Is Leadership Honesty Really the Best Policy?

She had just been named president and CEO of a $300 million medical device manufacturer. The entire US sales force was waiting for her presentation at the national sales meeting. They were an angry crowd. Revenue and market share were declining, while manufacturing and customer costs were on the rise. Spirits were down and trust in management was nonexistent in this once stellar company. (1)

As she approached the podium, she decided to take a different approach to her presentation. She opted to talk honestly about what everyone else was discussing at the water cooler…

"I've always heard about what a wonderful company this is, but frankly, that's not what I see. What I see is deteriorating morale, disillusioned customers, and finger pointing. I see a place where R&D and manufacturing are practically at war. You folks in sales blame manufacturing, R&D blames marketing. We're all so busy blaming each other that nothing gets done. No wonder our customers are furious with us."

The response to the CEO’s frank comments was shock… at first. Then emotions changed. People began nodding in agreement. By the time Ginger Graham finished, they were shouting their approval and giving her a standing ovation. It was the beginning of her odyssey of honesty. Here's how we can apply what she learned to build more honesty in our work:

1. Assign employee coaches to executives.

2. Report the whole truth.

3. Ask the rank-and-file for help.

4. Tell stories.

5. Solicit ‘honesty’ feedback.

1. Assign employee coaches to executives.

Graham assigned each of her executives a coach from the non-managerial ranks. These rank-and-file coaches were asked to uncover employee perceptions about the executives’ honesty, approachability, responsiveness... The coaches met with the executives once a quarter to deliver their reports. The executives then met with each other to hold each other accountable to act on this honest feedback. Who should coach you?

2. Report the whole truth.

Despite what Jack Nicholson’s character proclaimed in the movie A Few Good Men, most employees can handle the truth. They not only can handle it, they hunger for it. Graham's team began talking with employees about everything that had been previously discussed only in senior management meetings. Topics included sales goals, financial performance, product milestones, key competitive information, market trends, problems, opportunities, successes, and failures. Information was disseminated and discussed at all-hands-meetings, as well as staff meetings throughout the organization. How can you disseminate more information to your team?

3. Ask the rank-and-file for help.

None of us is as smart as all of us. When employees have the right information, they can collectively come up with very effective and efficient solutions to difficult problems. Graham gives the example of a product launch that went so well that the executive team was on the verge of asking people to work seven days a week, three shifts a day, including Thanksgiving and Christmas in order to meet demand. Instead of making this unreasonable demand, the leaders called a meeting of all on their employees. They discussed the product rollout success and relayed powerful stories about the product from delighted patients and physicians. Then they asked the employees how to meet the extraordinary demand for their new product.

"Could you wrap our Christmas presents?" one woman asked.

"We’ll do more than that. Give us your lists, and will hire people to shop for you," the executives volunteer.

Graham reported that within a half hour, the employees came up with a variety of ways to manage the tension between meeting production goals and meeting their family needs during the holidays. What difficult problems might you bring to your team?

4. Tell stories.

The rank-and-file story in the previous section became a powerful anecdote about honesty that was frequently repeated in meetings and private conversations. Retelling stories weaves their lessons into the very fabric of an organization, and is how cultures are created. Winston Churchill was famous for promising "blood, toil, tears and sweat.” If you want more honesty, tell stories about people who delivered honest messages in tough times. What stories should you be telling?

5. Solicit ‘honesty’ feedback.

That which gets measured gets repeated. If you want to ensure that honesty is alive and well in your team, monitor and measure it. Graham implemented the “hot seat” feedback session. Each member of the senior management team would sit on a tall stool in front of his or her peers. One by one, their peers would bring up the shortcomings they had observed and offer suggestions for improvement. Initially, these were very unpopular sessions. However, over time people understood that feedback is neutral. It's up to the individual to choose how he or she wants to deal with it. Graham concluded that the hot seat was the most powerful tool for building mutual accountability and honest communication that she had ever seen. How might you adapt this tool to increase honesty on your team?

Is leadership honesty the best policy? In a word, YES… IF you want to achieve eXtraordinary long-term results.

Let me know what you think. I'd love to hear from you.

Dave

1. Ginger Graham; If You Want Honesty, Break Some Rules, Harvard Business Review, April 2002, 42 – 47.