CHAPTER 6

Tell ’Em the Truth

We adopted a philosophy that we wouldn’t hide anything, not any of our problems, from the employees.

—Rollin King, founder of Southwest Airlines

Truth or Consequences

Few things abound within the employment arena that are more poisonous than insincerities, half-truths, insidious omissions, and just plain lies. One of the principal reasons the truly great companies find themselves atop the summit of success year after year is because they go to great lengths to avoid confusing people by lying to them, particularly those people who are or aspire to be on their payroll.

If you care about your people, you make it a point to tell them the truth, even when—in fact, especially when—it hurts. Good leaders endure personal discomfort to deliver bad news in an up close and personal way.

I once had a conversation with Dennis LeStrange, then a business unit leader with IKON Office Solutions (a Ricoh company) immediately after his return from a meeting in which he had informed a group of employees that their office was being shuttered. Admitting that it was a difficult meeting and that he could easily have sent a subordinate manager to handle the task, he recognized that people needed to hear the bad news quickly rather than read it in an e-mail or hear about it on TV—and that they deserved to hear it directly from the person who had made the decision.

Frequent flyers share a universal perspective on flight delays and other travel disruptions to which too many airline personnel seem oblivious. We know that pilots can’t control the weather any more than gate agents can influence crowded runways or flight attendants can prevent a hydraulic problem from grounding the flight upon which we were desperately counting to get us home. But we do ask for the truth—in enough time to be of value.

Like many of you, we get to work by air many days, and we’ve noticed—especially in the past couple of years—a concerted and deliberate effort on the part of the people of Delta Air Lines (the carrier we fly most often) to provide passengers with more timely, truthful information. When they’re on their game (which isn’t every time, but often), they’re likely to tell us:

• What’s going on
• What they think’s going to happen as a result
• Their best estimate of when we’ll be on our way
• When they’ll get back to us with more information

That’s all we ask. And it’s all that most reasonable people who look to you for leadership at work ask as well.

A Truth Recession

No period in recent history is more teeming with examples of the failure to tell the truth than that associated with the global financial crisis of the late 2000s and the great recession that followed. A prominent member of the United States Congress told the nation that mortgage giants Fannie Mae and Freddie Mac were “fundamentally sound” and “not in a crisis,” when he should have known the opposite to be true.1 The consequence was the failure to properly govern and regulate the two government-sponsored enterprises, which contributed substantially to the subprime mortgage meltdown that caused much of the economic pain that ensued. To be fair, the lack of truth-telling was endemic to much of Congress, the cabinet, and the White House. And it didn’t stop there. Had those at the top of Bank of America, Lehman Brothers, AIG, Countrywide, and countless other companies, large and small, told the truth to investors, employees, and customers, the history of those years could almost certainly be written with considerably less heartache and devastation.

Partially as a result of these high-profile breaches of trust (along with many others you and I never heard about), there’s more than a healthy degree of mistrust among workers (not to mention customers and investors) in leaders, at all levels, and in all kinds of organizations—business, government, religious, and educational institutions.

Trust in those around us acts as a powerful lubricant. It accelerates our work, thoughts, and processes, and the absence of it puts a measurable drag on all that we do. People simply can’t execute with speed and precision when they’re operating under an excess of dubious assumptions. The contrast between working in an environment of trust and its opposite is analogous to that of driving on a reasonably straight highway on a clear, dry day versus doing so on a serpentine mountain road on a foggy night.

A 2009 poll that worldwide research firm YouGov conducted in the United Kingdom reports that only 15 percent of respondents felt that their employer had communicated news about job security “very well,” while 37 percent said communication had been “poor” or “nonexistent.” In the same poll, less than half (48 percent) of respondents said they had a clear picture of their company’s performance, and only 28 percent said that they trusted messages from their chief executive more than “a little.”2

And as PepsiCo chief executive officer Indra Nooyi wisely stated, when there’s a crisis of trust, people “may not differentiate between guilty and innocent parties—everyone in corporate America could take a share of the blame, deserved or not.”3

The truth of Nooyi’s observation means that the people and organizations we lead could probably benefit from an extra measure of vigilance on our part, with respect to telling the truth. We simply can’t expect people to be candid with us and tell us what we as leaders need to know if they can’t rely on us to tell them the truth—good or bad.

A lie gets halfway around the world before the truth has a chance to get its pants on.

