Behind the Glass Wall, Part II

Part I of this series mapped the Alignment Gap between owner and employee mindsets. We saw that closing it requires good intentions and a willingness to shoulder a load. But it can also demand an acceptance of uncomfortable truths, leading to a transparency paradox.

Ode to the truth

Truth is one of the few technologies that reliably and profoundly improves a life—and relentlessly punishes the dishonest. The truth never contradicts itself; it is always internally consistent. Tangled webs of deceit become unnecessary. A commitment to the truth helps you to navigate all manner of future difficulties and misunderstandings, because your actions and choices, even when they turn out to have negative consequences, can always be explained in rational terms that people will be able to understand.

The truth will inevitably reveal faulty logic, personal weakness, poor decisions, and insufficient consideration, among other things with which we’d rather not contend. It’s completely impervious to protests over the pain that accompanies its lessons. Perhaps you’ve felt the echo of its familiar pattern: illuminating your folly, slapping you silly, and tossing you mercilessly into a foul, dark cavern, with nothing more than the tiny flashlight of humility with which to desperately clamber back to relative grace.

Despite this savage treatment, a commitment to the truth is the only way I know to enter into harmony with the world. And the most uncomfortable truths are often the most useful: the painful moment of regret coincides with the opportunity to abandon a wretched part of your soul and make a change for the better. Stray from the path and the truth offers a choice: writhe in frustration and discord, or integrate its lessons and rediscover your place in the natural order. Not much of a choice, really, though I’m fairly certain I’ll continue to audition both approaches.

Consistently seeking the truth, speaking it to others, and being honest with yourself, offers a wild bounty of gifts. Here are four:

• Better solutions: Awareness of a set of true facts associated with a problem is usually the first necessary step in a winning strategy to design a good solution.

• Deeper bonds: The truth seeds and nurtures an unshakeable, lifelong trust in your relationships, which you can depend on in times of need. A high-value reputation is also on offer.

• Personal growth: Denial keeps you stagnant. Honest self-assessment is the prerequisite for personal evolution.

• Cognitive relief: You are able to live life freely and out in the open, weaving yourself into the natural order as you grow, cultivating aliveness, gratitude, and inner peace.

Philosophically speaking, the truth leads you to the only vantage point from which you can really experience the intrinsic beauty of life’s perfection, and your place within it. In a business context, however, this might be an unnecessarily lofty goal. Further, the whole truth in corporate communications can also have unintended negative effects.

Buzzword bingo

At Jonah Group, we generally took a “more is more” approach to information sharing than many traditional companies, and spent more time and effort on this because we felt it produced better alignment. Our staff was often surprised at how much we did share, often indicating to us that they’d never seen that sort of thing before. But there were good reasons for this.

Sharing the ownership structure of the company helped staff to trust and understand the motivations of decision makers. Exposing company revenue projections helped staff to understand the underlying trajectory of the business, and the risk we all took together in continuing to work for it. Knowing company profit explicitly told staff how they were sharing in the pain or the spoils as a contributor to the company. It also allowed them to contextualize and value investments we’d made in the business. Knowing bill rates for staff members helped directors to optimize costs and revenues for their projects. And explaining bonus calculation formulae allowed staff to reverse engineer their performance attribution from their actual bonuses, aligning payouts with the results of their annual reviews.

In the larger corporate world, however, “Transparency” is such a pervasive value buzzword that it has unfortunately become devoid of any real meaning. Leaders and employees alike love to talk about the importance of “embracing transparency,” but much of the time the value is only partially lived, or it’s wielded so inappropriately that it destroys the intended benefit.

Image generated by Gemini

This to say nothing of the fact that “honesty” is what branding experts would call a “Pay to play” value — i.e. you generally have to be largely honest in your communications to have the slightest chance of having a healthy business. It need not be present in a list of differentiators.

Employees will also avoid speaking up because they fear the potential repercussions of being outspoken. Managers justify the need to spend an inappropriately gross tonnage of time collecting status by referencing the “need for traceability and transparency.” If the reporting of so-called “bad news” can’t be avoided, it is often couched beneath the protective dome of “being transparent,” the only problem being that it likely wouldn’t have been reported at all if the opportunity to hide it was still available.

I worked for a company that claimed “Radical Candor” as a core value, but which (as far as I could tell) sometimes struggled (as we all do) even with “regular” candor. It’s not that our leaders didn’t have good intentions; it’s more about the fact that whoever put that on the values list didn’t really wrestle with the thorny problems that living up to that value entails.

