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.
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.
Don’t punish the bearers of bad news until you know the full story. We should welcome an uncomfortable truth making its way to our office because then we could help fix it. This simple rule may increase the signal-to-noise ratio without inhibiting the speed needed to be competitive in a global trading environment. It will enhance clarity top to bottom.
Informed opinion is often your first clue — don’t squash it for insufficient evidence. The power of “unknown knowns.” Our brains are constantly acquiring, examining, and storing information. We know it but don’t quite know why or how. 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. 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. Whenever you have an adverse business outcome, look first at the system and then at the individual. 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.
Adapted from an article by Eric J. McNulty at Strategy+Business