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You are here: Home / Human Resources / One More Benefit of A Great Corporate Culture: Fewer Leaks

One More Benefit of A Great Corporate Culture: Fewer Leaks

February 28, 2013 By Lindsey Perkins Wade

If you weren’t already convinced that having a positive corporate culture is essential to your company’s success, especially if you’re planning to sell your business at some point, here is one more reason to develop a culture that makes other CEOs jealous: fewer leaks.

Features of a Great Corporate Culture

There are a few attributes that all leading corporate cultures share, things like trust and respect. These foundational elements help empower employees, which is something we’ve covered a lot here on The Private Business Owner.

There are also a few things that great corporate cultures are lacking, namely unproductive employees. Slackers not only fail to get any work done but they also bring down morale – negatively impacting the positive environment management works so hard to foster.

Another Reason To Create A Great Corporate Culture

Having a great culture corporate is important for a variety of reasons: it helps motivate employees; it leads to more ethical behavior; and potential new hires factor it into their decision-making process. All of these things contribute positively to the bottom line.

But there’s another benefit to a great corporate culture that you can add to the list: It results in fewer information leaks.

A few weeks ago writer writer JP Mangalindan recounted a story from LinkedIn CEO Jeff Weiner.

The question: Why hasn’t LinkedIn been the victim of numerous news leaks over the years? Weiner chalks it up to his company’s transparency.

“I’ve come to learn there is a virtuous cycle to transparency and a very vicious cycle of obfuscation,” Mangalindan quotes the tech CEO as saying.

A Universal Lesson in Trust

How right the LinkedIn CEO is. Let’s think about a similar situation that everyone’s experienced.

At some point in time when you were a kid, I’m willing to bet you overheard your parents talking about something that they didn’t want to discuss with you. When you asked them about it, they refused to tell you anything, insisting that you were too young or giving you some other equally frustrating standard parental response.

How did you feel when this happened? What did this inspire you to do?

Depending on your age, I bet you were curious about the forbidden topic and possibly angry and resentful that they wouldn’t trust you with the information. Your next goal was probably to learn as much as you could about the topic of conversation to get back at your parents. Tell me if this sounds familiar: “I’m going to show them. I’ll find out exactly what they didn’t want me to know.”

When a company’s “parents” (a.k.a. leaders) refuse to share information with their employees, they’re showing that they don’t trust the staff. This breeds hostility, resentment, and sometimes a need for revenge, especially if the CEO clamps down and shares even less information.

And that’s Weiner’s point. Transparency, which he claims is part of his company’s corporate culture, prevents a lot of this ill will and the desire to leak confidential information to the media or competitors.

Of course, I am not suggesting that you share all information with your employees.  Some items are important to guard and protect. However, the more you can share about how your company is doing, the more buy-in you will get from your employees, creating an environment where your employees know that you trust them. Generally speaking, employees who feel trusted perform far better than those that aren’t.

In fact, honesty about company performance can also help when times are tough because employees understand why cuts or downsizing are being implemented. It is a fine line to walk, but companies that have a positive corporate culture usually have leaders proactively sharing with employees, especially those staff members that are key to the success of the company.

© 2013 Generational Equity, LLC All Rights Reserved

What can you do today so that your business will be appealing to buyers when you want to sell it? Learn when you download a free copy of Building and Exiting a Desirable Business today.

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Filed Under: Human Resources, Operations Tagged With: corporate culture, empower, People, respect, trust

About Lindsey Perkins Wade

Lindsey Perkins Wade is managing editor of The Private Business Owner.

The Private Business Owner – A Generational Equity Blog

The Private Business Owner is an online publication sponsored by Generational Equity. PBO aims to provide useful tips and information that will improve both the lives and businesses of entrepreneurs, as well as provide valuable insight into the company exit process through bi-weekly M&A Digests.
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