The Transparency Edge. How Credibiltiy Can Make or Break You in Business

Half of the 12 people around the conference table sat there more than a little stunned. It was a meeting of key decision makers from a division of an Atlanta-based manufacturer, a 220-person unit with more than $1.5 billion in sales, and one of its biggest customers, a Fortune 50 company. The customer’s buyers and vice president, long accustomed to the manufacturer bending over backwards to please them, were listening to Tricia, the Atlanta company’s lead representative, surprisingly, albeit respectfully, explaining that the two companies would have to change the way they did business. “We had been working very hard to grow our sales with them, but we didn’t feel the progress,” Tricia said. “They were consuming a lot of our products, but frankly, they weren’t a very profitable customer. In the past, we had rarely challenged any of their requests, even when they ate away at profitability and drove a higher cost to service them.”

Prior to the meeting, Tricia and her team had determined that their customer must commit to being more stable and predictable—offering better forecasting, for example—in order for the relationship to continue. They also needed a “broader bundle of products, products that had more margin and more value to offset the high volume commodity purchases.” It was a difficult conversation and a risky demand for Tricia to make. After all, the client could have reacted indignantly and ceased doing business with her company.

Instead, the customer’s vice president took Tricia’s words very seriously, supported her needs, gave direction to his people to outline specific needs, and began working with Tricia’s team to change the business model. “It didn’t happen overnight, but things changed,” Tricia said. “Before that meeting, we did everything they asked for without really understanding the economic impact. But afterwards, we had a more honest relationship with them as opposed to just doing everything they wanted.”

The honest exchange, Tricia believed, also had a positive impact on her team. “It showed them that having those kinds of difficult conversations was important to improving business and that if we are prepared and honest with the facts, we can help our customers help us.”

Italian politician Antonio Gramsci once said, “Telling the truth is always revolutionary.” Credible leaders not only tell the truth; they also promote honesty throughout the organization. They are zealous hunting dogs of truth, sniffing out misunderstandings before they happen, digging for dishonesty, and constantly looking for secrets. People who are honest enough to be called credible lead the way and make things better for others by making honesty safe. They know that an honest culture breeds a trusting workplace. And when people trust each other in the workplace, business thrives.

A leader cannot assume that honest and straightforward communication exists naturally in an organization. I work with teams to create guiding principles—written statements that describe what must be present to work together successfully. Guiding principles always contain one or more vows to tell the truth. Team members commit to be “honest” and “direct and straightforward,” to “keep no secrets,” and to “not shoot the messenger.” Some ask, “Why do we have to do this? Don’t we all just know this anyway?” Perhaps, but credible leaders know that this assumption can be a dangerous communication sinkhole. Creating an honest culture requires formal commitments and diligent, deliberate effort day after day.

In his final remarks to his sales team at an annual sales meeting, Wes, a vice president at a major insurer, got everyone’s attention when he said: “And oh, by the way. Lie to me . . . and you’re gonna die.” He repeated the last three words for emphasis while everyone sat a little more upright in their chairs. “I mean it,” he went on. “Lie to me, and it’s over.” Anyone who works for Wes knows how important the truth is. If you do not choose honesty, you may still be breathing, but you will not have a job working with Wes.

Not every push for honesty has to be as stern and serious as Wes’s. There are other effective strategies that make people feel safe telling the truth.

Pay for It

Deanna Berg, Ph.D., an expert in group dynamics and innovation, gives pennies to senior leaders to emphasize visually how important it is for everyone on the team to be open and honest and “put in their two cents.” Her idea encourages people to say what they are thinking and has inspired many leaders to put a pile of pennies in the middle of the conference table in their team meetings. “The effect can be most interesting,” a senior executive who tried this technique relates. Reaching toward the middle of the table to the pile of coins, one of his team members slowly counted out 10 pennies as the rest of the group stared. “What I am going to say,” he said, “is a lot more than two cents worth.” And it was. Later, a coworker acknowledged his courage and said, “Thanks for saying what we were all thinking but afraid to say.”

Ask Leading Questions

Rarely is everything put on the table, so the truth must be sought constantly. Try to encourage and engage your followers in honest discussions by asking leading questions. For example, one executive always ends his meetings with, “What’s left under the table?” One leader opens meetings by asking, “What do I need to know that I might not want to hear?” Rather than stopping there, he continues to dig: “Is there more? What else? Is there another piece?” Consider making a habit of asking such questions. Do it in a way that feels comfortable to you. Sometimes people will respond; sometimes they won’t. People are not always going to say everything that is on their minds, but that’s not the point. Credible leaders elevate honesty as a vital, trust-building value; they model it, and they help others to do the same.

