One of my undeniable truths of business ownership is #69: The moment you hire your first employee is the moment at which you stop knowing about everything in your business.
Most owners really like to know what’s going on in their business and all owners need to know what’s going on in their business, but most do not know – and they don’t know how to get to the full truth from their employees. From my own personal experience, I’ve had employees lie directly to my face about important facts which, had I known them would have altered decisions I made.
When an owner makes a decision based on information given to him/her by employees who are lying to save face, then the owner has multiple problems to content with:
- Lying employee
- Making a decision based on false information
- You don’t know what you don’t know
- You find out it was the wrong decision long after the damage has been done
Proverbs 16.13 says this: “Kings take pleasure in honest lips; they value a man who speaks the truth”.
If you’re not getting the full, unvarnished truth from your staff, you need to ask yourself “why?” Why do they not tell you the full truth? Let me offer several suggestions for your consideration.
First, the problem might be you. Most entrepreneurs are highly talented people who are highly competent at something. Often, they wrongly assume that their competence in their given area extends to all areas of the business, including people management, marketing, sales and so forth. I’ve met more than a few owners who beat up their staff verbally, discount new or conflicting ideas and essentially killing collaboration and teamwork in their business. Perhaps you become angry or irritated with new ideas, thinking that since you’re the owner, all new ideas should come from you. Obviously, these owners are totally unaware of the negative effects of their arrogance, but if check yourself on this: if people rarely or never give you ideas on how to improve operations, sales, marketing and so forth, then ask yourself “why?”. You might find that you are your largest obstacle to getting the full truth.
Second, the problem is they don’t think to tell you because you don’t ask. There’s a phrase “what gets measured is what gets done.” If you’re not measuring it (whatever “it” is) or if you’re not asking about it, then they might think you’re not interested, so they can let it slide.
Thirdly, the problem is you don’t have system in place to surface dysfunction in your business. I see this more often than I care to talk about: business owners whose world is only what they can see and touch. While they are highly interested in their product or service, they lack curiosity about the business aspects of their business. Besides, most of them are too cheap (not frugal – there is a difference) to spend adequate money on infrastructure systems. As long as they can live the lifestyle they want, they really don’t care all that much about the health of their business.
Fourthly, the problem is they confuse accounting reports with an accounting system. I can’t tell you how many businesses simply send their bank statements and receipts to an accountant who magically transforms their data into a monthly income statement with a balance sheet. I can’t begin to tell you how short-sighted this is (sorry to all you CPAs out there) because A) the owner really doesn’t read the statements and B) taillights information only goes so far. Without an accounting system, an owner can’t go in to look at the current numbers. The owner can’t slice and dice the numbers to see where they are really at. And in these scenarios, you can forget cash management. As long as they have money in the checking account, they’re fine.
Lastly, the problem is they trust their employees too much. I see this often as well: owners who don’t check in with their employees because they don’t want to micromanage, so they rarely, if ever, hold the employee accountable for anything. They employee creates his or her own little kingdom within the company and doesn’t share information as s/he should, so the flow of critical information becomes constipated.
Nearly all of this can be mitigated by a few simple, but profound actions on the part of the owner:
- The owner should become curious about his or her business and stay in touch with the critical systems of the business
- The owner should have systems in place to surface health or dysfunction across the core processes and accounting practices
- The owner should have clear, outcome-based expectations for his senior leadership team and hold them to achieving those outcomes on a regular basis
- The owner should have a balance between trusting his employees and verifying their work product
Owners who don’t get the unvarnished truth are often the reason for it. Most employees are not nefarious. They simply meld into the culture and processes of the organization. They next time you don’t have all the information you need to make a good decision, ask yourself the question “why?” and then see if you need to change your behavior first before trying to change the behavior of others in your company.
Bill English, Founder
Bible and Business