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Crisis Prevention Begins Here: Company Culture that Fosters Transparent Communications

Most company crises are both foreseeable and preventable when identified early and acted upon. Prepare and prevent. Build a culture that encourages employees to bring concerns to management’s attention before they become a reputation-killing crisis.

Twitter. Amazon.  Boeing.  Every day, another company finds itself mired in a once-preventable crisis that threatens #reputation, financial health and often survival.  Especially in this age of instant global communication, no company is immune. Companies and their key stakeholders, namely employees and customers can suffer from the consequences of poor decisions made by people at every level of the company.  Often, powerful cultural norms disguise warning signs that can identify #smolderingissues that if not addressed can spell disaster for the company.

Consider some of the cultural “red flags” that can present roadblocks to identifying issues early and preventing them from becoming a crisis. I’ll offer ideas and tools to build the transparent communications culture that is a key ingredient in crisis prevention.   

Effective #crisisprevention requires a systemic approach to identify issues and correct them to avert a crisis that could negatively impact the company, its employees, customers and other stakeholders. As a crisis management consultant, I often advise clients to implement an early-warning system to identify and address issues before they damage the company brand and reputation.

A culture of #transparentcommunication across the company is fundamental to the success of such a system. Importantly, company culture plays a significant role in how employees work together, communicate, make decisions and solve problems.

What exactly is culture, anyway?  At its core, culture is the sum of formal and informal systems, behaviors and values, all of which create a certain experience for stakeholders. At its most basic, company culture is how things get done.

How do you know if your #companyculture encourages employees to raise legitimate concerns?  

Among the most troubling cultural attributes:

Shoot the Messenger

In many companies, it is common for senior managers to blame those who bring concerns to their attention. In this culture, employees quickly learn to keep quiet if they want to stay out of the boss’ crosshairs. This kind of fearful silence is toxic to the company and creates opportunities for manageable issues to become costly crises.

Pass the Buck 

On his desk in the Oval Office, President Harry Truman had a sign that read, ‘The buck stops here.’  In other words, ‘I am ultimately responsible.’  All too often in a culture where people fail to take responsibility for decisions, crises can smolder for months or years before they erupt. All the while, the issue grows in size, complexity and intensity until it erupts into a full-blown crisis. 

Mixed Messages

The potential for smoldering crises to escalate intensifies when leaders habitually send mixed messages to employees.  For example, the company may claim that  “quality is first” but if employees are told to cut costs, take shortcuts or sidestep processes to meet a short-term financial target, that mantra is undermined by actions that create ideal conditions for a smoldering crisis to grow.

Groupthink

Coined by Yale research psychologist Irving L. Janis in 1972, #groupthink refers to behaviors where group members’ desire for unanimity overrides their motivation to consider alternative courses of action.  They may go along to get along.  Groups may develop a perception of being ‘bulletproof’ that encourages undue risk-taking.  Warnings are disregarded causing group close-mindedness. Factions may pressure those who express strong arguments against a course of action, causing individuals to self-censor their concerns.

Management by Committee  

Especially in medium to large companies, management-by-committee propels people to avoid making decisions out of a fear of being blamed or fired for a mistake. In this culture, group members may share the blame rather than any one person, but critical decisions are not made and crisis can result.   

#Culturechange takes time and intention and may involve significant collective pain for leaders and employees alike.  There is no quick fix; in a larger company, it can take three to ten years to effect meaningful change. Clearly, culture is an important risk factor to consider when developing and implementing systems to identify issues and correct them before they become a full-blown crisis.

In an effective culture, #communication is reciprocal, transparent, consistent, frequent, timely, appropriate, managed up and down, supportive and empathetic.  When all members of a team, department or company are able to communicate effectively with one another and with those outside their immediate group, issues are resolved, good decisions are made and the company succeeds.

What can leaders do to help create the culture of transparent communications that encourages employees to speak up when they see a problem?  

Consider these tools and ideas to build a culture of transparency and honest communication that can address issues before they explode.

  1. Transparency as a Core Value

Many companies have a #missionstatement and set of #corevalues or principles. Such declarations define why the company exists and embody the fundamental beliefs that should drive employee behavior and decision-making. When trust and transparency are embedded in the culture, employee interests are balanced with those of the company in a process that demonstrates the shared value of disclosure. Transparent communication can be a stand-alone value (preferable) or woven into existing values such as respect, diversity, integrity, responsibility and personal accountability.

2. Communications Training

Ineffective communications contribute to more business failures than virtually any other cause. Every employee—from the front-line staff to the CEO— is responsible for effective communications.  Yet far too few companies offer values-based communications skills training to teach employees how to work effectively with their peers and supervisors.

The Communications Department can lead efforts to develop communications skills training for all employees, starting with first-line managers. A strong example is set when senior leadership participation is mandatory. Of course, you’ll need CEO support on this point, but it is a critical step in building trust and demonstrating the importance of open communication to employees.  Leaders must walk the talk.

Ideally the training includes modules focused on 1) unconscious bias, diversity and different communication styles, 2) active listening skills, 3) shared understanding through mirroring and feedback, 4) interpersonal skills and 5) resolving differences and conflicts.

As a follow-up to training, offer coaching and support to help managers refine their skills and fulfill the goals of two-way symmetrical communication.

3. Employee Hotline

To support a culture of transparent communications, set up a “hotline” that anyone—employees, family members, customers—can use to report concerns. Publicize it regularly. Many companies already do this as part of government mandated compliance programs, but the hotline can be a powerful tool to encourage employees to report issues or concerns without fear of reprisal. 

I recommend engaging the services of an experienced third-party vendor to manage the hotline. Remind employees that a neutral third-party service is taking the call.  In this way, callers are assured that objective people are hearing their concerns and those issues won’t be whitewashed for management.

Commit to following up with callers as appropriate with information regarding actions taken to address the reported concern. To build trust, provide regular reports to all employees regarding the general nature of reported concerns (to the extent possible) and outline the actions being taken to correct them.

4. Rituals of Recognition and Positive Feedback

Humans learn by example.  Positive reinforcement helps make new behaviors a habit. Consider ways to enhance transparency and a build culture of communication.  Thank those who raise legitimate concerns that if not corrected could cause damage the company.  Include a regular agenda item in team meetings to talk about issues and recognize those who speak up. Highlight management’s corrective action. Done consistently, transparency takes root and trust in leadership improves.

In closing, a business crisis can be a short-term disruption or it can signal the end of a company.  Most crises are preventable. Leaders have a responsibility to manage issues and prevent them from becoming a serious threat to the company.  Cultural norms play a key role in predicting, identifying and resolving issues before they threaten the company’s viability.  As important members of the crisis management team, communications professionals can and should lead by example and work with executive leadership to build the cultural dynamics needed to support an effective crisis early warning system.