by Mark Moses, Entrepreneur Coach at CEO Coaching International
Many leaders and Entrepreneurs develop a bad habit over time of offering information on a need-to-know basis. Whether they avoid sharing strategic plans with rank and file employees or don’t facilitate collaboration between department leaders, this habit is a drag on the efficiency of their firm and degrades trust.
In an effort to save time and protect their company’s sensitive information, many leaders withhold information that isn’t mission critical. But repeated lack of transparency creates a culture of suspicion and a breakdown in communication. Top CEOs also forget that being too busy to share key information is just as destructive as intentionally withholding it.
Withholding Information Degrades Trust
Most business leaders begin with good intentions when they don’t offer up information freely. They aim to save time or streamline decision-making. But when their team feels left out of the loop or not included in important choices, team members start to wonder why. This comes up most often in strategic planning or considering new ventures. Employees who are not informed until after a decision is announced to the public begin to feel like outsiders, not to be trusted with sensitive knowledge.
Free idea sharing between employees and among department leaders acts as the oil of a company’s engine. However, when leaders begin operating their firms in silos and keeping information from crossing departmental boundaries, a breakdown begins. Managers unknowingly make decisions that may be in the best interest of their department, but not the business as a whole. The CEO becomes the sole point of communication between leaders, who stop collaborating with one another.
The most destructive type of information withholding is probably when we try to protect our employees from bad news. Leaders who aim to keep their teams from worrying don’t share the whole story. The problem is that our teams often sense our secrets and the closed-door meetings lead to worry.
I worked with one CEO who had decided to hire an administrative assistant to support the head of his sales team. He was alarmed a few days later to find his own assistant in tears after she came across the online job listing and assumed she was about to be let go. He felt even worse when he came clean and she mentioned that someone in her network would be a great fit and was looking for a similar position. Sharing information is not only helpful in avoiding misunderstanding, it can foster creative solutions to challenges.
Before you are tempted to keep bad news from members of your team, keep in mind that the scenarios they may imagine while worrying are almost always worse than reality. By being honest and upfront with employees about challenges your company is facing, you’ll decrease the time they spend wondering what’s going on and free up time to help navigate the obstacles.
How To Operate at Peak Transparency
To remedy this problem, spend a few minutes each week with your department leaders to catch everyone up on key projects. Try a round robin format where function leaders are given three minutes to update the group on important information, not re-hash their to-do list. By sharing “John is looking into leasing some new equipment for the office, chat with him afterwards if you have questions,” you can keep everyone informed without burning too much time. You’ll be surprised by how often informed team members will offer up ideas to reduce duplication of efforts or save money.
Not withholding information is an important first step in building a culture of trust and collaboration. But what if you want to take your firm to the next level, and aim for complete transparency? Professor Anthony Matthews teaches a course on Employee Ownership Management at UC San Diego. He advocates for complete transparency from the executive suite to the intern cubicles.
In managing his own firm, he leads quarterly meetings where he guides team members through the company’s financial statements that include a line item for his own salary. He finds that employees often overestimate the paychecks of superiors, which can breed resentment. By being upfront with the revenue sources and expenses of a business, leaders can align incentives to increase profitability and cut costs.
As a CEO, you probably don’t intentionally leave anyone in the dark, but are you effectively fostering open and transparent communication? Make a commitment to stop operating on a need-to-know basis and set an example by sharing information freely. Schedule quarterly summaries for the whole company via email, a meeting, or a quick video to share the good, the bad, and the ugly. Are you up for a real challenge? I recommend a quarterly “Town Hall” meeting where you answer the tough questions from your staff, submitted anonymously, on video or webex.
How do you foster communication in your firm? What is your biggest challenge to transparency?
About Mark Moses
Mark Moses is the Founding Partner of CEO Coaching International. CEO Coaching International coaches 100 of the world’s top high-growth entrepreneurs and CEO’s. They coach them on how to dramatically grow their revenues & profits, implement the most effective strategy, becoming a better leader, grow their people, build accountability systems and elevate their own performance. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.