Dear Reader:

This newsletter is longer than usual, and I apologize for that. In other cases, I've broken these up into numerous parts and that has worked very well from your heartening feedback. This one however just doesn't lend itself to being broken up. Moreover, the importance of this subject I believe justifies the length.

I will be so bold as to stake the following claim: This is really worth your time and mine. In fact, applying even a few of the key learning points here can really charge you and your team up in a sustained and enduring way, far more than any temporary 'motivation' ever will.

Let's make the 'case for candor' in our leadership lives. Enjoy!

THE CASE FOR CANDOR

Just recently, Jack Welch's new book, WINNING, came out. A particularly striking chapter was entitled 'Candor'. Mr. Welch goes so far as to call it 'the dirty little secret' of management and leadership.

I suspect he means we're not candid enough to admit the crisis of candor! It's certainly no 'secret' otherwise!

Jack goes on to give three highly compelling reasons to extol candor. First is drawing on all the intelligence you have available. We are in a competitive age where the quality of ideas will often determine who wins and who loses. Without candor, we won't get either all the ideas we should, or worse we'll get their skeleton only...all the flesh and bones will have been picked off by fear and hesitation. Without candor, we also lose commitment. If your ideas can't be stated, or won't be heard, why engage? The more engagement, the more intelligence we can mobilise, the more we'll win.

The second reason that Jack cites is speed. We know speed of response is a huge competitive advantage in today's helter skelter business world. The less candor there is, the more hemming and hawing there will be, the more times we will do laps around the pool rather than 'diving in' where we need to. The straighter we talk, the better we come to the point, the more quickly we debate and decide the real issues, the faster we'll move...and then have at least 'a chance' against some of those start-ups in Shanghai, Bangalore et al that we're all moaning about these days.

Finally, he refers to cost. How much does it cost to have people attend mind-numbing presentations that go nowhere, prepare hundreds of PowerPoint slides that seek to obfuscate and/or to at least 'marinate' the truth in huge dollops of diplomacy? Because the real issues don't surface, we keep discussing, keep attacking symptoms. We do this at an incalculable cost in terms of senior leadership time, logistical expenses, lost opportunities, stalled implementation, not to mention credibility.

So overall I find that Mr. Welch has, as ever, smacked us in the face with an exhilirating and oft-avoided truth. My only bone to pick is, it doesn't go far enough.

Candor IS the most encompassing leadership and management crisis around. Why do I say this? Well, let's see. Senior leaders rarely are candid even with each other. In leadership session after leadership session that I facilitate around the world, inevitably when it comes to stating 'leadership norms' or 'codes of conduct' or 'value-based behaviors' or whatever, there is always something like: 'We will speak the truth openly and early.'

Now, conceptually this seems obvious. The kind of thing kindergarteners hear over milk and cookies as they draw morals from a fairy tale or fable they've just read together. But practically, this IS the human dilemma in a nutshell. The above usually emerges from leadership teams at the senior-most level, after days and hours of intensive grappling with their most pressing and sophisticated issues. When we boil off the vapor, we're usually left with the above, as a central deposit.

Senior leaders communicating upwards to their ultimate bosses often are as guilty in this regard. When asked how they are doing, if the news is anything other than glowing, it is rare to hear the type of bracing report you'd hope for.

So, you won't usually hear something straightforward and action-oriented like: 'Terrible. We've just blown it this quarter so far. There are three reasons why. One we could have predicted, two I'm not sure how we could have known about. Regardless, here is the response we're making, and here's the extent to which I think we can recover, and by when. We'd welcome your ideas and we need your support in getting past this.'

Rarer still to then say candidly and courageously to the team: 'Guys, you know we've been blowing it. You may have thought we've been asleep at the wheel, we've often been getting aggravated thinking you aren't fighting hard enough. Let's stop finger pointing and quickly find out what's going wrong. Let's pool all our ideas and our passion, and let's quickly commit to what each of us are going to do to WIN. Let's hold each other accountable for turning this around, and to extracting every ounce of learning from it we possibly can for future success.'

Instead we are far more likely to hear the following chloroform being given to the company elders, 'Well, we're watching the situation closely, we're cautiously optimistic. There have been some challenges we couldn't have foreseen. We're taking action and are 'reasonably' confident we'll be on track. Let me review all the facts, and we'll have something to present to you when we meet next month...'

