But how do you create a company culture of honesty? It’s up to the founders, and it’s best to start early.
Screen for honesty
If you hire dishonest people, your company culture will be dishonest by default. So place a high value on honesty in your job candidates. To figure out if someone is honest, use your observation skills. Do any of their resume items seem exaggerated? Ask about them, and watch their response. The book Liespotting identifies a variety of signs of dishonesty: a frozen upper body, placing a barrier between you and your interlocutor, repeated touching of the mouth or eyes, fake smiles (where the eyes don’t crinkle), and gestures that don’t coincide with words (e.g., shaking the head no when saying something affirmative).
Explain the “why”
Instead of issuing an ultimatum for honesty, try to explain why it’s valuable and make employees want to be honest. Explain that keeping secrets makes problems and mistakes stick around longer. It can delay schedules, which means disappointing partners and investors. And it means you can’t trust the words coming out of your coworkers’ mouths, which is frustrating and paralyzing. To show you’re serious, put honesty in your mission statement or handbook.
Encourage open feedback
A culture where everyone is sharing feedback, improving, and moving quickly past mistakes is a more productive one. To create it, lead by example and ask for ideas and critiques. Set up individual meetings with your team leaders specifically to hear their updates and thoughts. In the same vein, give candid feedback to your team – not harsh, but in the spirit of helping everyone get better. And encourage employees to do the same for each other, as they do at Mindvalley. To facilitate this, Smith has someone other than the CEO run brainstorming meetings. For some reason, people feel more comfortable being honest when they’re not talking directly to the head honcho. And expect honest feedback from investors, too. “Recently, I have seen some equity investors who make this one of their key principles – not mincing words and not tolerating ‘spin,’ for the good of the relationship and the best ROI,” says Nancy K. Eberhardt, CEO of Pathwise Partners.
Share updates
If you don’t share updates about your company’s progress, employees can easily suspect that you’re hiding something – especially at a startup, where the long-term survival of the company is sometimes in question. Oscia Wilson, for example, committed to complete transparency at Boiled Architecture. She now gives employees access to company financial reports, bank transactions, and salary information. As one of its core values, Zappos commits to “build open and honest relationships with communication.” Part of that involves a quarterly all-hands meeting, where employees hear from executives about the state of the company and get entertained by guest speakers and fun videos. A simple weekly or monthly meeting like this can keep the questions and doubts at bay.
Set incentives
If you’re more of a behavioral economics type, make sure to put the right incentives in place. Most importantly, don’t punish employees for their honesty about a problem or mistake. On the other hand, make sure to check employee reports and don’t tolerate any number-fudging or dishonesty. Little things like this convey that the company doesn’t value honesty and can lead to more serious indiscretions. Finally, giving equity to employees can be a good way to align their incentives with the company’s. And that is the ultimate goal of an honest company culture. It won’t always be easy – there may be painful realizations or awkward moments – but you get a boost in productivity and the plain and simple refreshingness of honest communication.
