How companies get into deep doo-doo (and how they could keep out of it)

When companies get into serious trouble that makes front page headlines, there is never just one person to blame, because, as John Donne so aptly put it: „no man is an island“.

While there are a million different reasons why companies get into dire situations, there is often a common theme: a disruption of the information flow, i.e. information does not make it safely from A to B, which means that decisions and actions rest on a shaky basis. There are many factors that contribute to that disruption, and like many things in life, they materialize on a continuum between “high-risk” and “low risk”. As we are talking about major doo-doo, though, some high-risk macro factors shall be considered here to shed light on some general principles.

The pressure cooker

Companies must turn in a decent profit, they have to monitor their costs and sometimes „group inertia“requires a „call to order“. However, constant threats and pressure, such as intense cost cutting demands, pressure to generate ever more revenue, or the constant wielding of the Damocles sword of headcount reductions, are not conducive to keeping the information flow buzzing. People who are constantly worried about making “deliverables” or keeping their job, easily develop tunnel vision, i.e. they are prone to interpret (and thus eventually misdirect) information through the narrow lens of cost cutting, generating revenue or keeping their job. The results can be an unwillingness to take risks or a propensity to run excessive risks: helpful innovations might thus be nipped in the bud because they cost money; conversely, high-risk business, that can pave the road to doo-doo, will be accepted.  Because, if you have to bring in big bacon, you will rather prefer not to engage in difficult conversations with clients which might lose you big business. After a while, chances are that people are simply too drained or de-spirited to care. When you have worn out your people, you might be hard pressed to replace them with new “talent“, because, seriously, who wants to work for a company that has no money to spend, constantly swings the bottom line whip, and tells you that your job could be gone any day.

Steep hierarchies and executive privileges

There is no world without hierarchies. However, the question is how they are structured, what they are based on, and how they are filled with life. Steep and impermeable hierarchies combined with a tradition of basically unchallenged upper echelon privileges and a military style of command and obedience are a great breeding ground for disrupted flows of information. First of all, because their primary message is that those at the top are somehow superior beings who deserve to have privileges; they must not be challenged or bothered with “the matters of the mere mortals” and must have their orders obeyed. Thus, the value and purpose of information might change from being  a “vehicle of enlightenment” to becoming a “vehicle of pleasing”, i.e. good news gets shared, the not so good news gets somehow lost on the way, or is phrased in a way that it is barely discernible as bad news. Potemkin villages are built that way. If this goes on for a while, you might no longer be left with a sufficient number of people who are actually able to call a spade a spade and escalate things clearly. Others might not muster the courage to speak up, because they fear a rebuff, negative consequences for their careers or that the office peace will suffer. Attracting and retaining people who do have the skills and the courage to speak-up will be difficult, because these individuals might simply not feel it is worth their while.

The Code of Secrecy

While confidentiality is a normal and necessary part of company life, because it protects your assets, secrecy is a different animal, which can play out in many different ways. Let’s say you make a code of secrecy a mainstay of your marketing. This necessarily attracts some customers who have a thing or two to hide. If you attract a growing number of the above mentioned ilk of clients and become increasingly dependent on their business, this will inadvertently change your flow of information in the entire company. Even in those areas where you would prefer people to speak up, especially if things go south. First of all because it changes the way people think about information and its purpose: from being something that must be shared as freely as possible to enable good decisions, information becomes something that needs to be hoarded to protect selective interests. Also, if you cultivate a culture of silence, you will have fewer and fewer people who truly have speak-up skills, either because they never possessed them or because they buried them as skills the firm neither needed nor valued. People who are able to counteract or off-set the powers of silence might not be attracted or don’t stay.

