Written by Joe Driscoll

November 26, 2009

Ask a business owner what time it is and they’ll probably reply, “why do you want to know.”

A penchant for secrecy is a common characteristic of business owners. Secrecy is an acquired trait. When a business gets started, there just aren’t too many people to confide in. As a result, the business owner learns and becomes comfortable with secrecy.

This is the information era, however. Access to and the use of information is the key competitive tool for all businesses. The owners of closely held businesses must jettison the historical shrouds of secrecy and empower their employees with the information they need to be full partners in the business.

When decision making takes place close to where the decisions have an impact (decentralized decision making), better decisions are made. The more information available to those making decisions, the better is the decision making. The logic is simple. The more you make information available throughout your organization, the better will be the decision making.

Things weren’t always so pretty when the business first began. If the bank knew had bad things really were, they might have called the loan. If the employees knew how bad things were, they would have quit along time ago. If your spouse knew how bad things really were, you would have had to quit and find a real job.

And if your in-laws ever found out how bad things were, they would have said, “see, we told you you should never have married him in the first place.”

The business owner doesn’t have any one to totally confide in during the early days. As a result the real story is kept close to the chest and the habit of secrecy is established.

During these formative years, something else slowly begins to happen. The business starts to enjoy some success. You think that now you might be able to give up your secretive habits, but you don’t.

In the beginning you were hiding how bad things were, now, you start to hide some things that other people “just wouldn’t understand”. It might be your spouse’s Mercedes on the company books or the terms of the shareholder loans, but for whatever reasons, success perpetuates secrecy in the closely held business. The bookkeeper’s job isn’t just to keep the books, it’s to hide the books.

There is a line of distinction between personal information and business information in a privately owned company, but it is a line that most people can easily see and respect.

Dropping the shrouds of secrecy and permitting the free flow of relevant business information will be more of an evolutionary process than a revolutionary process. Providing too much information all at once without the time, background, and perspective to effectively utilize it, can also be unproductive. Empowering people with information confers responsibility on them. As with any change, it can be a bit threatening to begin with.

Since experience shows that the closely held business has been too secretive, if you make an error, make it on the side of providing more, not less information. The gossip grapevine abhors a vacuum. If the facts aren’t out in the open, the rumor mill will move in.

Working for a business without having all the information you need to do your job is like playing football without being able to read the scoreboard. Sure, if the players know the strategy and the score, they might second guess the management, but the second guessing is a lot more likely to happen if they don’t have any idea what’s going on.

There’s always the risk that if the players knew how far ahead or behind they were, they might ease up. But in actuality, the opposite takes place. Knowing the score and how much time is left on the clock tends to act as an incentive. When your employees know the score, their interest and initiative in playing the game will increase.

In large companies, the dissemination of information is often hindered by excessive computer generated data and by insecure and mistrusting managers. To maintain an advantage over their larger and better financed competitors, small businesses must insure access to relevant information. The access to significant business information enables employees to reach new levels of satisfaction that leads to a higher commitment that results in improved performance.

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