Early in my career, I helped manage part of the busy main selling floor of a major department store. My colleagues and I were responsible for everything from hosiery to hair accessories. I quickly learned that everyone in my position was caught in a long-standing conflict: Our bosses, the operations managers, would not approve sufficient personnel to staff all counters at all times, because they had a cost budget to manage, and simultaneously, the buyers whose merchandise was displayed at those counters insisted on constant coverage, because they had sales objectives to meet. The staffing plan was delegated to my colleagues and me. If we made the buyers happy, we were in trouble with our bosses, and if we made our bosses happy, we were likely to suffer the ire of the buyers who happened to see their counters unattended.
One of my more seasoned co-managers compared it to being in a family in which Mom and Dad don’t get along, and they deal with it by yelling at the kids. In our case, the “parents” made it clear that escalating the conflict with the other would be seen as a failure on our part.
Although this problem seemed resolvable, it persisted. Whether you attribute it to misaligned incentives or the failure of each side to see the bigger picture, it’s a perfect example of how easy it is for dueling realities to create enduring dysfunction in an organization. And even though my situation was relatively benign, other recent examples in the news are not: faulty airbags, manipulated emissions software, defective ignition switches, drugs sold for unapproved uses or to inappropriate populations. Each of these cases has individual causes and consequences. The larger question is, How do some companies make speaking truth to power a standard operating procedure?
Telling truth to power is challenging when your livelihood may be on the line, and hearing that truth can also be unpleasant. Still, when accurate assessments are seen as essential to the larger mission, truth can become part of the organization’s DNA. This is both more difficult and easier than it seems at first. The difficulty lies in avoiding excessive rules that limit speed and flexibility. The ease comes in leveraging insights from companies that have gotten it right.
Take a stakeholder view of your business. Too many corporate scandals come down to bad behavior undertaken in order to meet revenue goals or exploit a lucrative loophole in regulations. If you take a shareholder-centric view, almost anything you do to maximize share price is acceptable. Making money is great, and profit is essential to a company’s survival. However, this objective should be pursued in a way that does not cause harm to customers, workers, or communities. There will always be trade-offs (and disagreements about them), but if they are openly discussed and all stakeholder considerations acknowledged, a company is less likely to set off on a path to damaging consequences.
At a conference I attended earlier this year, an executive from a technology company presented the company’s new plan based on design thinking. Among the new dictums guiding the firm’s efforts is “Don’t ship sh*#!” Although this phrasing may seem crass to some, it is incredibly powerful. Three short words. One unambiguous statement. It makes it crystal clear that quality in every part of the organization is its long-term strategic bet and that short-term sales should not come at the risk of alienating customers with shoddy or unnecessary products or services.
Short-term sales should not come at the risk of alienating customers with shoddy products.
Don’t punish the bearers of bad news until you know the full story. I interviewed the head of an investment bank a while back. As he showed me the chaotic trading floor, I asked him how he managed it all. “Bad news finds me fast,” he replied. He explained that short of breaking the law or intentionally going against a customer’s interests, no one was ever fired for making a mistake. You would, however, be let go in a heartbeat for covering one up. He welcomed an uncomfortable truth making its way to his office because then he could help fix it. This simple rule increased the signal-to-noise ratio without inhibiting the speed needed to be competitive in a global trading environment. It enhanced clarity top to bottom.
Informed opinion is often your first clue — don’t squash it for insufficient evidence. In Bursting the Big Data Bubble: The Case for Intuition-Based Decision Making, I wrote about the power of “unknown knowns.” Our brains are constantly acquiring, examining, and storing information. This is, in part, how we develop a sense of when something just feels right — or wrong. We know it but don’t quite know why or how. When this intuition relates to something with which you have experience, it can be a powerful guide. It can be easy to push away a hunch about an uncomfortable truth with demands for more and more data — just look at the ongoing debate over climate change. So when you act to gather more data, it’s essential to know whether that data will help you find the truth or will merely be a sop to mask the discomfort.
Balance your examination of the system and individuals. It can be easy to reduce malfeasance to the acts of a few bad apples. This kind of thinking absolves the organization, and even the larger system, of blame — it’s a comfortable place for those invested in the status quo. I take a lesson from a healthcare system where I conducted a number of interviews earlier this year. Their quality ratings had gone from middle of the pack to tops in the nation. Whenever they have an adverse business outcome, they look first at the system and then at the individual. If the system is at fault, management is held accountable for faulty processes and protocols; if the system worked but an individual ignored or deviated from it, that person bears the responsibility. This intentional ordering of the inquiry makes it easier to find and solve larger problems that could otherwise easily be misattributed to individuals.
No organization is perfect and there will always be flawed people who make bad decisions or take ill-advised actions. But the more comfortable the many good people in your company become at telling truth to power and the better the powerful become at hearing it, the less likely you are to confront an uncomfortable truth about your organization in the headlines. Resolve the small issues so that they don’t feed a culture that breeds larger, more consequential incidents.