This fall’s bumpy rollout of HealthCare.gov placed President Obama in territory familiar to many chief executives. In business, as in the White House, things rarely go precisely as planned, and executives often find themselves in damage-control mode, working under pressure to explain and rectify problems with the organization’s products or services.
Many CEOs would agree that software glitches, human error and other such issues are inevitable, and for that reason, we should cut Obama some slack, and I tend to agree. However, Obama’s problems were exacerbated by a reality at least somewhat under his control — his staff’s failure to keep him fully informed.
A typical CEO’s job has a wide array of responsibilities, from making important strategic decisions to communicating with the team and clients. To perform virtually any of these responsibilities effectively, a CEO must know what is happening within the organization — both the good and the bad. Fortunately, information about things that are going right is generally easy to unearth. After all, how many employees have an incentive to hide good news that reflects positively on them or their teams? By contrast, employees have strong disincentives to keep CEOs in the loop when things are going wrong.
Employee disinclination to share bad news can be because of a variety of reasons, including fears of embarrassment or adverse employment consequences, as well as more benevolent interests in shielding the boss from distractions or fallout. In any case, as painful as it may be, getting that bad information and getting it early is critical to a CEO’s success. Not only does early knowledge of problems give the CEO a jump on finding a solution, but it ensures that the chief executive and his or her staff make decisions with full information, and avoid fanning flames through misstatements or public contradictions.
There are several useful strategies that CEOs can pursue to ensure that they consistently receive a complete picture of what is happening among their teams:
First, they must create a culture of honesty. Employees must know that they are expected to share all information relevant to the business, including the good, the bad, and the ugly.
Second, employees must understand why this matters. If the team is looped into the connection between the CEO’s decisions and what they see and hear, it can be much easier for them to recognize when they have discovered information that the chief needs to know.
Third, CEOs must be proactive in ferreting out negative information. Questioning assumptions and aggressively probing for risks is a critical element of good leadership. The reality is that if you do not ask what is wrong, most people will not tell you.
Getting staff to acknowledge their mistakes is no easy feat. After all, some mistakes warrant punishment, even if voluntarily disclosed. However, if CEOs can develop a culture of open communication, and make a habit of extracting negative information from their teams in a timely manner, they will have much greater success mitigating or resolving issues as they arise, leading to a stronger, more effective organization.
Paul Mandell is founder and chief executive of Consero Group, an international events firm headquartered in Bethesda.