The Hard Thing About Hard Things
Just read Ben Horowitz's "The Hard Thing About Hard Things". Here are some take-aways that I find useful.
Why It's Imperative To Tell It Like It Is
There are three key reasons why being transparent about your company's problems make sense:
Trust
Without trust, communication breaks. More specifically-
In any human interaction, the required amount of communication is inversely proportional to the level of trust.
Consider the following- If I trust you completely, then I require no explanation or communication of your actions whatsoever, because I know that whatever you are doing is in my best interests. On the other hand, if I don't trust you at all, then no amount of talking, explaining, or reasoning will have any effect on me, because I do not trust that you are telling me the truth.
[Personal commentary- this reminds me of how the staff of a well-tuned kitchen works.]
The more brains working on the hard problems, the better
In order to build a great technology company, you have to hire lots of incredibly smart people. It's a total waste to have lots of big brains but not let them work on your biggest problems. A brain, no matter how big, cannot solve a problem it doesn't know about. As the open source community would explain it, "Given enough eyeballs, all bugs are shallow."
A good culture is like the old RIP routing protocol- Bad news travel fast; good news travel slow
If you investigate companies that have failed, you will find that many employees knew about fatal issues long before those issues killed the company. If the employees knew about the deadly problems, why didn't they say something? (Personal commentary- think NASA or Boeing) Too often the answer is that the company culture discouraged the spread of bad news, so the knowledge lay dormant until it was too late to act.
A healthy company culture encourages people to share bad news. A company that discusses its problems freely and openly can quickly solve them. A company that covers up its problems frustrates everyone involved. The resulting action item for CEOs- Build a culture that rewards, not punishes, people for getting problems into the open where they can be solved.
As a corollary, beware of management maxims that stop information from flowing freely in your company. For example, consider the old management standard- "Don't bring me a problem without bringing me a solution." What if the employee cannot solve an important problem? For example, what if an engineer identifies a serious flaw in the way the product is being marketed? Do you really want him to bury that information? Management truisms like these may be good for employees to asipre to in the abstract, but they can also be the enemy of free-flowing information- which may be critical for the health of the company.