Always tell the truth

When Tom Downs became Amtrak's chairman in 1993, he told his leadership team they needed to follow one rule -

Living by that one rule has helped the leadership team through the largest restructuring in the railroad's history. No one with Amtrak likes the anxiety and turmoil generated by the downsizing and route and service cutbacks, but Downs' candor has helped employees understand why the changes are necessary and what they can do to support the effort. As a result, many callers on a toll-free employee hotline are suggesting additional ways to improve service and cut costs.

Telling the truth doesn't always come easy. As Downs says, "A lot of organizations find it easier not to tell the truth by avoiding reality, facts, and things that seem to get in the way of success. But, we can't solve problems in an organization unless we tell each other the truth."

Downs is only one of a growing number of business leaders focusing on truth-telling as a way to achieve higher levels of business performance.

Jack Stack, president of SRC Corporation and one of North America's leading advocates of open-book management says: "The more people know about a company, the better that company will perform. This is an iron-clad rule. You will always be more successful in business by sharing information with the people you work with than by keeping them in the dark."

There are, of course, many business leaders who haven't gotten the message; often their business results show it. In the name of preserving power, protecting people or not wanting to work too hard, they varnish the truth or out-and-out lie to their people. They produce news releases claiming the president resigned "for personal reasons," or "to pursue other interests." They tell their people, "no changes are planned as a result of the merger," "no layoffs are planned in our efforts to cut costs," and "our employees are our most valuable resource."

These happy-talkers are a dying breed as shareholders insist on improved business performance.

They're being replaced by leaders who are asking:

* How do we quickly transform the work force into a high performing machine?

* How do we help our people understand the business climate and the need to change?

* How do we break the "we/they" entitlement mentality?

* How do we listen better?

* How do we "walk our talk?"

* How do we make sure we're focusing on the right things?

They're finding their answers in the same communication that resides within any high performing team, whether it's a symphony orchestra or sports team. Members of high performing teams understand why they're doing what they're doing, what they need to achieve, their stake in the game and their role on the team. They have the tools, including information, they need. And, they trust each other.

Successful teams are built on partnership. But, many organizations have been built on a patriarchal relationship.

Patriarchy is grounded in a controlling adult-child relationship of dependency. In the patriarchal relationship, the "deal" between the organization and its people is: "If you're loyal, work hard and do as you are told, we'll provide pay increases and security. We'll take care of you."

Over the past decade that "deal" was broken in innumerable companies as millions of employees were laid off. Loyalty, hard work and compliance no longer translate into pay and security.

A new deal needs to be defined - and with it a new relationship based on shared interests and partnership, not dependency.

Today's new leaders know that empowerment and high performance come from a partnership built on intense information sharing. Some practice something akin to full disclosure.

In his book "Stewardship," Peter Block writes: "Full disclosure is a critical dividing line between parenting and partnership. The things a parent would never tell a child have to be told to a partner. Truth untold to a partner is betrayal."

What does the new partnership of candor and disclosure look like?

Communicating the new deal

Candor and disclosure start with communicating the new deal.

An organization creating a partnership with its people believes in a deal based on a mutually beneficial relationship.

The new deal will vary from organization to organization. It will be based on a number of conditions, including challenge, self-direction, partnership, development and teamwork. It will be driven by the business strategy. Part of the new deal includes agreement by the leadership on what will and will not be shared within the partnership. And, that deal must be clearly communicated through what is both said and done in order to be credible.

Explaining the business context

Candor and disclosure mean communicating the business context - carefully explaining the "big picture," the business and how it works. They mean communicating, what makes it succeed and fail and how the score is kept. It means sharing financial, customer, competitor and supplier data and making the compelling case for change.

Building business literacy is key to understanding the business context. SRC teaches its people about business and how it runs. "We try to take the ignorance out of the work place and force people to get involved, not with threats and intimidation but with education," Stack says. He says his open-book management approach "is the best way I know of to keep people focused on the important issues facing a company."

Sharing the vision

Candor and disclosure mean communicating a clear picture of what the organization is attempting to become. This vision shouldn't be a simple-minded statement, wallet card or wall chart. Instead, it should represent the future condition toward which the entire organization must be directed. It must be a reference point for change.

Candor and disclosure mean clarifying the organization's values in everything that's said and done. Values shape the culture; culture drives behavior. The culture acts as a tiebreaker when people consider "how-to-act" options. For instance, when employees in a truly customer-focused organization are faced with the choice of returning a customer's phone call or returning the boss' phone call, they always will return the customer's call first. Values must be consistent with business strategy.

Sharing linkage

Candor and disclosure mean sharing honestly what organizational success - and failure - mean to the organization and all its people. They mean linking individuals to the vision, thereby creating a sense of purpose and self-worth. Purpose and self-worth are at the foundation of pride, optimism, respect and trust.

Performance results should be shared widely. And, reward and recognition mechanisms should reinforce the communication by enabling employees to share the gains - and shortfalls - they create. Mechanisms often take the form of stock ownership and profit-sharing plans.

Clarifying roles

Candor and disclosure mean clarifying roles.

In a world where people are asked to perform multiple roles in a given day, from project leader in the morning to subject matter or functional expert in the afternoon, rigid job descriptions are anachronisms. But, people still need to understand their roles and where they fit in the organization. They should know their roles in planning, forecasting and goal setting and building knowledge and competencies.

Providing support

Candor and disclosure mean ensuring that employees understand the organization's role in enabling them to achieve the vision. Support should come from personal and professional development opportunities, tools, capital, time and programs, processes, systems and policies conducive to achieving the vision.

Toward partnership

Moving toward partnership means eliminating the fear many managers feel about giving up the "power" associated with information. Actually, the "power" they feel they have is often an illusion. The real power lies within the engine - with the people of the organization. It's the leadership's responsibility to empower that engine. Failing to share information stalls the engine and preserves the patriarchal deal of the past. In 1995, patriarchy carries baggage in the form of high costs, slow cycle times, lower quality and poorer service.

Fully informed employees will be more likely to create competitive advantage than uninformed employees, especially if they believe they're the direct beneficiaries of the improvement. One international food products company is well known for its external secrecy, yet it shares financial information widely with its people. "Our people know that it's in their best interests to protect their interests. Why would they try to damage themselves and all they work for?"

Here are six steps to help an organization begin moving toward partnership:

* Create leadership understanding of the new deal. Base the new deal on the business strategy and a solid people strategy.

* Develop a communication philosophy based on the new deal.

* Develop a communication strategy to drive behavior toward desired business results.

* Educate people about the business.

* Teach people how to use information to improve the business.

* Align the infrastructure so the "say" and the "do" communicate consistently.

Jim Shaffer is a principal of Towers Perrin, Rosalyn, Va. He will be a speaker at IABC's international conference in Toronto, June 11-14.

COPYRIGHT 1995 International Association of Business Communicators
COPYRIGHT 2004 Gale Group