Subversive multilingualism

Multinationals undoubtedly need a tool to communicate across the globe. Most often, that tool is the English language. That’s fine, as long as you stay aware of the fact that not everyone commands that tool equally well. If you fall prey to the illusion, though, that “everyone speaks the English”, you are in for trouble. Because, after all, the information that is shared along the information chain is the information that can be expressed or understood in English. “Home-made“ translations (produced in the heads of people) that miss the point, have the wrong tonality, introduce false information or befuddle others can disrupt the flow of information so much that it becomes a game of “Chinese Whispers” on steroids. And as these things often go unnoticed (because who knows what they actually wanted to say), they are a particularly subversive type of operational risk. Also, employees who are not “natural-born polyglots” might become frustrated, because they cannot express their thoughts precisely in certain conversations and thus simply keep quiet. Consequently, their input and ideas are lost. Moreover, having to operate outside of your mother tongue for extended periods without walking on terra firma is extremely tiring. The good thing is – you will never have any difficulty attracting people who claim to have a sufficient command of  English. That’s part of the problem.

Avoiding the doo-doo: identifying real root causes and building up Corporate Courage

What all these factors have in common is that they infuse insecurity and anxiety into your culture and erode trust and confidence. Insecurity, anxiety and a lack of trust have different symptoms, but they always disrupt the effective flow of information that is so vital for level-headed decisions, effective cooperation (especially across silos) and a functioning system of checks and balances. And they stand in the way of effective escalation, which might ultimately mean that the Board steers blind or in a dense fog.

Even if you do not consider your company to be on the high-risk end of the continuum, there can be pockets in your firm where some of these factors or similar idiosyncracies might already be doing sufficient damage for you to consider doing something about it.

Actually, any kind of trouble is an excellent starting point, because it requires you to reconsider the realities in your firm and review where you are on the continuum.

Getting to the real root causes: asking “why”

A good way of doing this is to meticulously reconstruct and follow the flow of information that lead to a harmful event, and to scrutinize every interface where information was handed over and/or action was triggered. After having established the surface facts of the “What” and “How”, you must dig deeper. Asking consecutive rounds of “Why-questions” is the only way that will get you closer to the various layers of truth and the real root causes, such as cost/revenue and other pressures, lack of time, lack of expertise or experience, hiring/promotion decisions, lack of kindness, lack of language skills, lack of respect and honesty, etc. Only when you know the real root causes can you start to devise sustainable solutions. If we are looking at royal doo-doo (i.e. billions lost, reputation damaged for years, criminal prosecutors at work, etc.), a quick route to the root might be to start with one simple question: “Why didn’t the Management Board know?”

Corporate Courage: the secret anti-doo-doo ingredient

This might be a painful exercise. But the good news is, once you are down to the real root causes, there are solutions which will help you build the culture that will take you into the future. Spoiler alert:  Announcing the dawn of the “Speak-Up-Culture” will not do the trick.

Actually, the single most important trait which is required for effective information flows that make your company buzz, is courage. The courage to say „no“. The courage to get out of the „three-monkeys-mode“ and face some uncomfortable truths. The courage to ask nasty questions and accept unpleasant answers, to be challenged and to rethink. The courage to speak with clarity, to be honest (with oneself and others), and to be vulnerable. Or the courage to trust more and control less.

To foster that courage, it is of paramount importance to lower the “courage threshold”, i.e. the amount of courage employees have to muster in order to make their voices heard. Because not everyone is a hero, and no one should have to be. Anything that is the opposite of the “anxiety vectors” described above – such as more „conductive“ hierarchies, a measured tone from the top, less pressure, a reduction of damaging dependencies, or less competitive compensation systems – will achieve exactly that.

In parallel to that, providing structures and services that build confidence and trust and enable people at all levels to be better communicators and thus more confident, reliable “relay stations” along the information chain will also take you a long way. A good starting point can be to arrange listening and speaking trainings, joint employee/community activities, debating or negotiating clubs, to build a language service that professionally supports multilingualism, introduce meeting principles that ensure everyone is heard, or to create spaces that allow for effective teamwork as well as for thorough thinking.

After all, every company that manages to extricate itself from doo-doo and embark on a genuine journey of change is an asset for everyone and should be applauded for its courage.

© Sabine Breit, 2022