When the 2009 financial crisis hit my company I was confident we could ride it out. We had endured a pretty rough ride but our revenue was well up year over year. Sure, it was revenue that was harder to find but we did it. Then early 2010 happened and 3 months after our best year on record the company was in peril and we were forced to do layoffs.
Learning to be a leader in good times is easy. Every initiative works. Mistakes aren’t deadly. Up and to the right is a great place to be. Optimism abounds and leaders spread that around to anyone who will listen. When things go well leaders are at their most transparent.
It’s when things start to turn for the worse where leadership stripes are earned. As numbers slow and tension mounts, great leaders step up and remain transparent. The tension inside a workforce is cranked up when the leadership goes silent. They see what is happening. They see orders slowing. They see stress on the leadership of the company and they feel it. The need for leaders to not sugarcoat things at this point is the peak of leadership.
At the beginning of 2010 we noticed a dip in response rates from our top customers. Where immediate replies were the norm, they were now taking up to 3 days to respond. Payments used to arrive on time, now we were getting new payment policies of 60-90 days. Something had changed. I did what I thought was right by hunkering down with my sales and accounts teams to figure out how to move forward. They could feel it. Something was wrong. I could feel it. Something was wrong. My biggest mistake was to hold on to the responsibility to solve this issue by myself, which in hindsight was unsolvable by me alone. I slowly recoiled and kept things close to my chest. When we met with the team I did not tell them the bad stuff. I focused on the good. 60 mouths to feed plus their families. They didn’t need to know the real deal.
This was the biggest mistake I’ve ever made.
There were arguments floating in my head that I’m sure you’ve had with yourself. As a leader it is your responsibility to ensure the health of the business. That is true. That burden is the thing you took on when you accepted the role. However there are a number of ways that you can do this. You can sugar coat reality and let everyone go about their business like nothing is different or you can enlist the team to help, to contribute, to change the way they operate in order to live another day to fight again. This is where transparency is the greatest asset a leadership team has.
Can you be too transparent?
My thinking at the time was clearly clouded by worry. If I told the team the truth about what we were seeing surely they would jump ship. Find work elsewhere. Leave. So I kept silent. The last thing we needed was an exodus. That would be like digging our grave another foot deeper. The thought of being this transparent scared me into not doing it.
I was wrong.
The thing that I was missing in all of this was that the people I was hiding it from were the same people that bled for me when things were better. They were adults and adults make up their own minds and by not giving them all the facts, I was depriving them of that decision. Sure, some would have left but that should have been their choice to make. Not mine.
There is a feeling when you are transparent at all times and I know you’ve felt it before. You have nothing to hide. There are no backroom conversations. There is no leadership guilt. You don’t have to “remember who you are talking to.” You just lead by trusting the people you have around you. They got you here. They’ll help by showing up or leaving. It is their choice and the only way you can allow them to make that choice is to be truthful and transparent.
Is translucent a better option?
I was told once that as a leader you needed to bring the optimism and leave the negative conversations to be among other leaders. This is what I was doing in 2010 and I know where that ended up. You need to be able to read the people and understand their ability to digest the news and move forward with it. Transparency is important but, if its bad news you are being transparent about, the optimism comes from the plan that follows the news. People will make their own decisions about how that news impacts themselves. They are grown up. Hiding bad news won’t make them stay at a role any longer than telling them about it. You can’t shield people from the truth because when they find out, the trust and credibility you’ve built as a leader is gone.
Leadership failure is a loss of trust. By obfuscating the truth or layering over it with too much false optimism you’ve moved from leader to charlatan.
There comes a time when every leader faces a moment where they have to decide how transparent they should be. It was my time in early 2010 when I had to tell my team, the team that went to war with me, the team that I loved, that we were in trouble. I had to do layoffs. It was the most painful time in my life. By not being transparent to my team throughout, I let them make decisions about their lives without the whole story. One of the people I laid off had just bought a house, his wife at just lost her job and they were expecting their second child within weeks. He didn’t see it coming because I was not transparent.
Later, when I took over a company in challenging times, I sat with the team and showed them our bank balance. I said, here’s where we are, here’s how long that buys us and here’s what we are going to do. The choice was theirs to stay or go. To get to work or find work. That team was a dream team because we were all fighting together AND they knew where the company stood.
You’ve built the team that surrounds you. This team is fighting for you because of you. The worst thing you can do is not trust them to fight harder and dig deeper when the time comes. Sure, people will leave but those that stay will stay because of the way you have led them, because they trust you and that is a team worth building.
Respect your team by giving them a choice when it actually means something.