed.

“The most common metaphor we’ve heard managers use to describe their own cultures is a ‘mushroom farm’ – as in, ‘People around here are kept in the dark and fed manure.”

The problem is that managers sometimes feel that access to information equals power and they believe that they are actually smarter than their followers.  So, they will hoard the information because they feel like they are the only ones who know how to use the info.

Why Transparency is inevitable today

The emergence of the internet, email, blogs, and text messageing prevents companies from keeping any secrets.  It is incredibly difficult for companies to hide information from not only their customers, but also their employees.  So, some companies institute a “no secrets” policy.  They reinforce the trust in the company by asking for cadid feddback from everyone in the company from the bottom up.  If the information is out there on the internet already, why make an attempt to hide it?  Just meet with the employees and ask for their honest opinions.

How to create transparency

(Note:  all these steps require the leader to be the model)

  1. Tell the truth
  2. Encourage people to speak power to truth
  3. Reward contrarians
  4. Practice having unpleasant conversations
  5. Diversify your sources of information
  6. Admit your mistakes
  7. Build and organization architecture that supports candor
  8. Set information free
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