Honesty: The Secret to Successful Organizations


Honest organizations are more successful.

At least that’s the conclusion reached by Halley Bock, CEO and President of Fierce, Inc. In a recent article, she cites a 2010 Corporate Executive study that found companies encouraging honest feedback among their staff delivered 270 percent more on 10-year total shareholder returns than other companies.

An astonishing difference, but why would honest companies be more profitable?

Fierce conducted its own investigation into the issue, and uncovered some interesting findings. After surveying more than 1,400 executives and employees, Fierce found that an overwhelming 99 percent of professionals preferred a workplace where employees were able to discuss issues truthfully.

More surprising, however, the survey found that 70 percent of the respondents believed a lack of honesty negatively impacted their company’s ability to perform, supporting the Corporate Executive Board’s findings.

So how can companies become more truthful? Surely, all leaders want their staff to feel as if they can tell the truth, but open and honest workplaces don’t happen organically.

Keep a Running Dialogue

One way to encourage honesty, Bock says, is through social networks. While most organizations try to be transparent, they often get caught in the trap of “terminal niceness,” or attempting to be politically correct at all times so as not to offend employees.

While this is a well-intentioned approach toward maintaining a civil work environment, it is actually counterproductive.

Fierce found that an overwhelming 99 percent of professionals preferred a workplace where employees were able to discuss issues truthfully.

Bock argues that employees desire communication that more closely resembles social networking. What employees want, it seems, is a candid, running dialogue between managers, employees and coworkers.

Don’t Sugarcoat Issues

Another method Bock suggests to increase openness in the workplace is direct communication. In other words, don’t sugarcoat the issue.

Some employers may think that cushioning a difficult conversation with compliments or small talk will alleviate tension, when in fact, it can complicate a delicate situation.

For instance, rather than telling an employee “We’re concerned about your attendance rate. Please try to see what you can do to remedy it,” Bock recommends being more direct, saying something like, “Our records show that you’ve been absent five times in the last two months. This exceeds the allotted three personal days we allow our employees, and any additional days you take off will be docked from your salary.

If you are absent in excess of eight days, we’ll have to let you go. Please inform us if there is a personal or medical issue and we can try to determine the best way to address the situation.

What employees want, it seems, is a candid, running dialogue between managers, employees and coworkers.

In the first instance, the employee is left without a clear idea of what steps he or she needs to take to ensure that another “difficult” conversation does not take place. In the second instance, there is a clearly defined route for the employee to follow. Although the second example might not seem as “nice,” the directness of the communication will alleviate any stress on the employee or supervisor caused by unclear expectations.

If organizations want to avoid the communication stalemate that often results from politically correct communications, they should develop mechanisms to support clear communication with employees. Set aside a time once a month where staff can discuss their questions and concerns with supervisors. Encourage open communication. Accept even negative commentary as a way to improve your organization.

After all, no organization ever improved without some constructive criticism and an open mind.

Erin Osterhaus is a Managing Editor at Software Advice, a company serving as an online resource for HR professionals seeking to buy software. Erin writes for The New Talent Times, a Software Advice blog offering tips on talent management and leadership skills to those in the HR space. Visit us at www.softwareadvice.com.

  • Love it, Erin! Thanks for the post. That first point especially, “Keep a running dialogue” …? It’s pretty basic, yet completely under-practiced by most leaders. You’ll head off a lot of trouble down the road (especially with surprise observations in annual reviews!) if you just talk to your team, openly and frankly, throughout the day each day.

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  • Ed Gutierrez

    Great post. I firmly believe in this. The benefits received from what you have highlighted are beyond valuable. We have over 1000 employees and have a high retention rate. Sorry, can’t remember the actual figure, close to 95%, which means the cost of hiring & training is deminished, along with the learning curve with errors. We are a 100% CS driven business and our front line employees get hammered at times, but they have a voice, are listened to, coached, and voila. Loyalty is created. Good, good post. Thank you

  • L Russell

    Great post Erin. I totally agree that honesty is the best policy. I would like to add a comment though, that it is also bound by cultural constraints. Working in a country where the norm is employees never question and certainly wouldn’t dare challenge any of their leaders, and never told anything until it’s too late, it has been quite learning experience for our employees to change their own work habits and to feel ok with speaking up. We have an open policy with staff and using our internal wikis, as well as weekly sit downs, gives them a voice. It encourages creativity, critical thinking, and gives accountability with open communication and transparency. And it does create fiercely loyal employees (who say they could never go back to working for a “normal” company here).

  • Dammike

    Hi Erin,
    I think that this is a mind game. The roots extend back to the history of the generation of the workman. What were the values of the ancestors of the present being ( the employee)? Also point a finger to the childhood experiences and the general upbringing. The relationships existed between the parents. The area of the relationship between the mother and the father that was exposed to the child ( now the employee).
    Erin, let me offer a solution as we both & the readers are aware of the degree of the damage already warranting us to speak on the subject of Honesty. I am an ardent believer that the education system has something to do with this. Has it given the right feedback during the stage of nurturing. How about gender based education system. We are not far too late to consider this proposal. I think that the world education system should consider the gender based educational system. Male and female biology and psychologies are different. So how come they are supposed to learn the same subjects and compete with each other for better performances. We all know that the mother is much closer to the child who is an employee now. Mother obviously is the head of HR at home. Human desires, power of greed and not understanding the purpose of life has tremendous contributions towards honesty of a workman. Soft skills as a group are hardly taught at schools in most instances. Light has no value in the absence of darkness. So what’s the value of hard skills in the absence of soft skills. Erin, I am proposing two things. Gender based education and soft skills to be taught at schools as a subject that is compulsory to get through an exam. Lets be the change in the change we expect to be.
    Dammike Kobbekaduwe
    Kandy, Sri Lanka

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