—Winston Churchill

Although the preceding quote gives us a good chuckle, we think that had Mr. Churchill lived in the Internet age, he might have reversed the positions of “a lie” and “the truth” and said even more of a mouthful. Think about it; there’s simply no way to hide the truth these days. Never mind the “news” media, any reasonably functional 15-year-old with an iPhone and Google can get at information—true or not—in less than 5 minutes! Before you’ve had a chance to craft a “reasonable explanation,” your audience has already formulated an opinion. No greater argument exists to compel leaders to get out in front and speak the truth.

During a self-imposed out-of-town blackout to maximize task focus while writing this book, my brother had a surprise hospital visit as a result of something that had the potential to be serious. My family hesitated to let me know, not wanting to break my concentration. Figuring, however, that I’d probably learn eventually, via one electronic portal or another, they went ahead and called. There is little doubt that, just as in the workplace, it might have been easier for them to conveniently remain silent and let me find out later. I was glad they decided that I could handle the truth. Your employees can, too.

Truth isn’t always beauty, but the hunger for it is.

—Nadine Gordimer

The Strength of Coffee, Steel, and the Truth

Telling the truth often requires courage—the kind of courage plucked up by Starbucks CEO and Fortune’s 2011 Businessperson of the Year, Howard Schultz, when he took on the role of political activist. In September 2011, Schultz publicly declared his disgust at the dysfunction of the government in Washington, DC, pledged to withhold political action committee (PAC) money from incumbents of both political parties, and encouraged other CEOs to do the same. A few weeks later, he announced in full-page ads in both the New York Times and USA Today that more than 140 other CEOs had joined him in his crusade. Since political contributions are the currency with which legislative influence is bought, Schultz’s speaking truth to power displayed considerable and respectable backbone.

Other truth-tellers include Nucor (the largest steel manufacturer in the United States) CEO Dan DiMicco, who along with his predecessors has cultivated a habit of keeping faith and being honest with the company’s employees. The truth of late hasn’t been pretty, as the recession has hit the steel industry in a particularly vicious way. Through it all, however, Nucor has remained transparent to its workers and has protected their jobs. They’ve never laid off an employee due to a work shortage in their history. Nucor employees have returned the favor by never once voting to unionize in an otherwise highly unionized industry.

Nobody’s Perfect

Neither employees, customers, nor other stakeholders expect us to get everything right all the time. Yet people will forgive all kinds of imperfections in their leaders—boneheaded decisions, bad calls, even momentary lapses in humility—before they’re willing to grant a pardon for being dishonest. A good old-fashioned apology, coupled with a humble acceptance of responsibility, can turn many failures into opportunities for redemption.

You don’t have to be a huge fan of Facebook or its founder Mark Zuckerberg to appreciate his honest response to a misreading of customers’ desires a few years after he launched the social networking service.

“We really messed this one up. When we launched News Feed and Mini-Feed we were trying to provide you with a stream of information about your social world. Instead, we did a bad job of explaining what the new features were and an even worse job of giving you control of them. I’d like to try to correct those errors now.”4 Judging from the steady growth of Facebook’s wealth, footprint, and influence in the world, we’d say that most customers let go of the grudge.

Liar, Liar

Now, we are not suggesting that the whole world gets up in the morning and says, “I think I’ll go to work and tell a fib today.” Lying is (usually) not that deliberate or direct, yet it frequently seems second nature in workplace situations, and to be honest, it often starts before the person is even hired.

Most managers walk around with the well-founded suspicion that people are going to lie to them from the start—even during the employment interview. And many do, to be sure. But how often do they receive the same in kind before the interview is even halfway through? Consider whether the following exchange sounds familiar:

The principle of “truth or consequences” is certainly simple enough. Yet companies violate it regularly as they spew forth one philosophy while practicing quite another. We’re merely suggesting that PR should take a distant backseat to honesty—especially when it comes to communicating with your workforce. If your company is a tough place to work, say so, and be very explicit in explaining why and how. And don’t apologize for it! If your business is in trouble, say so. And for Pete’s sake, if an employee is screwing up, tell them. That’s what managers get paid for. Either step up to the plate or go sit in the dugout!

Seeking to avoid the shackles that unionism and our judicial system have imposed over the past decades, American industry—largely at the urging of HR practitioners and labor attorneys—has adopted an overly conservative (some might call it mealy mouthed) approach to dealing with employee performance issues. The atmosphere of caution is so pervasive that while tiptoeing around possible charges of discrimination, favoritism, wrongful discharge, and the like, managers have often completely lost sight of the mission at hand—namely, fixing performance errors! And yet we wonder why it’s so difficult to improve things like quality and productivity and why people get so upset with us when we finally do tell them there’s a problem with their performance.

