Transparency: When It Comes To Succession More Is Probably Better
In his book, The Five Dysfunctions of a Team, Patrick Lencioni lists the absence of trust as the foundation for all the other dysfunctions. What causes a lack of trust? Although there are multiple reasons, lack of transparency is a key factor.
I know a lot of honourable entrepreneurs who are considerate of their employees, but they remain reluctant to share information about the company. They rationalize that:
- “If employees knew how close to the edge we run with our cashflow, they might start looking for what they think is a more stable job.”
- “They don’t understand finances, business or how things work. They might make incorrect and extreme assumptions; either worrying about us going bankrupt or thinking we should give everyone a 30% salary increase.”
- “A disgruntled employee could take sensitive information to a competitor.”
- “We’re a private company and certain information remains private.”
- “If they knew I was considering selling the business, it would be disruptive. They might start looking for another job; spend a lot of time talking at the coffee machine; worry about their security and their pensions. All these issues may be important, but it could get in the way of productivity – something we need now more than ever.”
Is information or the lack of it dangerous?
Perhaps the better question is: which is the least likely to cause problems? What information should you provide and what should you hold back?
If your employees and managers don’t know what’s going on how can they respond effectively? In my 35 years working with entrepreneurs, managers and employees no one has said, “I wish I hadn’t shared that information,” or “That was too much information. I didn’t want to know that.”
What I have heard is, “Something’s going on but I don’t know what.” Or “I wish someone would tell me what’s happening. How are we supposed to do our jobs?”
In the absence of solid knowledge people begin to make things up. There’s an old joke: Employees are like mushrooms. Management buries them in crap and keeps them in the dark. If it strikes close to home, then it’s no joke.
Should you be more transparent about planning your succession and transition away from the business? Thomas Deans, author of Every Family’s Business suggests that your business should always be for sale and your employees should know that. To that end, more information is almost always better than less.
March 3, 2020
Type the characters you see in the picture left; if you can't read them, submit the form and a new image will be generated. Not case sensitive.