Open

If you ask most business management teams today to list their favorite employee traits, I’d bet most of them would include honesty on that list.  But the sad truth is that most companies are filled with yes-men; employees rarely share their true feelings about a product, brand, or service in which their company has a vested interest.

Can you just imagine a meeting at Kodak where someone explained that digital photography was just a fad for the tech-savvy hobbyist, and no self-respecting photographer would ever give up film?

That actually reminds me of a story of when I was in my late twenties I was blessed enough to take a company public on NASDAQ as CEO.   I remember meeting with a well-known venture capitalist in his oak paneled office, surrounded by multi-million dollar pieces of art. I was passionately convinced that every single business had to have a digital strategy and that every business would have a website.  Mind you, this was right around the new millennium.  The response I received went something like this: “Kid, do you really believe your own BS?”  He didn’t invest, but we were successful.  I am sure the analyst sitting by the VC’s side had done careful research to indicate the web was also a fad.

That VC is out of business and we know what happened to Kodak.

Why?

Because they weren’t open, honest and direct.  If you look at some of the most successful companies, you will find that at their core, the culture encourages people to respectfully debate and challenge positions.  Not to demean or hurt people (although some cultures go too far), but to ask questions and share ideas for the benefit of the whole.  To honestly review data, even when it tells you an unpleasant fact, you must first acknowledge the problem and then work together as a team to resolve it.

In today’s information age organizations must rapidly pivot and improve – open, honest and direct communication is not a nice option to have, nor is it a trait you can talk about and ignore in practice; it’s essential for future success.

The Importance of Openness, Data and Transparency
Throughout my career, I’ve come into company cultures that shied away from the truth in favor of a cozy sales pitch that highlighted the good and pushed the inconvenient facts under a rug.  I’ve made it a habit to fight this wherever I see it by creating a culture of transparency based on data versus opinions.  We shouldn’t be selling ourselves our own products or services.  We shouldn’t approach a board meeting as a sales pitch, convincing ourselves that we have the best product on the market.  If you look at the corporations that have highly performing cultures, they are open and driven by data that is transparently disseminated.   In my experience, this is the critical piece to empowering a company’s cultural change.

What would have happened if Kodak had looked at the growth of digital and accepted that the data reflected an industry on the precipice of going through a period of intense transformation?  Would that VC still be in business, had they opened their eyes to the fact that tens of millions of businesses were reserving their own dot com name?

We will never know, because these companies didn’t have a culture of honesty and constant questioning.  The employees didn’t trust their bosses to be accepting of critical feedback and instead remained silent.  The culture of these companies often perpetuates a false sense of security, leaving everyone blindsided by industry changes or gaps in legacy leadership that they could have seen coming and been ready for, turning a potential gain into a disaster.

Six Clear Signs That Culture Might be Suffocating Honesty and Openness

 Hypocrisy – Leaders who say they want to be challenged and are seeking new ideas, typically refuse to listen or become defensive when they get them.  This is particularly damaging to new employees who have fresh eyes and can often bring the real issues to light.  Instead of being valued for the outside experience and brand new ideas they offer, they are too frequently shut down because “that’s not the way we do it here,”, “we already tried that and it didn’t work”, or some other answer.

A “silo” mentality – The state of mind that stems from departments or specific groups within a business that are hesitant to share data with other groups in the same company.  Besides crippling a company’s ability to fully understand and appropriately react to any issues that arise, this attitude can really dishearten employees who have seen a problem and feel like they don’t have the power to do anything about it.

Cliquishness – Possibly one of the quickest ways to cripple a company’s morale and culture, a leader who allows, or worse creates, cliques in their team is creating an environment that is not conducive to honest and open dialogue.

Hushed Reporting – Managers who discourage transparency or reporting metrics that might point to an issue or an upcoming change in the industry will be left as blindsided by change as Kodak or my VC.

Excuses – When employers encourage excuses instead of asking the hard questions that would help solve the root cause of the problems, it allows the employees to take the easy way out.  Problems are chances for a company to grow – they separate the successful companies from those who fail.

All Criticism, No Solutions – When managers always criticize but have no actionable ideas of their own, it leaves employees harried and without recourse for problem solving.

 

 

Five Keys to Building a Truly Open, Honest and Direct Culture

Trust.  Have your leaders trust that everyone has the best intentions for the business.  This promotes a company culture in which your employees, even the new ones, feel comfortable voicing their opinions and ideas on how you could be doing things better.

Build metrics around your business.  If the metrics show there is an issue, then it needs to be addressed.  Metrics don’t lie.  Build an honest set of baselines around your company’s performance and keep an eye out for patterns.

Team Outings.  Have team outings and interactions where hot topics are brought up, acknowledged and the team works together to resolve.  Building a sense of community between your employees elevates your team from a set of workers tasked to meet quotas to a cohesive unit that solves problems and drives results.

Never Punish. Encourage ownership of issues and never punish.  My leadership is always focused on the future. Whenever we have a bad outcome my focus is on what we can learn. In fact my favorite phrase is “given the same set of circumstances, what can we do to have a different outcome next time?”.  This creates a culture of owning and acknowledging issues instead of hiding or making

Honest Analysis.  If the data shows you have repeated issues in an area, look to the leader not the people. Great leaders should be actively helping their people remove obstacles.

 

What kind of culture are you driving?

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