When serial entrepreneur Mac Lackey started his first business, he never shared bad company news with employees. In his view, challenges like losing an important customer were his personal burden to carry.
Over time his thinking changed. Experience taught him that being transparent about company news - both good and bad - was crucial to morale and building trust.
The power of transparent leadership was a key theme at "Power to the Small," a panel discussion in Charlotte, NC sponsored by Windstream, a provider of advanced network communications and technology solutions.
"It's human nature to not want to admit we're wrong or that we don't know everything," Lackey said. "People think it makes them vulnerable and that others will lose respect for them. But the opposite is actually true - openness will make people respect you more."
A transparent culture can also help a company operate better, enabling employees to redirect resources to address challenges when they arise.
Laying the foundation
Charlie Mulligan, founder of Brewpublik, a Charlotte company that uses a computer algorithm to select craft beers for subscribers and delivers the beverages to their doorsteps, believes that an entrepreneur must establish a culture of transparency from the outset. Far from worrying employees more, disclosures go a long way to alleviate anxiety by enabling the team to focus energy on solving problems. Employees, he believes, will go beyond the call of duty for a CEO they view as a human being, but not one who is aloof and impervious to the day to day.
Whether the goal of a business is to change the world or create the best tattoo shop on the block, Lackey agrees that having a shared vision pulls companies through tough times. As Mike Tyson put it, everyone has a strategy until they get punched in the face.
"You get punched in the face a lot as a small business, which is why it's so important to have a shared vision that gets everybody motivated," Lackey said.
A shared vision can motivate the founder as well. Once his colleagues buy into that vision, Mulligan said he finds that he is relieved of some of the doubt and anxiety that come with launching a startup. At times, when he feels stretched to the limit, his teammates' energy will reinvigorate him.
"When someone on your team is having a tough day, everybody builds one another up," he said.
An open company culture is a circle. It starts at the top, connects everyone and never ends. When it is built on transparency, that culture shores up the business in tough times, sharing the burden of bad news and enabling the team to tackle challenges with an established system of support and shared responsibility.
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