Then, out come the pom poms to their team: 'Team, we've had some challenges (usually implying YOU haven't delivered). Now, we have to show what we can do. Winners don't doubt, doubters don't win. There is no 'impossible', that is found only in the lexicon on fools. Who believes? Who dares? That's who will win, those are the people we need!' Some idealist or else some sycophant at this point usually jumps up in a haze of sentiment and pledges undying loyalty to the cause and is cheered as an example of the championship spirit. And so the masquerade ball continues... Notice, there is no emphasis on responsibility, on learning, just syrup.

Corporate presentations are another example. The senior leaders ask for a presentation on something. Rather than make it a real dialogue, they are asking people to 'present' to them. Those people stay up nights, work around the clock, rend their peace of mind, and arrive. Often they arrive as a team, but usually only one person speaks. The senior leaders receiving the presentation either try to come across as granite rock faces or else grin from ear to ear and nod vigorously. Either way, there are usually a few 'pointed' questions, some perfunctory ones, and then a 'Thank you for coming, we'll get back to you.' The last 5 words are among the most feared in corporate life, as they usually translate to, 'Drop dead, you'll never hear about this again.'

As the team files out, occasionally heartened, more often bewildered, sometimes dispirited at the LACK of what has actually transpired after all their effort, the REAL conversation then starts to finally take place.

The Board, or senior leaders once alone, then say all the things they really thought and felt, and decide what they're really going to do. The energy then shifts to what to tell the rest of the organisation, when to tell them, how to tell them, and how to 'package' it. What's been lost is a chance at relationship-building, coaching, mutual idea exchange, excitement and buy-in, from those very people who are probably going to be a part of implementing the edict when it is issued. As a way NOT to excite people, you couldn't come up with anything much better.

Take a look at performance reviews next, one of the bastions of disingenuous communication. Ask most people in most companies how many of them feel they have a crystal clear idea of where they stand, how they're doing, the next steps in their career if they deliver, and what they need to do specifically to improve, and you'll find a vacuum where there should be a floodlight of clarity.

Then ask people if when they went through their performance review absolutely EVERYTHING had been discussed before, as part of their ongoing coaching and leadership interaction. More often than not you'll be told that many surprises were sprung, many issues ventilated for the first time, and many conclusions shared that seemed odd and out of context. Nevertheless they get some 'median' score, and fill out some boxes about next year, and try to get as much bonus and increment agreed as possible.

A performance appraisal is meant to be a structured summary, a distillation, of a leadership development and coaching process that has been taking place ALL YEAR. You should know where you stand before you walk in, give or take 5-10%, and the bulk of the time should be going into how you're going to grow and improve. Most people rail at the inadequacy of these processes, most companies know they collectively do an appalling job here, though it rarely leads to much more open challenge and reform than some occasional tongue-clucking.

How candid are we about the quality of leadership provided by our senior leaders? At Semco, each leader's leadership is scored by the team and the results are published for everyone to see! This sounds extreme until you really look at it. What, after all, is there to hide? And why is it in the company or team's best interests TO hide it?

And all this can get really chronic even among exceptional teams. I was working with a team who had really grown in leaps and bounds in so many ways. They were starting to do the opposite of everything I've been trying to horrify you with above. They engaged their next-level leaders, presentations to them were interactions, they were doing real performance coaching, they were open to feedback, they confronted each other on most issues. And their business was growing about 30% per annum, and the return-on-capital was astronomic. Despite that, in a session I was helping them with, someone asked about the success of a particular internal initiative. He expressed concern and even doubt about how it had been implemented. Boom! We had a field day!

People started sulking that they had worked so hard. Sponsors of the project who agreed to fund it, started saying that right now we need to appreciate all the work done, not demoralise people by expressing doubt. Others leapt on them saying everyone had been briefed throughout and they needed to change their perspective.

I had to intervene and point out that we were together to strengthen alignment and team trust. That irrespective of when they were bringing it up, or even if it was their own fault for being confused, when at the senior-most levels you had disquiet, you couldn't (or at least 'shouldn't') browbeat it into silence.

I went on: "If what we're saying is true about the achievements and results of the initiative, then we should be confident of being able to explain it to everyone's satisfaction. If we feel this after-the-fact sniper fire is endemic in our culture, then let's look at how we could have gotten more wide-scale participation earlier."

