Shae Hong

Honesty is something that we all assume is a given. As children, we’re told that honesty is the best policy. It’s just the right thing to do, right? Once we enter the real world, though, we realize there are times when business decisions come into conflict with our personal values. t Before we know it, we’re running our lives in a way that is contrary to our values. 

Whether it’s personally or professionally, you have a duty to be honest—especially when it’s the hard thing to do. 

As a business leader, you probably have to make a lot of tough calls. In a rough environment where you’re worried about your team and your bottom line, honesty sometimes takes a back seat to profits. It shouldn’t.

5 Reasons Honesty Matters at Work

But when profits are what motivate us instead of transparency, we risk losing everything. Whether you lose the public’s trust or erode your employees’ confidence in your abilities, withholding information or “sugar-coating it” can significantly damage your earning potential. It might seem like nice guys finish last, but in reality, honesty has a place in the world of business. When you commit to focusing on honesty at work, you’ll start to see your business improve in five ways:

Honesty Begets Honesty

Leaders are responsible for creating the culture they want to see. That means you have to be honest if you want your employees to be honest. As leaders, we’re the ones who set the tone for our company culture; all change starts with us. 

And no, a “culture of honesty” isn’t lip service. It’s a real, tangible result of honest leadership that affects how employees behave at work. For example, your employees would stop seeing performance evaluations as a criticism of their work and instead see them as a coaching opportunity to get candid feedback for improvement. They might also stop feeling the need to tell white lies about how they use their PTO.

I’m a firm believer that honesty leads to more motivated, engaged employees who deliver more value. 

It Minimizes Regulatory Concerns

In 2016, industry regulators discovered Wells Fargo employees had been creating fake customer accounts. Obviously, employees were working in a dishonest environment and that had a real financial impact on Wells Fargo to the magnitude of $575 million

Honesty definitely means doing the right thing, but it also means you’re less likely to run afoul of regulatory issues. If you’re operating with integrity from the start, you don’t need to worry about skirting the rules. 

This also goes for libel and false advertising. Avoid losing public trust or ending up on the FTC’s naughty list by promoting your business in a way that stays true to its core values. Not only is it easier to remember what you said if you stay grounded and honest, but as we saw with Wells Fargo, it could save you millions of dollars.

Boost Customer Trust

To earn customers’ trust, you have to be trustworthy. Trust doesn’t happen overnight but when you dedicate yourself to running an honest business, you build trust with your customers. When you do the right thing, people want to work with you. Honesty is so hard to find in this world, especially from businesses and when you can pair quality products, processes, and ingredients with transparency, you begin to see a shift in how the public perceives your company.

Create Better Ideas

Lying is a painful habit. Sometimes you have to keep telling more lies to cover up earlier lies. It’s exhausting and stressful. If you’re presenting a facade to your leadership team, employees, or customers, you eventually start to feel it. The resulting stress will affect your quality of work, which may cause your business to be unable to innovate and stagnate, neither of which are good things.

Instead, a culture of honesty can get all of your ideas out into the open and foster a collaborative, comfortable work environment. When employees see they can share their ideas openly and without judgment, they’re motivated to tackle harder issues and more creative problem solvers.

Reduce Unproductive Conflict

Conflict can actually be helpful, but in a dishonest environment, you’re going to find a lot of toxic, unproductive conflict happening. Honesty gives employees an outlet to voice their discontent. You’re able to put everything out in the open without risk of retribution or punishment, instead of being forced to allow the issues to boil under the surface. Prevent negative attitudes, outbursts, and interpersonal conflicts by creating a culture of honesty from the start. You, your employees, and your business will thank you for it.

5 Tips to Create a Culture of Honesty

Businesses, their employees, and their customers stand to win from a culture of honesty. But how do you create something as abstract-sounding as a culture? Every business is different but here are five strategies I’ve used successfully in my own business:

Reserve Your Judgement

Humans are hardwired for judgment. While it certainly has its place, judgment kills honesty. If you want honest feedback from your employees, don’t denounce their ideas in a brainstorming session. If employees think you don’t like their ideas, they’ll stop sharing entirely and you’ll miss out on a lot of potential innovation. 

Don’t let yourself get mired in negativity. Honest leaders address the downsides or the challenges of an idea but they don’t judge. They also know that not every idea is a winner but that a golden idea can come from anyone at any time. Support your employees when they come to you with ideas, even if they don’t work out.

Create Feedback Systems

You want employees to be honest, but have you set up the right systems and processes for productive honesty? After all, the truth can hurt. 

First, coach your team on how to deliver feedback. It’s important that everyone on your team knows how to be transparent without being cruel and when people understand how to give honest feedback, they’re better suited to receive it. 

Second, be available to your team. Whether that means creating one-on-ones or instituting an open-door policy, make sure your team has access to each other and to management. 

Third, consider anonymous reporting systems. I’m not always a fan of anonymity but for employees who don’t feel empowered to attach their name to a piece of feedback, this can be important.   

Fourth, don’t be afraid to set up a process for employee coaching. While most people see these as “critical evaluations,” I look at them through the lens of an honest coaching conversation. It isn’t your job to make employees feel bad, it’s your job to help them improve in every way possible. Focus on what they do well and where they need to improve. Give them resources, ideas, and support so they know how to meet your expectations.

Act on Honest Feedback

Did your employee tell you that users will hate a new product feature? Or did they mention that your diversity initiative doesn’t go far enough for people of color? Whatever the issue, if an employee gives you honest feedback, it is important that you consider it. 

In an honest environment, people will only say what they feel if they know you’ll act on their feedback. As a leader, you have to put this information to work. That means, at a minimum, having a conversation about the employee’s concerns and soliciting solutions from them. 

Feedback builds a stronger team and a stronger business. Yes, it means there is some uncomfortable and hard work to be done but hard work translates into a stronger bottom line for the long haul. 

Empower Employees to Make Mistakes

It’s common for employees to lie at work, especially when they make a mistake. Most of these mistakes are honest oversights, though, and not intentional screw-ups. Even then, employees fear they’ll lose their job or get reprimanded by their boss, which may cause them to try to cover up their mistakes. 

With honest leadership, employees are empowered to make mistakes and learn from them. So instead of lashing out at your team for making an error, have an open conversation and try to see what went wrong. Don’t use this as a witch hunt but rather as a post-mortem to see what needs to be fixed. Look at mistakes as a process issue, not a people issue. 

Once employees realize it’s okay to fail, they’ll not only feel more satisfied at work, but they’ll feel supported enough to take bigger risks.

Deal with Dishonest Behavior

Unfortunately, you’re going to have some bad apples in the bunch. When honesty is a core value for your business, you need to hold everyone accountable to that value. That means having systems in place to deal with dishonest behavior. 

Define this in your employee handbook. What qualifies as dishonest behavior? At what point does dishonesty warrant action? Decide now so you won’t be caught off-guard when an errant employee crosses the line.

Honesty really is the best policy. It’s not easy and it might sting from time to time, but when you do it right, honesty will create a better work environment and position your brand to be more successful in the long-run. 

It all has to start with you. Model the culture you want to see. Hold yourself accountable to the same standard you hold employees to. Stay competitive, deliver a better product, and build an engaged team of skilled workers to take your business to the next level. Just do it with honesty and transparency at the forefront.