Open communication builds trust

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(Published in the Job Market-Working People section of the Philippine Daily Inquirer, September 9, 2007, Sunday)

By Roel Andag

Contributor

“Big companies run on trust. Our company is set up so that information – both good and bad – travels upward at a rapid pace. And I insist that none of our leaders block the information flow. At the heart of every good team is open and honest communication.” – Jeff Immelt, GE CEO

Is trust such a pricey commodity that only corporate giants like GE can afford?

Judging by former GE CEO Jack Welch’s book Straight from the Gut, the company cultivates trust via open communication. Immelt’s statement merely reiterates the fact. The company has a profound understanding of its multifaceted relationships with its stakeholders and publics – the board, consumers, employees, investors, suppliers, competitors, media, policymakers, the community where it operates, and even critics. GE dialogues with all of them. The company keenly appreciates the long-term impact of meaningful communications, both internal and external, on business vitality.

Trust is not bought. Neither can it be obtained through intimidation. Communication builds trust. Trust builds teams. Trust establishes brands. Trust emits from honesty. And honesty is not size-related. It applies to all packages. It is not its monolithic size that compels GE to observe honest and open communication.

A company operates in two modes: business as usual (BAU) and crisis (CRI). When a company is dishonest in its communications during BAU, it will be very difficult to become honest in CRI. If a company is sneaky about promotions and incentives, expect it to be less forthcoming about looming mergers and other emergencies. The crop cannot be harvested without planting the seeds. To begin with, dishonest companies are prone to CRI situations. Dishonest communication has exposed the clay feet of otherwise respected companies and individuals.

Make communication a trust-promoting tool. Follow these tips:

1. Inculcate honest and open communication. Categorically include this thrust in key statements such as company vision, employee policies and speeches. Lead by example.

2. Specify reasonable parameters. Open communication is meaningless when not imbued with a sense of responsibility. Open communication should be congruent with corporate governance principles. Trade secrets, for example, should never be shared wantonly with outsiders.

3. Eliminate layers of communication screens. Install processes and technology that facilitate unfettered flow of information. Establish a streamlined documentation system.

4. Do not cultivate ‘assets’ assigned to spy on their colleagues. These assets are liabilities because they breed betrayal. Demand objectivity through peer evaluation instead.

5. Establish rewards for honesty (alongside performance) and sanctions for dishonesty. Be impartial in dealing with employees. Administer rewards and penalties fairly. Reinforce ethics.

6. Foster dialogue with key stakeholders. Set quality time for formal and informal discussions. Information is power. Learn from stakeholders’ insights and implement their ideas whenever practicable. Acknowledge their contribution.

7. Be honest, sincere and consistent in your message. Never mangle, twist, fabricate, or sugarcoat information. This especially applies in high-stress CRI situations when difficult messages such as bankruptcy, dissolution, and job loss have to be communicated. Honest communication need not be traumatic. Words and phrases have been coined to deliver truth tactfully.

8. Measure results. Monitor public interest (as evidenced in customer inquiries, job applications and media attention, among others), improvement in lead times, and sales increase, when attributable.

Organizations that thrive on secrecy attract unnecessary scrutiny. Trust is not contingent on the size of the company. Honest and open communication promotes trust. Trust cultivates respect and loyalty.