"Almost anyone at Dell can
explain the fundamental concepts that our business is based
on. That's because we spend a tremendous amount of time
communicating what's going on, what we're planning to do, and
what everyone needs to do to help us achieve our
goals."14
Michael Dell
Founder and CEO, Dell Computer
Have you ever tried to walk
through your house when it is completely dark? You have a
vague idea of what is around you, but you still have to walk
slowly and reach your arms out to make sure nothing is right
in front of you. Despite your precautions, you will often stub
your toe or bump your shoulder on a wall or piece of
furniture. Then, when you reach your intended destination and
turn the light on, the path you should have taken is perfectly
clear.
An employee who lacks information is in the same position as a
person walking through their house when it is completely dark.
They are unable to move quickly and act decisively, because
they don't have enough information to make sure they are going
down the right path.
KEEP EMPLOYEES IN THE
LOOP
Information is the tool that
allows employees to do better work by increasing their
understanding of their situation. The more information
employees have, the better they are able to do their jobs.
Employees who are not given enough information feel like they
are operating with one arm tied behind their back. They are
unable to make certain decisions, because they don't want to
make assumptions that may create more problems than they
solve. Some managers complain that their employees can't see
the big picture. But how are they supposed to see the big
picture if they are not given the information to understand
what is going on?
When you share information with employees, the message being
sent is that you think highly of them which builds trust and
gives employee morale and motivation a boost. In addition,
when employees know what is going on, they are much more
likely to understand the issues that you face in your
position. It allows them to see where they can make a
difference. On the other hand, employees will never have the
ability or desire to help you if you hoard information from
them.
For example, imagine you are the manager of a restaurant and
one of your job performance measures is the feedback given on
customer comment cards. Instead of keeping this information to
yourself, you should share it with employees. You could do
this by having monthly meetings to discuss the positive or
negative comments. Employees could then discuss ways to
improve which would make them more likely to feel responsible
for the results.
The next time you acquire important pieces of information you
should be thinking "Who also needs to know this?" If you
don't, you are holding your employees back. For example, if
you go to a meeting with other managers, you should seriously
consider gathering your employees or sending out an e-mail to
give them a summary of what was discussed and how it affects
the department. Employees will appreciate it when you do
this.
Managers should also share information with employees about
company strategy, sales, expenses, competitors, etc. The
employees you manage should know why the company or department
exists, the role of each employee, who the main customers are,
and what the guidelines are for being successful. They also
need to know about the other departments in the company, why
they exist, and what they are trying to achieve. In addition,
any change in policy should be discussed with the employees
who are impacted by it.
HOARDING
INFORMATION
There are some managers that
hoard information from their employees. They absorb
information from their managers and peers, but they make a
conscious decision not to pass it along to their employees.
Inside information is a source of power and status. Why share
it when you can have it all to yourself?
Managers who hoard information are doing a disservice to
themselves and their employees. These types of managers
increase their workload as a result of doing this. Their
employees don't have the information to make a lot of
decisions by themselves so they constantly have to check with
the manager. This wastes both the manager's and the employee's
time.
In addition, hoarding information breeds mistrust and
miscommunication. If you don't share information, employees
may get the wrong information through the grapevine. The
grapevine will typically exaggerate information and put a
negative spin on it. Employees will usually assume the worst
when they are not informed about what is going on. For
example, a company may be planning some minor layoffs over the
next couple of months. But a rumor starts making its way
around the company that there are going to be massive layoffs.
As a result, morale plummets and lots of employees start
looking for jobs and some good ones end up leaving to work
elsewhere.
The root cause of hoarding information is the manager's fear
of becoming unimportant. They feel their position won't be
challenged by anybody if nobody else knows what they know. If
employees were to have too much information, this would be
perceived as a threat to the manager's status and authority.
Hoarding information is a method of self-protection so other
employees won't look better than they do.
Managers who hoard information will make various excuses as to
why they don't share it. Most include the assumption of
employee ignorance. These include: they aren't intelligent
enough to understand it, they won't know what to do with it,
they aren't interested in it, they might share it with
competitors, etc. All of these assumptions are usually false.
You would be better served by assuming the exact opposite. But
if you believe those assumptions to be true and your behavior
reflects this belief, then your employees will never come
close to reaching their full potential.
It may seem that you are more powerful when you keep
information from your employees. But that is an illusion. Real
power comes when you share information which results in an
increased level of productivity and much greater loyalty from
your employees. Managers who hoard information rarely move up
the ladder, because teams can only be so effective when one
person monopolizes the information. Ironically, managers who
hoard information will be more likely to have underperforming
departments which will ultimately threaten their jobs.
In a lot of companies, managers work on the second floor and
regular employees work on the first floor. The information on
the second floor is freely distributed to everybody else on
the floor. But when an employee from the first floor asks for
it, the response is "Sorry, that information is only for
people that work on the second floor and it does not apply to
you." The problem is that when the company profits are low and
the managers stress to employees that they need to think of
ways to make the company money, the employees are likely to
say "That is a second floor issue and it does not apply to
me."
In reality, the second floor is obviously not a floor in a
building. But it does exist in management meetings, e-mails
between managers, confidential memos, private conversations
between managers, etc. In a corporate setting, it is the "Over
$60,000 a year" club. In a fast food restaurant, it is the
"Above minimum wage" club. In a factory, it is the "Anybody
who supervises somebody who gets their hands dirty" club. In
most businesses, there is a clear division between who has
access to "high-level" information and who doesn't.
In order to maximize employee productivity and business
efficiency, this line needs to be eliminated. This is not to
say that all employees are equally valuable. There is a reason
why people make different salaries. But just because somebody
is higher on the organizational chart does not mean that they
are the only one who should have access to important
information.
