As in government, so too in business

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Last Saturday, Mr Kishore Mahbubani, dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore wrote an interesting article in the Straits Times, following on from Mr Ho Kwon Ping’s lectures at the Institute of Policy Studies. In his article, Mahbubani continues to extol what Ho spoke about in transparency, quoting Ho’s key point, “A governance culture of participatory democracy can work only if the institutions of civil society can be actively engaged in decision-making… For that to happen, civil society players need access to that lifeblood of robust discussion: freely available and largely unrestricted information.”

Yet, as in government, so too in business. Many companies in Singapore are run like the government, shrouded in secrecy. That Singapore was ranked 63rd in the Global Open Data Index, alongside countries like Bangladesh, Bermuda, Nepal and Senegal, makes a point that the powers that be in all sectors of the country eschew transparency. Yet just as a country needs open information for better decision-making, so too do businesses. If senior management distrusts their colleagues with vital information on how the business is moving along, if key information is not shared for better decision-making, then the company will be doomed by the inferior decisions of a few in the organisation, putting paid to all the hard work of the people on the ground.

I recently met with a member of the senior management of a major utilities company. He shared with me that the company was not doing well, and if they could simply breakeven, that would be considered a great result for this year. Yet when I questioned if the management had shared this situation with the ground, he replied, “No need to say anything. Just look at the machine standing idle in the corner, and they will know what is happening.”

Is that sharing information?

Absolutely not! When management is silent on such matters, the ground is free to make its own conclusions. They could conclude that while the bottom-line could be hit this year, prudent financial management in the past would have allowed them to see through this rough patch. Or they could conclude that since nothing has been mentioned, it is not a big deal; perhaps the company has diversified enough to ensure it is profitable. But they could also conclude that the business is doing so badly that no one wants to face up to it, therefore, they should start looking elsewhere. No news is certainly not good news.

If a company has invested a lot to recruit the right people for their education and skills, and Singapore is certainly a country where there are many highly educated people, then it must trust that they can help the company in good times and in bad. Building on that trust requires that information be shared freely and timely. From financial matters, to human capital matters, to business matters. The more transparent the company is with its people, the greater the bond will be between management and the ground. Sure, there will be hits. Sure there will be people taking advantage of this openness. Sure, there will be acts of betrayal. But these exist even in closed companies. Yet open companies can count on the ground to counter such acts of disloyalty. They start being self-policing simply because they know what is at stake. They look out for the business since the business trusts them with vital information. They will limit the downside risk much better than management can through the shroud of secrecy.

As Singapore grapples with the next 50 years, and questions are being asked about how open the government will be in the coming years, helping ultimately to make Singapore more resilient, companies, too, should be asking the same questions. I wrote last week that culture eats strategy and structure for breakfast, lunch and dinner (See!4-warning-signs-your-culture-is-eating-your-organisation-for-breakfast-lunch-and-dinner/cnsk/5577d5000cf2df2eae4039bb), and I suppose the first solution is to adopt a more transparent information system. Otherwise, the company’s talent, who thrive on such an open culture, will leave, killing the company’s growth potential, leading, ultimately, to its death.

This is something that all the powers-that-be need to hear.

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