Why people are not telling you the truth

ILLUSTRATION BY RUTH MACAPAGAL

If you are a business leader, chances are high that many of your people are not telling you the truth. This is even worse if you are the CEO or owner, let alone both. Why? Because the more money you have, the higher your position and social standing, the fewer people will bring you bad news. Or give you an accurate view of reality.

This is especially true in cultures like in the Philippines and several other Asian countries because most people are even more intimidated by factors like status and wealth. Many of our clients in the region and globally are wealthy family business conglomerates where ownership and positions often go together. If you are in a similar situation, this is a lethal combination because people will not be giving you the facts, so you must be extra careful.

Many of our family business clients have difficulties coping with this situation, especially if they are not the first generation. This challenge of not knowing whom to trust and not knowing what the facts are is often getting worse with each new era after the founder.

Root cause: They want to hide their weaknesses and exploit yours

So what can you do if you are a CEO, business owner or both? First of all, we have to understand the root causes.

Let me share a few examples from our regional and global clients. A president and second-generation owner of an American food company reaching hundreds of millions of clients across different countries had the weakness of loving beautiful presentations. The top people around him quickly realized this was a great way to distract him.

He only became aware of this after I coached him and my team had done additional one-on-one interviews with the board and the one-downs. He was shocked. He had never realized that this was one of his most significant weaknesses in the business, to be easily distracted from the actual content by beautiful PowerPoint. This meant that he needed to be more focused on holding people accountable to deliver results.

Solution: Know your weaknesses

Again it comes back to what you want: As a business leader, you want to have a hungry army of people working to achieve your goals, to be accountable and ruthless in execution.

A weakness like the one above sabotages that goal. I taught that CEO how to become aware of his unique strengths and weaknesses, and build a support system for his faults so others could no longer exploit them.

Another example from our family of clients: a fourth-generation American entrepreneur has the typical personality profile of the gung-ho innovator who always tries new things. His people catch up to that and serve him an endless stream of new ideas and projects, so he gets distracted from them not delivering on their targets and critical results. And many of them were repeatedly not reaching their targets, as we found out.

As was already inscribed in the forecourt of the Temple of Apollo at Delphi in Ancient Greece: Know thyself. You need to know your strengths and your weaknesses and build your successes around them.

Practically this means: Focusing on and playing to your strengths, and being very aware of your weaknesses, and building a support system for them so others cannot exploit them.

Root cause: They sugarcoat

Another example from our family of clients is a fifth-generation billion-dollar family business empire spanning many different industries. When we talked to the CEOs of their businesses, they were very vocal about what needed to be done, the urgent challenges of the company, and the fires that needed to be put out. But as soon as these same CEOs sat in a meeting with the family members, they were silent. An occasional head nodding and a few sparse words; that was it.

Why is the family paying these CEOs if not to get their opinions and insights? None of the CEOs wanted to venture into uncharted territory. After all, these CEOs needed to execute. But no, silence prevailed or, at best, “sugarcoating.” They neither raised the harsh realities of the business nor the golden opportunities with the owners. They stayed in the “safe” middle waters.

Root cause: They don’t want to be the bearer of bad news

Especially when it comes to bad news, this can kill you. Today’s economic environment is unforgiving: a wrong decision and you are gone. Even market leaders are only one or two major strategic decisions away from failure. Next time you think that could never happen to your business, remember all the famous failures of corporate history, from Kodak to Yahoo, from Nokia to MySpace. On top today, gone tomorrow. The same can happen to you.

Solution: Get an accurate picture of reality

This is why you need to be extra cautious that you see reality as truthfully as possible. This is why my team and I usually do an X-ray or deep investigation when we start with a new client to find out what the facts and realities of the business are—they are rarely what the owners think.

You can only make strategic decisions if you know what reality is like. So your priority is to assess reality and take everything people tell you with a grain of salt. You need to dig and dig enough until you find out the root causes of problems. As a CEO or a business owner, you have to either be an excellent detective yourself or get other external experts to do that for you. Your goal remains the same: get as accurate a picture of reality as possible.

Root cause: They don’t want to tell you ‘no’

Many people, especially in Asia, including the Philippines, do not want to say “no” to requests, mainly if these requests come from the top or the wealthy. Even if they know they cannot deliver by a specific deadline, they will still say yes. This happens equally at the board or management committee level as at any other level of the business.

What that does to a business is simple: It throws everything into chaos because people do not deliver by the set deadlines while everyone else relies on them. Another example from our clients: the head of a critical business unit that was instrumental for the growth of the business and on which many other business units depended kept saying “yes” to projects even though his whole department was already far beyond maximum capacity.

Solution: Create a culture of ruthless accountability and execution

Why did he do that? He wanted to please the owner. But he did not think this through because the famous doomsday arrived when the entire house of cards collapsed. After all, he could not keep his promises and failed on many vital deadlines.

The result? The owners were less than happy. If you are the owner, CEO or both, you need to encourage people to be extremely clear and honest about what they can or cannot deliver. This only works if you create a culture of open communication. But most of all, a business is a system of interconnected parts like a machine; if one component fails, it impacts all the others.

Accountability and ruthless execution are the oil of the machine. Lose it and your profits will never reach their full potential!

Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email [email protected].