Crack # 2 – The Communication Crack
How often do you see businesses fail in the areas of communication. Too many people working on the same thing. No one working on the important thing. People unclear about where the business is going and what the scoreboard actually says. People don’t know whether the business or even them individually is winning or losing.
What happens next?
Management steps in and begins with the negative feedback in an effort to get things back on track. But what caused the issues in the first place? Where did the communication crack come from?
I believe there is an indisputable law in business,
“The greater the transparency, the greater the communication”.
Communication is not the cause of problems. It is a symptom. The cause is lack of transparency. And it happens in micro and macro levels in any area of life.
The father wants his children to behave a certain way but doesn’t educate them as to why. He doesn’t speak about where we are going and why it’s important. He doesn’t talk about the consequences or the long term effect if a negative behaviour was to continue. So the children are being asked to behave without any real parameters. They don’t understand the big picture. And most employees and treated the same way.
Imagine in business, contracting a supplier that you need to make 1,000 widgets. It is a straight forward order with no vision or talks about marketing, growth, direction and the future. You successfully launch your product into the marketplace and sell your 1,000 widgets. You go back to your supplier to order 10,000 more but discover they cannot handle the volume and will need 3 months to scale up, get finance to expand, hire more staff etc to meet your demand. The communication problem stemmed from lack of transparency.
Now we both understand that secrecy in business has it’s benefits – but do they justify the consequences the secrecy also carries.
Many businesses, sorry I will correct myself, many leaders running businesses operate out of fear. They won’t share cost prices and margins because they feel these things are private and secret. It’s a need-to-know basis only and some people just don’t need to know these things. The invisible consequence is that you exclude people from contributing ideas that can bring your costs down and improve your margins. Ideas are no longer just coming from the top.
An argument for the margin secrecy might be, “People won’t understand why we get paid so much margin for ourselves”. Well this comes back to transparency again. You explain to people the running costs, the security or lines of credit you need to have in place to run it, the break even point with the staff you have, the true cost of things so they do understand.
And here’s where the magic happens… people suddenly find ways to lower costs, increase margins, increase profits – they find things you don’t even see. And why would they do that, because by adding value to an organization is people’s opportunity to step up.
Human nature wants to advance. It’s inherent. But with secrecy and lack of transparency comes limitation and lack of communication.
All of it, comes back to leadership!