Could This Happen At Your Company?

Have you been blind-sided by something your staff (or even customers or vendors) knew and failed to tell you? In a survey published in 2013 by Kapta Systems, 38% of CEOs interviewed had been blind-sided by a negative surprise in the last 90 days.

The 315 page report by Anton Valukas to the General Motors Board of Directors regarding the ignition switch recalls that was released earlier this month, highlights this problem and the dangers of a culture that is resistant to raising issues and moving bad news up the chain-of-command.  While the report found that top GM management was unaware of the problems, it did identify

a number of cultural issues which contributed to allowing the problem to go on for so long. While top management may have been cleared of having direct knowledge they must, in my opinion, take total responsibility for the culture that contributed to the problem.

Most certainly this case will become a staple in business textbooks at universities across the country. The bigger question is whether companies – big and small – will hear the wake-up call regarding the importance of culture and the role of leadership in purposefully creating a culture that fosters open and honest debate and discussion.

Could you as a business owner, CEO, or department head be surprised by something your staff (or customers or vendors) knew and failed to tell you? The answer is most assuredly yes. It could happen to any of us. And while the consequences may not cost lives – as they did in the GM case – they could none-the-less be devastating. We may not be able to eliminate the risk entirely but there are steps we can take as leaders to minimize both the risk of it happening and the severity of the consequences.

How Vulnerable Is Your Company?

To determine how vulnerable your company (and you) are to being blind-sided by unpleasant surprises ask yourself these questions:

  • How often are questions asked and by whom?  The fewer questions being asked and the fewer the number of people asking them the more likely that you will be blind-sided by unpleasant surprises.
  • When questions are asked is anyone really listening? Failure to listen can lead to negative surprises – even though you may have been told.
  • Do you have a tendency to shoot the messenger? People won’t risk sharing bad news if the response is anger, blame or defensiveness.
  • Do you get all your information from direct reports? Information that comes through others is by its very nature filtered.
  • Do you view the chain of command as sacred? The chain of command is important but there are times when it should be “busted”.
  • Do your “rewards” and “punishments” motivate people to share bad news? It’s not what you say that motivates people to share information but what you reward and punish.

Five Steps You Can Take To Avoid Negative Surprises

  1. Ask Questions and Listen: Model the behavior of asking questions in a non-threatening way and listening. Encourage your team to do the same – even encourage them to question you. You may be amazed at all the benefits of this one change alone. Don’t just focus questions internally. Ask questions of vendors and customers as well.
  2. Interact directly with staff at all levels: Don’t depend on others to bring you information. Interact directly with staff as well as customers and vendors.
  3. Let people know when it is OK to “bust” the chain of command: Give people permission to go outside the chain of command and reward them for doing so.
  4. Seek out problems: Reward staff for the early identification and upward communication of problems. The earlier you know about problems or potential problems the more likely you are to be able to solve them with minimum consequences. Again, include customers and vendors in your quest to identify issues.
  5. Develop a Cohesive Team: When a team is cohesive there is open, passionate and sometimes even heated debate. People say things like, “I messed up.” “I was wrong.” “I need help.” “We have a problem.” People are encouraged to wander into others’ areas of responsibility and to ask questions. What’s going on in someone else’s department is everyone’s business.

Of all the steps you can take to avoid negative surprises, I have found building a cohesive team can have the biggest pay-off. If you are interested in finding out more read The Five Dysfunctions of a Team by Patrick Lencioni. If you are committed to building a cohesive team click here to find out how you can bring The Five Behaviors of a Cohesive Team™ to your organization today.

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POSTED ON: Strategy and Vision