People usually state a preference for the truth even as we swim in a soup of falsehoods. All the same, we must admit to ourselves that society is largely built atop a fabric of lies. Some lies are simply social lubricant (”I love your new hairdo”), some are understood to be exaggerations (”the best fried chicken ever made”) some originate from a self-serving, willful neglect (”tobacco isn’t bad for you”), and some are outright malevolent (e.g. character assassination). Lies exist on an infinite moral continuum of grey shades. There are thousands of reasons to lie... but are there any good ones? That’s a query for each of us to ponder.

The case for lies

One clarifying question is “is this truth constructive to the particular moment?” If the truth is destructive, it should probably be heavily tempered or simply omitted. On the other hand, if the truth is on balance constructive, even though it may also be potentially painful or offensive, then we should prepare to spend time and effort communicating it and working through the resulting fallout.

Employees are often upset with owners or leaders because they get the feeling they’re being misled, or at least that important information is being hidden from them. You may have guessed that my somewhat lengthy preamble to this point is meant to contextualize a discussion on when transparency can’t easily be employed by leaders. The point here is to give voice to the difficult choices leaders have to make in navigating this terrain.

In unhealthy organizations, leaders may hold the reins tightly on the flow of information, or skip the truth entirely because they understand that knowledge is power, and they prefer to be the ones wielding it. For the record, this isn’t the kind of company I’d want to lead or be a part of. But this doesn’t mean there aren’t sometimes good reasons for leaders to be circumspect.

My (hopefully obvious) motherhood stance is that corporate half-truths or information hiding should always in some way be constructive for the organization. In my experience, leaders are generally not malevolent, nor do they “tell lies for fun.” In designing their communications, each leader is usually setting a careful balance point between two or more competing values. The point they choose often ends up defining the culture of the organization.

Sometimes I’d desperately want to tell my staff a more complete story than I did, but felt I couldn’t for some other reason. Sometimes I couldn’t even tell them that this was the reason I couldn’t tell them, as it would be a dead giveaway for the thing itself. This was very frustrating to me, especially when people would criticize the management team over inadequate communications. And I was well aware that each such occasion chipped away at the benefits of being fully truthful, about which I’ve already waxed poetic.

Here are a few corporate scenarios that don’t lend themselves well to the full truth:

• The team may feel powerless to respond to the information being communicated.

• The inherent power dynamic makes it feel like leader opinions carry an oppressive weight. The same power dynamic also suppresses the sharing of employee opinions, owing to their fear of career repercussions.

• Hot-button topics relative to peers tend to whip people into a comparison frenzy: think bonuses, hiring and firing decisions, promotions, and all manner of people issues.

• Leaders may have a responsibility to maintain confidentiality, perhaps on behalf of another staff member. Clients might also require that information only be shared on a “need to know” basis.

• It would take far too long to rationalize and deliver the information in a way that employees would understand, not because they didn’t have the capacity to, but because that understanding would require nuanced attention, consideration, and optimization, which are often in short supply in everyone’s busy day-to-day work life.

• The marginal benefit of some additional information is so small that it’s just not a high enough priority to spend time on it.

Doubts are destabilizing

The elephant in the room is an abstraction of all of the above: transparency travels with stress. The role of the owners and leaders in a company, in part, is to make an uncertain future appear relatively certain to their team members, who probably don’t want to have to deal with any number of challenging thoughts on a daily basis. Hiding things erodes trust, but sharing them causes stress.

And that stress has real negative effects. There were many nights that I couldn’t sleep due to worry over the risk of something bad happening at our company. This was exacerbated by my desire to be unencumbered by secrets, which I also find stressful. My instinct was usually to share my worry with whomever would listen.

At one point in our history, we were moving from an office with about 20 desks to a bigger one with about 60 desks, a kitchen, den, reception, 2 offices and 2 meeting rooms. It was exciting, but somewhat of a risky bet, and I felt that keenly. Instead of hiring a moving company, we individually walked our computers and desk items from the old office over to the new one.

Somewhere along that walk an employee asked me sheepishly “so... can we afford this?” I told him “Yeah, I think so!” which generated a nervous laugh. I don’t like to overpromise and underdeliver, so I tried to explain further how I was feeling, which was both excited and stressed out, and trying to calm myself down by seeing the bigger picture. “Look, what’s the worst that can happen? The company could fail.” I said somewhat carelessly, to which he immediately exclaimed “DON’T SAY THAT!!”, the palpable worry tattooed across his face. He prodded me for more information about just how close to the bone we were. The answers to that didn’t really help, even though in reality the business was quite healthy. More nervous laughter.

I stopped talking, but thought to myself “We’re literally walking our office contents to the new place: it should be fairly clear that we run a pretty lean shop!“ In my mind it should have been painfully obvious to everyone at the company that potential failure is always lurking just around the corner. A company is nothing more than a group of people trying to make something work, together. Surely they understood that.... it might not work!

