You Can’t Scratch an Itch You Can’t Find: A Case for More Open Disclosure in the Workplace

Business owners seem to know that the idea of sharing results and outcomes is a no-brainer for building a productive and motivated team. Without clear feedback that tells them if their actions are creating the right results, employees may feel like their fumbling around in the dark. It’s like trying to scratch the itch on somebody else’s back without the benefit of any “a-little-to-the-left-now-up-a-bit-yes-there-there-there” guiding statements. You’re bound to hit the spot by sheer luck eventually, but, really, why make it harder than it needs to be?

Still, many business owners are reticent to share financials, productivity numbers or bad news with their staff. Fear, defensiveness and a desire for privacy can all stand in the way. Here are a couple of things to think about if you tend to hold onto information tightly.

Open Books Can Have Closed Chapters: Some consultants might say “open book management” requires you to pull all the dirty laundry and skeletons out of the closet. I say – you define open. So you don’t want to disclose your personal salary or the fact that the company pays for your newspaper subscription? Then don’t. Better to pick and choose what you want to hold confidential than to universally keep it all under wraps. Open book management is not an all or nothing deal and something is always better than nothing.

Negative Information Can Motivate Employees: Of course, it’s always easier and more fun to share positive information. But maintaining a cool façade and putting on a happy smile when you’re uncertain how you’re going to meet payroll in the coming months does a disservice to you and your employees. When things are not going well, ignoring the facts doesn’t help you gain ground. In fact, employees are likely to drift into denial if the unpleasant reality isn’t spelled out clearly for them.

Larry Bossidy, former chairman of AlliedSignal, describes what he calls the Burning Platform Syndrome. When a company is in trouble, it is like an offshore drilling platform that catches fire. People need to take action quickly, and they do, because they smell the smoke, hear the explosion, see the flames. In a business crisis, employees are often unaware of the pending danger. You can’t act as though everything is peachy and expect them to pick up on the fact that, in reality, every fiber of your body is screaming for them to jump in and help you turn the ship around. Sometimes you have to paint a picture of flames and destruction, disclose the exact location of the itch that is driving you to distraction.

People Will Fill in the Blanks: People automatically fill in the blanks in what they do know with negative information. Human nature draws people to worst-case-scenarios. Whatever you’re paying yourself, your employees will assume it’s more. If you’ve lost a major client, employees will assume there are another half-dozen about to walk away soon. If one employee has been let go, they’re likely to assume they may be on the chopping block next. When left in the dark, people imagine monsters.

The reality is, your staff generally knows more than you think already, and what they don’t know factually they are likely to fill in with fiction. Painting a clear picture of your company’s current reality —good, bad or ugly — is the only way to control the accuracy of the message and to influence the response you desire.

How Wide Do You Open The Books?

There has been a lot of talk about this in my Circles this month. Just how much of your financials do you share with the people who work for you? And if you do, is it a help or a hindrance?

Here's my take on Open Book Management: As an entrepreneur, I'm pretty sure you use your financial statements to judge your company. It's not your only scoreboard, but it's an important one that helps you make good decisions. Why wouldn't you want your people working off the same scoreboard as you?

A foundational book on Open Book Management is The Great Game of Business by Jack Stack. Stack's basic premise is this: Your employees want to win, it's human nature to want to win. But in order for them to win you have to show them how to play the game and give them a way to keep score. And he advocates, from tangible experience, that your financials are great scoreboards and you can teach all of your staff members how to use these scoreboards to win the game you are trying to win with your company. Besides being practical, the book is
pretty darn inspirational. Jack's company, Springfield Remanufacturing Company remanufactures diesel engines; think of a company full of less-than-high-school-educated grease monkeys.

The risk, as I see it, is your people will come up with their own scoreboards to win a game they want to play, that may have little to do with the game you are playing. Don't you want alignment between their actions and your goals? Open Book Management is an effective way to do it. And an added benefit is that the burden of success is no longer just on your shoulders, it's spread out over the entire team.

Back to the original question: How wide do you open the books or how much to share? Wide enough that they can see the relationship between their actions and the results. That provides a lot a latitude. Crawl, walk, then run.

What are you comfortable sharing?