We need a better way to evaluate our business leaders, assert James O’Toole and Warren Bennis in a recent Harvard Business Review article (“A Culture of Candor,” June 2009). It’s no longer prudent to judge American corporate leaders’ performance solely on the extent to which they create wealth for investors.
Moving forward, a new metric is proposed: the extent to which executives create organizations that are economically, ethically and socially sustainable.
Wise leaders recognize that increased transparency is the fundamental first step. Broadly defined, transparency should mean the degree to which information flows freely within an organization, among managers and employees, and outward to stakeholders.
Roughly half of all managers don’t trust their leaders. Exact figures and study results vary, but no data compiled over the last 7 years have shown more than 50% trust for company leaders.
Easier Said Than Done
Why wouldn’t companies promote openness and a free flow of information?
Several issues arise:
· Can people communicate upward and do so honestly?
· Are teams capable of challenging their own assumptions?
· Can boards of directors communicate important messages to company leadership?
Transparency issues can involve a leader who won’t listen to followers, as well as followers who won’t speak up.
They also occur when team members are ensconced in “groupthink,” usually without awareness. People on the same team don’t challenge each other. Sometimes, they like each other too much. Other times, they simply don’t know how to disagree with one another.
Knowledge Is Power
In all groups, leaders try to hoard and control information because they use it as a source of power. But their ability to keep information secret is now vanishing, in part due to the Internet, as well as the facility of rapid communications.
Replacing a hoarding tendency with a transparency culture starts at the top:
· Look for counterarguments.
· Admit your own errors.