Malice in Wonderland

We did some work for a company whose identity we’ll protect by calling it Giant. With nearly $2 billion in annual revenues and an employee population near 40,000, the company was sizable indeed. However, because they terminated the services of a high number of employees for performance-related reasons, Giant’s management determined that they had a problem. For example, they fired some 986 people in one 18-month span—not due to egregious transgressions such as lying, cheating, or stealing, but simply for doing a crummy job. Tasked by the CEO with looking into this and coming up with some answers, we began investigating the situation. We searched in all the usual places and talked to all the usual suspects—some of the “firees” as well as the managers who had done the dastardly deeds. We combed through HR records, examined hiring practices, and did a robust search through Giant’s rather sophisticated HR information system.

At some point, we learned of “Giant’s Performance Review Policy,” which was pretty standard: it required formal written reviews every six months until death or termination. A staff member sifted through the HR system, trying to find a correlation between poor reviews and the terminations, but quickly returned with the news that there was “obviously a flaw in either the data itself or the search parameters, as no correlation could be found.” Wait a minute! Upon further review the conclusion was the same: no correlation between the reviews and the terminations. Giant managers had dutifully conducted performance reviews with every one of these 986 people in the six months immediately preceding their termination. However, they had informed the employee that they were doing an unsatisfactory job in only three of those cases. Roughly two-thirds of these same people had also received merit increases in the six months preceding their termination. As sad is it is, what was happening at Giant is more the rule than the exception. In fact, it’s probably going on right now in your company. Go find out!

Not Every Performance Deserves a Standing Ovation

As a big fan of musical theater and the parent of an aspiring performer, I’ve been to lots of shows. In my experience, most performances in the United States (unless embarrassingly lousy) receive a standing ovation, deserved or not. Once in a while, after a truly remarkable performance, the standing O is spontaneous, immediate, and unanimous. More often, it starts with a few enthusiastic supporters, then those who think, “Yeah, that was pretty good. I guess I’ll stand like these other people,” and finally a more reluctant group who stand so they don’t look like soreheads.

On a recent visit to the United Kingdom, my wife and I attended a well-done performance of Rodgers and Hammerstein’s Oklahoma! At the end of the show, the audience showed its intense appreciation with thunderous and sustained applause—from a seated position. The cast took their bows. The audience kept clapping and whistling . . . and sitting. It was altogether appropriate feedback for the performance. Although worthy of such applause, it was not among the very best I, or apparently the rest of the audience, had ever seen. Don’t get me wrong. On a scale of 1 to 5, it was a solid 4. But standing ovations, like the top rating on a performance evaluation, should be reserved for those performances that are truly distinguished in their excellence. We’re not telling the truth when we give everybody a “5,” “Outstanding,” or “Consistently Exceeds Expectations”—and as a result, it cheapens the feedback that an evaluation is meant to impart. I imagine that the Oklahoma! cast left the stage that night thinking something like, “We did well, and we can improve even beyond that. And maybe we’ll bring them to their feet if we do.”

We’re all for positive feedback. However, we’re even more in favor of accurate, helpful feedback. You want your employees to know you as a straight shooter. Tell someone when he or she has room for improvement, and then help them get the rest of the way. We’re doing no favors when we tell people they’ve reached the summit, when the summit is actually still just a few yards away. Reserve the standing ovations for those performances that are truly in a singular place at the top. And don’t be afraid to stand and clap when you find them.

The trouble with most of us is that we would rather be ruined by praise than saved by criticism.

—Norman Vincent Peale

To Tell the Truth

Before we leave the subject of truth-telling, we’d like to offer some practical help on ways to make it, if not easier, perhaps a little less painful to tell people what they deserve to hear when the news isn’t packed with fun.

I didn’t lie to anyone.

—Don Shula, when asked what he’d like to be remembered for

Chapter Summary

Worst Practice:

Notes

1. Rep. Barney Frank, House Financial Services Committee Hearing, September 10, 2003.

2. Alec Mattinson and Matt Cartmell, “Firms Fail to Reassure Employees Find an FD and YouGov Report,” PR Week, June 3, 2009.

3. “Business Has a Job to Do: Rebuild Trust,” Fortune, May 4, 2009.

4. Mark Zuckerberg, chief executive, The Facebook Blog, September 8, 2006.