Leading Edge: The Culture of Candor - ' Truth in History '

Truth in History

History contains countless cautionary tales on the consequences of the failure to speak truth to power. Perhaps none is more vivid than the murder of Thomas a Beckett. In T. S. Eliot's version of the story, "Murder in the Cathedral," Henry II murmurs: "Will no one rid me of this meddlesome priest?" The monarch would have been spared an enormous amount of grief if one of his four barons had simply said, "No." Instead, they murdered the cleric on the altar, one more example of subordinates who became complicit in their leaders' crimes by doing not what was right, but what they believed the leader wanted them to do.

Many corporate leaders encourage cultures of collective ignorance. Sherron Watkins said that talking about what was really going on at Enron was off limits: "You simply didn't want to discuss it in front of the water cooler." Lack of candor is often so deeply ingrained in corporations that they will practice self-deception even when they know that they will pay a terrible price for it. In the early 1990s, for example, General Electric lost almost a half a billion dollars at its Louisville, Ky., refrigerator plant because of a faulty compressor design. Keeping quiet about the design flaw, which some of the engineers had to know about, was somehow perceived as a greater good than saving the company a considerable fortune.

The prescription for creating a culture of candor is easier to articulate than implement. Exemplary leaders welcome dissent and reward it. They know that bad news is often good, even invaluable information. They have the strength to endure thoughtful criticism, from whatever quarter. If they waver in their willingness to hear what the loyal opposition has to say, they remind themselves of the fate of others who covered their ears. One recent example is former Compaq CEO Eckhard Pfeiffer. Compaq fell farther and farther behind competitors Gateway and Dell because Pfeiffer listened only to his A-list of yes-men and ignored a truth-telling B-list that repeatedly warned him that Compaq had to start operating at Internet speed in order to prosper. Pfeiffer ignored responsible dissent right out of his corner office.

No organization can be honest with the public if it is not honest within. Executive compensation should go a long way toward salving the pricked egos of leaders whose followers speak their minds. And boards of trustees must be equally willing to speak up when they see the shadow of corruption or dirty dealing in the actions of the organizations they are charged with overseeing. No organization is served by silence—as the American Catholic Church has so painfully learned recently.