Revelations at the Banking Royal Commission had many of us appalled at the ethics and behaviour in our major banking organisations, however there are important lessons and consequences for leaders beyond the financial sector and their teams in what happens when only the good news story is told.

The Banking Royal Commission has left many Australians reeling at the scale and depth of the behaviour of banks and other financial institutions, with revelations of employee misconduct, unethical behaviour at senior levels, interference in so-called independent reporting, and many leaders pleading ignorance of these behaviours.

But that’s not to say there weren’t voices trying to be heard within these organisations to prevent some of the excesses. We all see leaders around us that dominate and see themselves as unquestionably ‘right’ and those around them feel that they can only say what is safe to say. Simply having an open-door policy is not enough to facilitate speaking truth to power.

The problem with this situation is a perennial Medusa’s head: there are obvious and less obvious consequences for challenging leadership. Whether it’s at an executive level or at a project level, there are many reasons that people go with the flow rather than speaking truth to power.

Why is it so Hard for People to Speak Up?

Leaders can get disconnected from the reality of what’s going on in their businesses and in high pressure or toxic environments, some staff feel unable to challenge the equilibrium for fear of downflow consequences … for their careers, their teams, or their projects.

The BRC has shown what happens when leaders don’t have the right information, but does it point to a genuine blindness of how hard it is for others to speak up, a fundamental problem with integrity in the workplace and or is it a more embedded cultural problem?

Take, as an example, the PMO and its role in accountability.

One of the core functions of a PMO is governance over project reporting. For CEOs and other senior executives, information flowing upwards should be accurate, independent, and – from our perspective – fearless in calling out the risks and issues that they need to be aware of for the project outcomes that the business is seeking.

Unfortunately, frank and fearless information is often not forthcoming for a number of reasons.

We Just Don’t Want to Know – Unless of Course it’s Good News!

Many organisations work on an unwritten ‘less-is-more’ policy when it comes to the delivery of bad news. Executives, for whatever reason, become extremely nervous or even hostile when it arrives on their desk.

The consequence is that those reporting to the executive may start to only feed through the good news rather than the realities of a situation to avoid getting slammed for delivering unwanted news. That in turn drives a range of problems into the business, seriously undermines accuracy in reporting and, consequently the executives ability to make quality decisions.

How can any leader make the right decisions if not in receipt of all of the facts – good, bad or otherwise?

If fallout from the Royal Commission and the implementation of the BEAR scheme is anything to go by, executives are being driven to being more accountable for the decisions they make and the people who report to them – not waiting for news to come to them. It’s no longer acceptable to shareholders, for example, to say, “I didn’t know.”

Flipside: We Think They Just Don’t Want to Know!

But what happens if, at the executive level, leaders do want to know the warts and all news of how business units or projects are progressing but the teams below them are reticent to deliver bad news? Let’s assume for a moment that they want the critical and relevant information, be it good or bad, to make the best possible decisions.

For example, if the business has an inexperienced project cohort – or one that lacks confidence and ability to deliver adverse news – then it’s often the case that they don’t send the critical and relevant information back up the chain of reporting for a variety of reasons. It may be cultural, political, or simply inexperience.

This puts leadership into a challenging position, because it runs the risk of swimming in a sea of so-called ‘watermelon’ projects, i.e. those that look to be green on the outside but dig under the skin enough and they are entirely red on the inside.

This is where culture is a critical challenge for both executives and their staff: If people in the organisation believe that they should only tell leaders what they think leaders want to hear instead of what they need to hear, it’s doing both a massive disservice and putting business and project outcomes at significant risk.

The Toothless, Inexperienced or Complicit PMO

And what of the PMO? The PMO is a last line of defence for accurate and fearless reporting of project challenges and often have the final say about what information is passed onto the executive. Their role is to protect the governance of both the project and its reporting.

Unfortunately, not all PMOs have the heft in an organisation to call out bad news and in a lot of cases don’t have the experience or fortitude to know when the wool is being pulled over its eyes.

Both issues are lethal to the flow of accurate information and this is just as damaging as the other examples above in putting their executive’s ability to make good decisions in jeopardy.

Delivering Bad news is an Artform.

It is human nature to want to be liked and if you are always the messenger bearing the unwanted news, there is enough world history to suggest you may end being shot. But what is the alternative? Delivering only good news stories which in fact can do a major disservice to not only the senior executive but the company as a whole?

Nobody can box shadows, this is why some courage and truth in reporting is essential for all project professionals.  It is hard to have brave conversations in challenging environments and if true accountability is the objective, then good decisions can only be made with accurate information.

So if there is one learning out of the BRC creating an environment of pretending everything is A-OK, when in fact the opposite may be the situation, is on borrowed time as a corporate culture. The new approach may indeed bring forward a more warts-and-all-approach when speaking to power.

As project specialists, we develop fit-for-purpose strategy and project assurance.  Contact us here to find out more about how we work with your teams or call 02 9098 6300.

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