Misinterpreted information can also be potentially inflammatory, making the tone of communication extremely important. During the 2008 financial crisis, we ran into cash flow issues owing to a downturn in customer IT investments. We held a staff meeting to discuss potential risks associated with the economy, what we were doing about it, and what everyone could do to help. Days after the meeting, two people quit. One indicated that “you told us the company was in deep financial distress and perhaps even close to failure” (which we didn’t, and which it wasn’t).

There’s a reason that airline pilots project calmness and control, even though commercial flight is fraught with obvious risks. It wouldn’t be particularly constructive for a pilot to get on the horn to say that “we’re using fuel much faster than expected, and there’s a small chance we won’t make it to shore, so just to be safe, please make sure your affairs are in order.” Nor would it be appropriate for a flight attendant to walk around wearing a parachute pack while all you have is the rumored flotation device.

Image generated by Gemini

Complete openness during a crisis that everyone can already clearly see, however, is an absolute requirement for the management team. When the oxygen masks fall, there’s no longer any use in pretending. Here, care must be taken to be open, attentive, and human, and mitigating plans should be clearly and fully enumerated and expressed. The potential negative fallout from the crisis should also be named, giving full voice to the team’s potentially unexpressed worries. No matter how well-intentioned the hiding of information may be, during a crisis, a dearth of honesty implies untrustworthiness.

The same can be said of any brand communications. I’m proud to say that our marketing messages generally matched our internal messages about our brand. Companies often cite the “dangers of IP leakage” or some other such abstract risk associated with keeping company information private. The prospect of internal documents becoming public would send a bone-chilling tingle down the spines of their leaders. But what they’re really thinking is “what if someone finds out that the stories we tell our people are different from the stories we tell our customers?” I think it’s more fun to identify what you really believe in and truly try to sell that.

Beyond the daily challenges of what to share and what to withhold lies a more fundamental question: what happens when the company’s survival itself is uncertain?

Six months from zero

An ability to contemplate business failure and proceed anyway may very well be what separates entrepreneurs from non-entrepreneurs. Owners live with a low-level hum of anxiety that employees rarely hear, even after many years of apparent success. It’s a rational fear: according to Innovation, Science, and Economic Development Canada, roughly half of new businesses are no longer operating after ten years. For an owner, this isn’t a statistic; it’s a daily reality.

Jonah Group was never on the brink of collapse, but we also never really had committed forward-looking contracts beyond 3-6 months into the future at any given time, so we couldn’t really see much further than that. This always meant potentially zero revenue in six short months! We always grew organically and white-gloved our long term clients, but this was consulting... there is never any real recurring revenue. How could we know if it was going to last?

The uncertainty isn’t unique to consulting. Even the greatest pop act of all time couldn’t predict the wildly successful future that they would have, despite what onlookers might have imagined. Watch the clip below from a 1963 Beatles interview in which George, John, and Paul wonder about their future prospects.

George: I mean, we don’t know. It may be next week. It may be two or three years, but I think we’ll be… in the business, either up there or down there for at least another four years.

John: You can be bigheaded and say, “Yeah, we’re going to last 10 years.” But soon as you’ve said that you think, you know, “we’re lucky if we last 3 months,” you know?

Paul: You know, probably the thing that John and I will do will be write songs as we have been doing and sort of sideline now. We’ll probably develop that a bit more.

We always viscerally felt the ongoing potential for failure. The risk of failure exists whether or not you acknowledge it openly. It confused me when staff seemed reluctant to spend time talking about potential failure modes, and how to try to mitigate them, but later I came to realize that that’s what they wanted me there for.

Even though owners have a more direct responsibility and financial motivation to “keep things going,” it might be valuable for employees to think of this as a shared responsibility. Employment is more like throwing your lot in with a crew of sailors who are all trying to keep the boat afloat. In the end, everyone has to do their part to try to plug holes, bail water, and throw each other life preservers whenever the waves are rough, even if you don’t own the boat.

“Job security” is really a measure of how good we are at staying afloat, together. Image generated by Gemini

Even if owners are quietly absorbing the stress of potential company failure, what does this mean for the person on the other side of the glass wall? That warm security blanket may be borrowed, not owned.

The illusion of security

There is no job security. I could end this section here and let you ponder the obviousness of that claim, but will elaborate further in case that wasn’t enough.

A company’s health is based on its ability to sell business and execute on its promises while also turning a profit. If the company doesn’t do as well as it plans to, then some may have to be laid off, despite the fact that the owners probably don’t want to do this. If the company fails, everyone will be affected.

