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May 17, 2004 01:00 AM

In the loop

Keeping higher-ups informed is essential to running a successful business

Charles S. Lauer
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    One of the first lessons I learned after I started my career was to make sure to keep my boss in the loop. The person in charge should never be blindsided by bad news if there is a way to avoid it. It's up to the staff to keep the person in charge aware of problems with clients, products, personnel or finances. If the top executive gets an unwelcome surprise, the manager, the subordinate or both may get the boot.

    This situation came up recently when I was chatting with a friend who is an officer of a prestigious investment firm. He talked about a good friend who had recently been fired because one of her senior employees didn't keep her informed of some trouble brewing with a major client. My friend was livid. "People should always keep their bosses informed so they don't get surprised, but I'm seeing more and more of this happening. They say young people today are smarter and more talented, but they seem to lack any basic common sense. My friend who was fired had a great job and was an excellent leader, but because one of her trusted lieutenants didn't bring her up to date on a possible problem, she learned about it too late, when it was completely out of control and she couldn't rescue the account. It almost brought the company down and when the board met they had no alternative but to fire the chief executive officer because the incident occurred on her watch."

    Maybe they don't teach these things in business schools because everybody assumes that people with brains would understand how important it is to make sure their bosses are kept informed, even if the news is bad. If that is the case, they're mistaken; schools need to teach communication skills.

    I know that many people are afraid of imparting bad news for fear of the "shoot the messenger" syndrome. Certainly there are bosses who don't want to hear bad news and will rant and rave when they hear it, even to the point of firing someone on the spot.

    There is a way of communicating information to a boss that avoids this kind of situation. Bad news should get to the chief immediately and be given in the context of how it happened and with a plan of corrective action. Of course, this is rarely done. Instead, people sit on bad news, hoping it goes away, or worse, engage in a back-channel campaign to put the blame on someone else, even the boss.

    A few months ago, a good friend of mine was fired from his job as CEO of a major hospital system. Up until that point in his career, he had been considered one of the top people in the business. He is understandably bitter about what occurred. Not only did one of his trusted executives not keep him informed, but the person went a step further and approached one of the system's board members and told him what was happening. At the next board meeting the CEO looked incompetent because he had no knowledge of what the board member was talking about. Not long after that my friend lost his job.

    The same thing happened to a friend who led a major industry association. A subordinate failed to do his job and didn't tell the boss about problems with a major contract. When the whole thing blew up, the CEO and his organization looked like fools. As a result, a number of top executives lost their jobs and their careers were nearly ruined because one person didn't keep the top guy informed. Sounds implausible, doesn't it? But it does happen.

    Of course, communication is a two-way street, and bosses often fail to keep their staff informed and then blame subordinates when things fall apart. I recently spoke to a large group of managers in Phoenix about how important it is for leaders to keep colleagues informed at all times. Too many senior managers seem to think that subordinates can read their minds and know what is going on without being told. These leaders have departments working against one another. If luck holds, you have chaos as a result. If not, you have disaster.

    It's just common sense. Good communication is essential to any group's morale and success. It makes a smooth-running operation as opposed to a disjointed mess. What is so hard about communicating? When in doubt, err on the side of communicating too much rather than too little.

    Even though a boss may berate you if you bring him or her bad news, don't back off. After the dust settles most reasonable and intelligent bosses will recognize that you are doing the right thing. If not, at least you know it's time to go work for someone else.

    Most of the time good communication will solve problems. We may live in an age where corporate loyalty is on the decline, but even if only for self-preservation you still should keep your colleagues informed. Communicating is always a good policy.

    Keep in touch,

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