When leaders keep secrets, it handicaps their entire organization. It always backfires.
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I’m not talking about the kind of secrets involving personal lives or why a person was fired. Those can be legitimately held secrets. I’m talking secrets about the company itself.
I’ve been around secretive leaders and around open leaders. I’ve never seen a secretive leader who didn’t have insanely high turnover. I’ve never seen an open leader who wasn’t respected by his team and had leaders who had been there since the beginning.
I’ve been a part of leadership meetings where the leader told us to keep things secret that shouldn’t have been kept secret. It is one of the most demotivating things you can ask a team member to do. Not only do I have to withhold vital information from my team which could help them, but I also have to deal with a known problem by myself.
Open leadership at its finest
I’ll never forget the best example of open leadership I have ever seen. (Note: I changed a few non-essential facts to protect the identity of the leader)
I was working for a company that had unfortunately just hit some seriously hard times. Sales were down, but not much. That wasn’t the big problem. The biggest problem was something that threatened to bankrupt the company in one giant swoop of death.
It was a very cyclical business. We had months that accounted for 15% of our sales and months that accounted for less than 4%. Naturally, as Murphy would have it, this big problem occurred towards the beginning of the slow season. We were looking, mathematically, at a four-month survival window. We would not see another upswing in the cycle.
We needed $2,000,000 in sales during the slow time to make it to the upswing. Projections were for more like $1,200,000. We had to find $800,000 fast.
We knew all of this because the owner opened the books to us. He shared information that was previously held close to his vest. I think, perhaps, it was the panic of the situation, but regardless of the reason, he displayed open leadership at its finest. And the results were astounding.
His honesty was inspiring.
The reality was humbling but motivating. Rather than get discouraged, it ignited a fire in each of us individually and a spirit in us collectively to find that $800,000.
Within a week, we opened up more marketing and immediately increased sales by more than $1,000/day. Since we already had the inventory, this was mostly profit. That was $100,000. Not a huge dent, but it helped.
Next, we moved some sales that we’d planned for the beginning of the busy time to the middle of the slow time. Granted, all this did was reallocate money from one quarter to another, but it gave us a boost when we needed it most. That was $200,000. $500,000 to go.
One department was able to postpone a $50,000 project to later in the year. $450,000 to go.
That same department cut $200,000 in their budget essentially by not outsourcing as much and reorganizing the teams. $250,000 to go.
We cut another $50,000 in shipping costs, credit card processing fees, and the like just by spending time looking for better deals. We only to find another $200,000.
We put small dents in that $200,000 by everyone chipping in to help with shipping rather than hiring more people at the beginning of the busy season, but truth be told, I think it was a miracle that we made it. Sales ended up higher than we thought. Production costs were lower. And we miraculously covered that last $200,000. We made it through the slow time with a safety net of more than $40,000.
The company is still thriving today.
All because the leader didn’t keep secrets. He was open. And his team responded.
How have you seen secret leadership backfire? How has open leadership led to success?