In this sense, “employment” provides an illusion of safety relative to (say) being a contractor or even an entrepreneur. While this illusion may be useful to reduce your overall stress levels, it doesn’t reduce your risk. In fact, it probably increases your risk relative to the owners, who are generally the last to be “laid off,” even if the laid off employees are more valuable than they. Sorry about that.

Contractors tend to understand this more keenly, relying on themselves to find ongoing work. They’re more likely to maintain emergency funds to deal with employer instability. They are more likely to stay current on skills and emerging technologies, as they need these to sell themselves. And they continuously cultivate professional networks outside the company. Employees should do all of these things as well.

Nothing is talked about less openly in a company than the reasons for someone’s removal. This process is fraught with legal liability, cost, high emotional stakes, and cultural disruption.

On a more personal note, I hate laying off good employees. I don’t want to do it, and I really am sorry that it’s painful for them. The employee feels like their professional and cultural identity is being ripped apart, and they now bear the burden of new financial risks, not to mention the cultural impact on the company. Additionally, the psychological toll on both the decision maker and the people conducting the official proceedings is often not understood by staff. Anyone who has ever had to do this will know what I mean.

As an owner, whenever this happens, I feel like it’s my fault for failing to increase revenue to the point at which I could retain you. This guilty feeling generally increases with the length of your tenure at the company. I usually can’t sleep well for a few weeks before and for a few weeks after. The severance payment is expensive for the company, but I hope it’s at least enough to take the edge off and get you back on your feet.

This is in stark contrast to the prospect of laying off bad workers, problem sources, or generally toxic people. I definitely won’t lose any sleep over this, and invariably, the next day I’ll feel refreshed, and I’ll have new thoughts of how to hire better next time, which is satisfying because it makes me feel like I’ve improved. Overall, I feel like I did something difficult, healthy, and necessary for the company.

Employees remaining in the company appreciate this because it reinforces what it means to be a positively contributing team member. Their work feels more meaningful, and they become even more motivated to perform — not out of fear, but because they implicitly understand that their leaders actively appreciate and manage toward good performance. The mood inside the company improves. In a larger sense, layoffs of people who “don’t fit” are an expression of company values. They strengthen the credibility of the brand, and drive shared commitment to it.

As it relates to “the truth,” my HR reps have always advised me to “say as little as possible” during “the conversation” in order to limit potential liability. I’ve always thought this to be dehumanizing, though, so I’d often ignore this advice, especially for those with whom we’d had a long relationship. I generally won’t discuss your performance if you were in the “problem” camp, since this only invites further complexity and liability, and at this point I don’t want to bother re-litigating all of the pain I think you’ve caused, with which you’ll of course disagree.

So what does reduce your risk as a good employee? A benefit of being the CWO (Chief Worrying Officer) for a company initiative is that you’ll be less likely to be one of the first to be laid off, because you’re fulfilling a difficult-to-replace management function. Other important dimensions as to who gets laid off are cost, liability, tenure (which is a proxy for institutional knowledge and cultural importance), and the leverage you gain by training and managing colleagues.

The road to heaven

I’ve never been a fan of the aphorism “The road to hell is paved with good intentions” as it seems to cast shadows on people with good intentions. Good intentions also pave all roads to heaven, and further, all roads paved with bad intentions lead to hell! Good intentions are the best we’ve got, and we can only hope our leaders have them. The good news is that most do, most of the time.

But hoping your leaders have good intentions isn’t a strategy. If you accept that some information will always be withheld, the question becomes: what do you do with the information you do have?

Even well-intentioned leaders may hide information, striving to do right by their teams. Living with that ambiguity is a condition of employment, not necessarily a betrayal. A useful diagnostic question for employees is “Is this omission protecting something important, or avoiding accountability?” The former warrants trust-building patience. The latter warrants deeper inquiry.

Try to avoid creeping paranoia about leader communications. Feel free to read between the lines, asking yourself how what wasn’t said might affect you. Think of contingency plans to mitigate negative scenarios, though understand that these may never surface, and that errors of interpretation can occur. Probe leaders with questions that invite disclosure within appropriate bounds, e.g. “what are our key milestones for the next 90 days” as opposed to “are we going to survive the next quarter?”

Leaders often calibrate information sharing based on who demonstrates reliability and professionalism with sensitive data. Not panicking or gossiping. Providing thoughtful input when consulted. Showing discretion with confidential details. Volunteering for cross-functional work. Each of these signals that you can be trusted with sensitive information — and trust, earned this way, tends to compound.

The Alignment Gap closes not when we know everything about each other, but when both sides trust enough to work with what we each have.

Part III will explore what we owe each other in return—compensation, equity, and the unspoken debts that bind us.

Next in this series: Part III — The Compensation Equation

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Text written and spoken by Jeremy Chan — a human being!

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