Well now . . . That depends on your point of view or your position in the hierarchy, doesn’t it? Should it?
In an earlier article I talked about the importance of honest leadership that “walks the talk” instead of trying to manipulate employees. How far should a CEO go in being transparent about their plans for the organization—including those, for example, to downsize the organization or even to sell the business?
Colonel Sanders
Let’s start with the role of the CEO, or President if the firm doesn’t have the title of CEO. As the head of the firm, the CEO should spend most of his or her time focused outward and upward. This role, more than anyone else’s in the organization, is to explore strategic options and drive the future actions and direction of the firm. Of course the CEO needs to assure the organization is running optimally, and that internal communication is open and free-flowing. As one President I know well, and respect even more, likes to say, “He’s the Colonel Sanders of the business.” That translates as being the face and representative of the organization to the outside world, while assuring that the culture and values are maintained inside of the company.
Let’s presume the firm is running like a well-oiled machine - something every company needs, but few achieve, as I will explore in an upcoming piece on “Talent.” Operational excellence frees the CEO to explore possibilities, map out the direction for the firm, and assure risks are recognized and are being mitigated to the extent they can be. The CEO should seek out experienced individuals who can challenge assumptions, expose him or her to different approaches, and push for action that will move the organization forward. Such openness to new ideas is essential to help emerging growth companies get past No Man’s Land to consistent, profitable growth. Trusted advisors and even advisory or fiduciary boards can fulfill this role.
The Impact of "What If?"
You can see where I’m going here. Given that CEO’s are continually pushing for change and exploring options, this can cause unwarranted, yet damaging confusion and concern on the part of the employees or the shareholders/owners if one of these exploratory forays into the ‘realm of the possible’ is made public, but leads to a dead-end. Can you imagine the questions, the news stories, the lawsuits? All because an excellent CEO asked, “What if?”
CEOs need to be free to ask questions, examine assumptions, and seek out alternatives without committing the organization to a new path and certainly without being forced to share details about these quests for discovery with others. Explanations are warranted only when a new path for the firm is chosen and the direction is definitively changing.
Obligation to Transparency
I prefer to think of a CEO’s obligation to be one of translucency rather than transparency. Corporate goals, values and strategic direction must be clear at all times, but the details and the “how” must be given room to change; as market forces change, as new information is uncovered, and as new skills are developed within the firm. The CEO is also obliged to be ethical, truthful and honest at all times. Anything less will break the trust the CEO should always work to maintain with employees, clients, the community and with investors. Honesty does not, however, require sharing EVERYTHING with everyone. That would not be the best use of the CEO’s time and energy, nor would it be in the best interest the firm. An ethical, sensitive CEO is not prescriptive about communication, but shares information freely that will move the company and its stakeholders forward.
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Contact Kim at kim.denney@newportboardgroup.com
image credit: Vivian Paige
