Have you heard of Facit, the Swedish world leader in mechanical calculators?
Then you may also have heard how two engineers disturbed management with their insistent warnings about the Japanese transistor revolution. This, they said, will lead to far better calculators at a fraction of the price. Top management sent this anoying duo off to a remote office of this multinational corporation and was caught entirely by surprise a few years later, when the market disappeared to Japan.
Openness starts at the top. The top management of Facit was a group of middle aged men. All management groups were at this time (the late 1960’s). The board of Facit should have been in a state of panic, but had “calm enjoyable meetings followed by a good meal, topped off with coffe and cognac” according to Lennart von Kantzow who became president in 1970, when sales peaked right before the catastrophe struck.
This story is told often in Swedish business circles. It is a good lesson to remember. The factors that gave you success yesterday do not necessarily give you success tomorrow. Karl Weick describes how success freezes our thinking. Facit had been so successful for so many years that management basically had developed tunnel vision or success-induced blind spots. Openness to discuss difficult issues is simply crucial to the survival of any major organization.
Interesting enough, openness to discuss open issues is also beneficial to your health. We ran the data from an engagement survey with the data from a health survey and found that people that felt free to discuss difficult issues at work were healthier. They experienced less stress, better sleep and fewer heart related ailments. Not being raise difficult issues at work will hurt your company and your health. That is not the end of it. It is also a wet blanket over your motivation. Look at the graph below.
No openness no motivation and also no enjoyment of work. Those who have openness are both motivated and they enjoy their jobs. This relation is very robust and based on 145 000 (motivation) and 70 000 (enjoying work) responses.
The key question is how to open up for difficult discussions. Research points to diversity as a given starting point. Management groups and boards with a healthy spread of backgrounds are much less likely to behave the way they did at Facit. One way to open up the eyes at Facit could have been the introduction of female members in management and board. Recent research shows that this is a simple way to activate passive board members. This could possibly have alerted them to the Japanese development. We see a similar pattern when we look at the responses of 12 companies on the issue of “openness to discuss difficult issues”.
Openness to difficult issues is clearly better in companies with an even balanced management group. The gender mix of the top management group explains nearly 1/5 of variance in openness to discuss difficult issues. Perhaps that is another reason why companies with an even gender mix in their executive committee have performed better financially since 2008?
What do you think?
Ps. Did you read Glass Ceiling one and two?