Model Vulnerability

Peter Porcelli, senior vice president of income development at the Eastern Division of the American Cancer Society in New Jersey, learned from a 360-degree assessment that his eight team members wanted him to do a better job in developing their talent. However, he wasn’t sure what that meant exactly or how to go about making an improvement. He tried asking each of his three direct reports for their answers, gave them some time to think of their response, and then followed up with a second conversation. “I find this very stressful,” one of his direct reports said. “I think the world of you as my boss, and it’s hard for me to tell you how to be better.” But she did. Peter discovered that she wanted more exposure to senior level executives and more support on a new initiative on which she had worked. By seeking out the truth, Peter received tangible suggestions on how to improve as a leader and had a valuable, honest exchange with a follower, who likely felt an increased respect for Peter.

Take the Hot Seat

Sometimes a leader can benefit from a more intense exchange of honesty, and I will suggest that they take the “hot seat” in front of all their team members, who have spent up to 3 hours with me developing a list of suggestions for performance improvement. It takes courage, but some leaders are willing to take the plunge. Jason, a telecommunications executive, was one such leader.

Let’s examine the case of Jason, a manager I recently coached. In a conference room, Jason introduced me to all 12 of his direct reports as a facilitator who would lead them in a discussion. He told them that he needed help being a better leader and posed three questions, based on information he received in a 360-degree assessment:

1. How can I better develop the talent on this team?

2. I think I am good at listening to bad news, but my feedback suggests otherwise. Help me to understand this.

3. How can I be a better leader to this team?

After Jason left the room, I got out my markers, walked to the flip chart, and said: “In the spirit of friendship and honesty, let’s get some answers for Jason.” Although they were hesitant at first, Jason’s team quickly embraced the opportunity, and the truth unfolded. Flip-chart pages covered walls, and soon it was time to summarize the information.

As I always do in these situations, I gave the team options for how to communicate their summary of information to Jason. They can choose a team member to be their spokesperson, or they can elect me to do it. As is usually the case, Jason’s team chose me to disseminate the feedback. Next, I did a sort of dress rehearsal, which allowed team members to change the order of their messages, give me examples, rewrite the flip-chart pages that would be given to Jason, and massage the script. “Use ‘difficult’ because ‘pigheaded’ sounds too harsh,” one member said.

The honest dialogue that generally ensues between the leader on the hot seat and his or her team can be extremely powerful. An IBM executive who once went through what Jason went through said to me: “I’ve jumped off telephone poles with my team. I’ve done all of Covey’s stuff and spent a month at Harvard to learn how to be a better leader. But this experience was the most powerful.” Indeed, this method of getting to the truth can benefit the entire group, not just the leader. Long after the hot-seat event, people often say things like, “We’re able to speak more honestly with one another.”

Ginger Graham, former president and CEO of medical device manufacturer Advanced Cardiovascular Systems, which spun out from Eli Lilly in 1994 as Guidant Corporation, described in a recent Harvard Business Review article a similar process in her organization. Each member of the senior management team would take turns sitting on a tall stool in front of the room, and while on the stool, they were only allowed to listen. In turn, peers bring up a shortcoming they observed and offer suggestions for improvement. Graham believed it to be one of the most powerful tools for building mutual accountability and honest communication. “Speaking the truth is the highest form of respect for an individual,” she wrote. She also saw a benefit for the larger organization. “As a result of this public exercise in truth telling, those of us who took the feedback to heart dramatically improved our leadership skill,” she wrote. “And the performance of the entire organization improved” (“If You Want Honesty, Break Some Rules,” Harvard Business Review, April 2002).

Be Diligent About Keeping Followers Informed

When employees are enlightened—for example, they understand the state of the industry and what’s required to keep their company afloat—then even downsizing does not seem like such a random and cruel act. Being more forthcoming about company information also slows the rumor mill. When people are left in the dark, they generally fill the black holes with their own—mostly negative—interpretations.

Truth telling in organizations can be difficult, and leaders often have to wrestle with complicated issues before being forthcoming. And yet honesty—or its resulting flow of reliable information—is no longer just admired ethical behavior but is fast becoming imperative to business success. While a lack of honesty does not always lead to outright fraud or a damaging scandal, it can lead to ineffective meetings, cynicism, low morale, and missed opportunities. When trying to create a safe place for honesty, leaders who model honesty bring top results.