Being a start-up is not easy. Sample these: An irate customer sends an email to a startup company ??am disgusted with the quality of your service. I was referred to your company by my friend and I?ve just had the most unhappy time?? The customer support department does not forward the mail?and others like it, to the executive leadership. In another start-up?response to the board of directors from a CEO of a VC-backed startup ??we are doing fine. I?m confident we?ll hit and perhaps even exceed this month?s targets?? Of course, the board did not know that the two top customers of the startup were pulling out of contracts with the startup. The CEO knew but was scared to tell the board.
Then again, in another company, a board member writes a letter to the CEO of the company ??you seem to be stressed out lately. Why do not you get more senior executive help around you to help reduce the pressure?? The CEO replies, ??Thanks for your concern. Am doing fine actually. Am wondering if you had any other objective in suggesting that I surround myself with senior executive help?? The CEO was wondering whether the board was considering replacing him.
In another scenario, there?s great unhappiness and confusion in a company. Four of the 10 call-centre agents have been asked to go due to non-performance in the past two months. They do not know the reasons for their firing. They do not know what is the performance expected of them and consequently what constituted ?non-performance?. Then again, CEO to the board of a company: ?I really do not know what you want?a long-term goal for the company or a short-term plan on achieving break-even in the next 6 months. I am confused.?
The above scenarios are not fictional. They are all actual instances taken from different startups. There are, of course, many more cases involving communication between peers and across levels and layers. But these cases illustrate the critical importance of communication?especially in the chaotic and ever changing environment of a startup. As in most cases, the culture of open and honest communication starts from the top.
If the board of directors does not set clear expectations from the CEO, if the CEO does not share important company information with the board and employees, if the functional heads do not share news with the executive leadership, it is quite easy to visualise the rapid collapse of such a company.
A company that hides from itself, one that is afraid of confronting the reality of the situation and one that takes refuge in lies and half-truths cannot be expected to generate trust and goodwill among all stakeholders.
The first step in creating a culture of open, frank, free and candid communication is to encourage people?including employees, customers and partners, to speak out and to not punish people who have views that are not sugar-coated; to have clear and frequent meetings where people can voice opinions, suggestions, criticisms and arguments?and to respond to these concerns and views of employees, customers, partners and investors.
Companies around the world and across different industries have had to deal with severe and expensive consequences resulting from no or poor communication.
They?ve had to deal with terrible loss of image, product recalls, fall in stock price, and public firing of senior executives just because everyone pretended that a problem did not exist and that the problem would go away if ignored long enough. Well, in today?s day and age, you cannot hide all your problems from all the concerned people for all time. Isn?t it, therefore, better to have the ?people? on your side when things go wrong as they inevitably will?
What do you think?
?Sanjay Anandaram is an advocate of entrepreneurship development. He?s involved with Nasscom, TiE, IIM-Bangalore, and Insead business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own