Finally, although managers are wise to share a lot of
information with employees, not every bit of company
information should be distributed. Coca-Cola would be unwise
to share the formula for Coke with every one of its employees.
In addition, you should keep employees' salaries and personnel
files confidential. And private conversations should remain
private. You should not share a piece of information that your
boss, a co-worker, or one of your employees has asked you to
keep to yourself. In these instances, you should be honest
with employees by telling them that you can't reveal that
information.
EXAMPLES
Here are four examples
regarding sharing information:
One of the best examples of a company that has benefited from
sharing information is the Springfield Remanufacturing
Corporation (SRC). In 1983, a group of managers went into deep
debt and bought a struggling factory owned by International
Harvester where they worked in Springfield, Missouri. On the
verge of bankruptcy and with 119 jobs hanging in the
balance15, the company, led by CEO Jack Stack,
opened their books to all employees, explained how the company
made money, and showed employees what they could do about
it.16 Employees would meet at a specified time
every week to go over the financial numbers for that
period17 which would keep everybody up to date
regarding what was going on and prompt discussion of
strategies for improvement.18 The result was that
from 1983 to 1991 the value of SRC's stock skyrocketed from
$0.10 per share to $18.30 per share.19
***
Imagine a customer comes up to a clerk in the men's clothing
department of a retail department store and inquires about the
availability of a popular, expensive jacket with a high mark
up. The clerk looks where the jacket is sold and says "Sorry,
it looks like we are all out." Then, the customer says "Do you
know when you will have any in stock?" The employee responds
by saying "No, I sure don't", because he doesn't have a
username and password to access the inventory management
system. That customer will probably be disappointed and go to
another competing department store to buy the jacket.
But what if that clerk had been given a username and password
and could access that information even when his manager was
not around? Then, he would have known when the next shipment
of those particular jackets would be arriving at the store.
Let's rewind what happened and think about how the
conversation might have gone. The customer says "Do you know
when you will have any in stock?" The employee responds by
saying "I'm not sure, but walk over to the counter with me and
I can check on the computer."
After looking up that information, the employee says
"Actually, sir, we are expecting to get the next order of
those jackets two days from now. If you give me the size you
are looking for and your phone number, I can put one aside
when the shipment arrives and call you to let you know it is
here. How does that sound?" The customer replies, "That would
be great, thanks."
***
A commercial real estate company was looking to cut expenses
and decided that they had to control the amount of money they
were spending on shipping packages. The concern was justified
because many employees got in the habit of sending all of
their packages through the overnight or two day service of the
most expensive shipper who did not give them a volume
discount. This added up to a significant amount of money over
time. As a result, the administration and finance directors
decided to only allow employees to send packages through a low
cost shipper who would give them a volume discount.
After their decision was made, they sent out an e-mail to
everybody in the company notifying them of the change. Within
thirty minutes, several employees responded to the e-mail to
complain about the new policy. A couple of them argued that
they needed to use the more expensive shipper occasionally,
because they had to send items that had to arrive on time such
as payroll checks to the other offices or product information
brochures to interested customers. The low cost shipper had
the reputation of occasionally being late or losing a shipment
and that was not acceptable.
The employees were most disappointed because they were not
notified that there was a serious problem with the money spent
shipping packages. Nobody had asked them how the problem could
be solved while still meeting their respective shipping needs.
Therefore, the administration and finance directors decided to
postpone the implementation of the new policy to see if the
employees could come up with a solution that would accomplish
all of their objectives.
The employees ended up contacting one of the other high
quality shippers to see if the company could get a volume
discount if they let the shipper deliver all of their
packages. The shipper offered a fair discount which the
company eventually accepted. In addition, only the packages
that absolutely had to be there in the next day or two were
sent through the overnight or two day service. All of the
other packages were sent through the ground service which took
a few days longer but was much cheaper.
The employees also encouraged each other not to wait until the
last minute to ship items. In the past, a lot of employees
would wait to ship a package until a day or two before it
needed to be there. The reason was they knew it would still
arrive on time and they were not concerned with the cost.
The employees ended up embracing the new policy much more
because they were a part of the decision making process. If
the new policy would have been imposed on them without any
input, it is almost certain that the employees would not have
tried as hard to ship their own packages early and encouraged
others to do so. In addition, they actually did a lot of the
work for the managers after they postponed their initial
decision by contacting the other high quality shipper and
negotiating a volume discount. In hindsight, the managers
should have shared the information regarding the high shipping
costs with the employees from the beginning and then asked
them for suggestions regarding how the problem might be
solved.
***
A Chicago interior design company bought out a smaller
competitor that had an office in the suburbs forty five
minutes away. About two-thirds of the staff from the company
that was bought out were laid off. The others were moved into
the main Chicago office. Once the office in the suburbs was
just about to be completely vacated, the office manager from
the Chicago office had the calls to the office in the suburbs
forwarded to the main office. But the office manager failed to
tell anybody at the Chicago office that he had done
that.
As a result, the main office was getting what they thought
were some very strange calls for a couple of days when the
office manager was away closing down the other office.
Numerous times the support staff answering the phones had to
say "Sorry, but you have the wrong number." The callers would
often call right back since they were certain they had the
right phone number. This would further agitate the people
answering the phone. And the people calling, including some
important customers, had no idea why the phone number they had
used for so long wasn't working.
Finally, the office manager was made aware of the strange
calls when he called into the main office to check up on
things. He confessed that the line from the company that was
bought out had been forwarded beginning two days prior to
that. Needless to say, the members of the support staff at the
main office were very upset. All the office manager had to do
was send out a mass e-mail to everybody at the main office and
none of the problems would have occurred.
SUMMARY
Don't leave
your employees in the dark about what is going on. Share
information with
them.
