Tuesday, September 20, 2011

business rationale for a leading up culture

You've seen in this blog that I promote the value of a leading up culture -- one where leadership expects, and sets the structure in place for, employees to share critical information with those above them on the organizational chart. Leaders cannot know what those on the front line know --what's happening with competitors and customers day to day, what skills and resources are needed to meet customer needs right now and in the future, and an assessment of our own level of these.

Now there is quantitative support for creating a culture where employees are encouraged to speak up and leaders are expected to listen: The Daily Stat, a publication of the Harvard Business Review, reported today that "Companies rated by their employees as being in the top quartile in openness of communication delivered an average total shareholder return of 7.9% over a recent 10-year period, compared with 2.1% at companies in other quartiles, according to the Corporate Executive Board."

Leaders must create a psychologically safe environment, one where employees can share bad news and know that their leader won't shoot the messenger. The Corporate Executive Board's report goes on to say that "nearly half of executive teams lack information they need to manage effectively because employees withhold vital input out of fear the information will reflect poorly on them."

How can leaders surface the critical yet hidden information employees are afraid to share? What can you do to enhance "employee's comfort in speaking up, even when they have negative things to say"? -- the "one (indicator) most strongly correlated with a company's 10-year-returns"?

What are you doing to ensure you hear what needs to be said?

Quotes sourced from: Open Door Policy, Closed-Lip Reality, by Michael Griffin, Executive Director, Head of Global Research, Corporate Finance, Corporate Strategy, and Corporate Services Practices. © 2011 The Corporate Executive Board Company.

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