I also stressed that there were real 'learning culture' and 'performance culture' insights available here. I pointed out that everyone was united in the belief that the intiative should deliver value (those questioning were worried it wasn't currently, those defending felt it already had and was now ready to do so in a more extensive way). If we could focus on making sure that actually happened NOW, then the believers and doubters could collaborate and focus on that together instead.

This story had a happy ending. They essentially at that point 'did' choose to collaborate, and the advocates became less holier-than-thou, and the critics got off their perch, and everyone rolled up their sleeves and decided to extract the value they had signed up for. Why do I share this? Only to demonstrate how quickly this could have become a situation where the dissenters shut up and went underground with their upset, and the proponents went off feeling betrayed, and those who had been running the initiative bristled at the lack of appreciation, etc. Then, everyone would have stiffly moved on to lunch, made polite conversation, and angry muttering would have been heard offline and all kinds of prejudices would have matured. And all because someone couldn't candidly share their disquiet, without threatening the 'morale' of everyone else!

I said they were a great team, they are. They proved it by turning it around very quickly when challenged on this. They were mature enough to spot what they were doing, and to transcend these left-over reflexes from the past. However, I showcase this to demonstrate how pernicious this fear of candor can be, and how difficult to fully move past.

So, facing all of this, what are we to do? How do we create a great team ourselves, a winning culture permeated with constructive and creative candor?

First, share everything you possibly can, with everyone who can and should matter. Many companies have instituted open book management, whereby every employee comes to understand the finances and profitability of the company. From Semco (Ricardo Semler's marvelous exemplar company in Brazil) where unions voted to roll back a wage increase because they share in profits, and could now assess that would be better for everyone; to YUM (the new organisation that owns KFC, Taco Bell, A&W,Long John Silver's etc.) where team members were galvanised by seeing unambiguously the impact of each food item that was burned or improperly cooked on the profitability of their operation; the results of open-book management have been tremendous. The more people know, the better they can act like 'intrapreneurs' (people working enterprisingly within a company).

Second, encourage what we call 'radical' conversations. There have been a flood of business books trumpeting 'fierce' conversations, 'crucial' conversations, and many variants in between. We call these conversations 'radical', because their transformational power comes from their going to the 'root' (radical comes from 'radix' meaning root) of the issue or opportunity. As the author of FIERCE CONVERSATIONS puts it so powerfully, a relationship is essentially a set of conversations. Relationships are built up or torn down, therefore, one 'radical' or 'real' conversation at a time. The quality of organisational life and leadership is to some extent the candor and intensity of the 'real' conversations taking place ongoingly. The more 'boundaryless' (a la GE) such conversations, the better.

One of my colleagues visited a company to try to assess what their '3 a.m. issues' were. By this we mean those things that keep senior leaders awake at night, fretting. The HR person indicated imperiously that nothing kept HER awake at 3 a.m. Perhaps she was being pedantic and literal. Perhaps she felt outraged that anyone could impugn the profundity of her sleep. Or else, as ever, she either didn't KNOW the real issues (hence her blissful sleep) or didn't want to share it with us (which is rather like talking to a tennis coach and trying to conceal the fact that you have a lousy back-hand).

There are ALWAYS some 3 a.m. issues, for those who are creating the future. Check in to see how clearly aligned you and your team are in identifying and understanding these. And make sure these have emerged from wide-scale engagement, not from self-absorbed flip-chart filling in sterile hotel rooms among a small cabal of senior folk.

Another way to increase candor is to ensure that meetings with staff always involve time for feedback. Discussion of 3 a.m. issues for example. Ask the team to ask their people if there's a real sense of direction and purpose in the company. Ask them to come back and report either way and have a 'radical' conversation accordingly.

Get out among customers and find out how they feel treated and listened to by your employees. How customers are treated is probably the best report card of how your team actually feels about how they are being treated and listened to in turn.

Get a group of people at different levels of the company to report back on the 'elephants in the living room' that everyone 'smells' but often tiptoes around or doesn't allude to. Finding out these taboos, these unspoken insanities, and dealing with them, can release a whole flood of passionate engagement.

