What do leaders do

Leaders must create an environment where the brutal facts are aired without hesitation.

A strong, charismatic leader can be more of a liability than an asset if it means others wish to hide the unpleasant truth from him.

In management meetings, leaders must take the role of a Socratic moderator, asking questions to uncover truthful opinions, not giving ready answers. Leaders must also encourage debates to rage in the meetings so the best possible decisions are reached.

Consider Pitney Bowes, which went from being a postage meter producer about to lose its monopoly to being a major document handling solution provider and outperforming the general stock market by a factor of seven. Regardless, management at Pitney Bowes spent most of its time in meetings discussing worrying facts, like “the scary squiggly things that hide under rocks” rather than celebrating their successes.

When mistakes are made, they must be studied carefully to understand what went wrong, but blame must not be assigned, since it would discourage people from airing the truth.

Red flag mechanisms which raise alerts at critical business signals can force managers to pay attention to the harsh facts.

Good-to-great companies did not have more or better information than the comparison companies, they merely confronted it and dealt with it more honestly.