Monday, March 22, 2010

Does Honesty Impact Corporate Strategy?

For most business principles to work efficiently organisations require a culture of openness and honesty. But how many open and honest organisations are there?

Don’t we still teach our children to always ask when they don’t know and never to lie? If we are still teaching these basic values to our children – because we know they are right – then why aren’t we applying the same principles in business? What is there to be afraid of?

Organisations should want the best from their people and not only encourage, but demand, a culture of openness where employees don’t fear retribution or humiliation for simply being honest. In fact the very cornerstone of most business principles demand honesty – what is the point of staff appraisals, if those taking part aren’t being honest with each other; and what would be the purpose of 360 degree feedback if the feedback isn’t honest; and how can organisations evaluate their ‘real’ strengths and weaknesses, if employees aren’t honest about them? Organisations and their strategic leaders who do not strive for an open and honest culture are only limiting their future growth and fooling themselves.

It is today’s business leaders that must set the standard and continually reinforce the principles of open and honest business cultures. As Mi Troy, Chairman of Molina Healthcare, stated in a 2009 article, “There is only one agenda – the company’s agenda – and neither the individual leader nor the department’s interests supersedes it. Leaders should model the behaviour and culture they want for their organisation.”

Although, in discussion, most executives and employees will agree that they desire to work in an open and honest environment, often the biggest problem seems to be; when and how do we start to change?

The ‘when’ is today and the ‘how’ is by ensuring that ethics become an integral part of your individual and organisational vision and strategy.

Culture change must be approached like any other change initiative.

1. It must be driven by the organisational leadership, who must set the example for everyone to follow – if the leadership falter, the culture change will fail;
2. The culture change and its positive impact on the organisation must be clearly communicated to the entire organisation; as well as how the change process will take place;
3. Leadership is looking for ‘ownership’ and not ‘compliance’ of the new culture;
4. If the organisation currently operates in a climate of mistrust then the leadership must realise that although the concept may be understood and in principle accepted by the employees, sufficient time and dedicated focus must be given to ensure a fully owned and sustainable culture change;
5. The leadership and the organisation need to be patient and focus on the benefits of the end result; (without direct leadership it is to easy for the organisation to revert back to how things were);
6. As the benefits become visible to the entire organisation a critical mass will start to form. Managers, departmental teams and individuals will start reinforcing the positive outcomes from the culture change;
7. Once the ‘new’ culture takes over, it forms part of your core business principles and impacts your strategic choices.
8. The benefits of an open and honest culture, besides the working environment itself, will include a more accurate and meaningful assessment of the business environment and the organisations ‘real’ strengths and weaknesses. This will naturally lead to efficient strategic decisions that will add greater value to your future growth, compared to organisations that don’t embrace the principles of openness and honesty.

Remember, it is said, that in business, “lies may take care of the present, but they have no future,” (Cortes, 2007).


Atufunwa, B. (2009). The art of effective communication. Black Enterprise. Vol. 40, Issue 4, p.46-47

Green, C., Cortes, M.A., Cheung, C. and Kennedy, D. (2007). What are some communication mistakes that leaders make? Communication World. Vol. 24, Issue 5, p19.

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