Let me supply an example of the above. I was helping to run a global session for a Fortune 500 company in Phuket some years back. Their top global teams were gathered, the global CEO was there, along his top team from the US. The idea was to celebrate success, kindle team spirit, and create a real sense of shared direction and synergy. Yet I noticed that when we did any of the team-building exercises, the US top team seemed to excuse themselves because they had an 'important meeting' to attend. Funny, I thought we were AT the important meeting they had come to attend!

Some of them would return and watch as spectators, 'not wanting to get their hands dirty', I suspect. The fact that this asserted hierarchy and a tiered structure just as we were promoting unity and esprit de corps seemed not to faze them. Even at the social gatherings, everyone ate in country cliques. Then we went into the ballroom, and there were ample slides about 'diversity', and 'globalism', ad nauseum. I thought I was in the middle of a Monty Python sketch for sure.

Everyone seemed to feel the same way as I chatted with them, but no one said they would bother to bring it up, as it clearly wasn't important to their bosses. How much money had we spent to cement THAT feeling!

The teams that came universally said they, as teams, got a lot out of the work we did with them. But I'm sure, the sense of a LARGER team, was only mildly fostered, because of the above. I told the 'International Director'. He seemed absolutely shocked, then nodded, then gulped, and then vigorously shook my hand, thanking me profusely for this 'insight'.

Despite heart-felt testimonial letters and enduring relationships with some of the people that attended that Conference, I feel quite sad about what I've described. Leadership becomes absurd when the most patently obvious and shriekingly inconsistent actions can't even be stated by senior team-members to each other. So, uncover these, gather these, offer prizes for the most absurd examples, and go to war on them. Each of these contain pockets of trapped creative energy, and a vast storehouse of credibility can be tapped once these are addressed.

Keep a private count of how many contrary ideas you hear each week. Ask your senior leaders too. Ask them to indicate who pushes back intelligently. Ask for specific examples of this. Look at your leadership pipe-line, how many up and coming leaders are blatantly yet meaningfully outspoken -- ie. on 'principle' grounds, not just to show off?

Get team members to ventilate some of the coffee room discussions they've heard most that month. What are people groaning about, or cynically chuckling about? Have these things been aired, debated, brought up? If not, we're wasting time, energy and exceptional opportunity.

It all starts with TRUST. We will be candid when we can trust those we are being candid with. As a leader, you can start modeling that to your team. Ask tough questions, raise the prickly issues, listen deeply to the 'source' not the symptom of people's upset.

The best way to build this trust is to realise that candor does not equal confrontation. Candor means facing what is, the good and the bad. So why not begin with the easier half, with APPRECIATION? Perhaps the real 'biggest secret' of leadership and management is appreciation, it is the single most underutilised mode of interaction in virtually every corporate environment.

If you can begin genuinely appreciating what people do well, confronting the truth about what isn't going so well, will be far easier. People will be less defensive, their self-esteem will be more robust, their belief in themselves will have them seeking ways to improve further. As you appreciate people, they realise you are on the side of their growth, that you want them to WIN. Hence when you ask them for their input, their ideas, their honest assessment and feeling, they are far more likely to trust your intent, and begin to open up. As they open up, new potential opens up with them.

Then, if you can make heroes out of those who speak truthfully and openly, yet constructively and with a healthy future-focus, more and more people will realise that this is how to 'win' in your leadership culture. Plato told us millennia ago, 'What is honoured in a country will be cultivated there.' This is as true in a company.

Assume we have a brand that has potential. Assume we have enough capital to make a go at growth. Assume that we have some talented people, and can attract even more. Assume that we have leaders who have some ability to help our organisation succeed. Assume we have at least some goodwill with customers, and some markets we have exciting opportunities in. Assuming all that, then whether it will all 'work' comes down to whether energy goes into performance and innovation and productive collaboration or into evasiveness, politics, and tap-dancing around tough realities.

Essentially I believe most of you who are reading this have companies with a lot of the above advantages. But equally, at your level, I believe most of you have competitors who also have a lot of the above advantages. In a competition between talented companies, those that create stronger (read candid, and therefore energised) partnerships between their people, those who have better and truer conversations -- will create more successfully, will execute more powerfully, will be the ones who really WIN!

MAY YOU HAVE A MONTH OF EXCITING CANDOR AHEAD!

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