The Advantages of Absolute Transparency

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A few weeks before Christmas in 1995, Malden Mills, the original manufacturer of Polartec clothing, burned to the ground. For the community of Lawrence, Massachusetts, the crisis was devastating. Malden Mills employed 1,400 people, now out of work.

Except that’s not what happened.

Aaron Feuerstein

CEO Aaron Feuerstein did not want to see the 90-year old family business fail and his employees suffer. To reassure them, he sent every worker a Christmas bonus check of $275 and a message that said “Do not despair.” Then, despite all impediments, he worked with his employees, accountants, insurers, backers, and the community to rebuild the factory and make it better and more productive.

How a leader reacts to crisis makes all the difference in the world. The easy way out is to face reality and make “tough” decisions; but often those are the decisions made in isolation, behind closed doors, without the input or involvement of employees and other stakeholders.

“…and what would I do with that [ the USD 300 mio from insurance ] ? Eat more? Buy another suit? Retire and die? Huh …that didn’t go into my mind” says Aaron on camera

I believe that absolute transparency is a must for a leader during a crisis. Not only does it reassure and give employees critical information, but it involves them in the solutions process. As a result, the leader creates safety, builds trust, gains information, inspires innovation and speeds decision-making and execution.

When COVID-19 hit, Gravity Payments, a fintech company that focuses on payment processing for small businesses got hit hard. Revenues dropped 55% overnight. Bankruptcy was three to four months down the road.


Instead of making hard decisions immediately, CEO Dan Price called a company meeting and gave employees clarity into the predicament of the company. Then he called on them to help come up with the solutions. He followed up with 40 separate hour-long meetings with smaller groups of employees to generate more intimate dialogue.

Pay cuts were the obvious answer, but some employees could afford that better than others. So Gravity developed a form allowing employees to privately explain what level of pay cut they could absorb given their financial situations and demands. This information factored significantly in how cuts were implemented to everyone’s pay from executives on down.

A CEO acquaintance of mine named Anabel recently solved other needs with transparency. The head of a telecom services company in Singapore, Anabel asked employees what they needed to work and live when COVID-19 hit.

The answers were innovative, practical and doable. As a result, every employee got:
· A WIFI hub and a server connection at home
· A telephony upgrade when needed
· Appropriate equipment and supplies like sterilization machines, masks, vitamins, etc. in the office
· Free hotel stays if they were too afraid to go home and infect loved ones

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In addition, Anabel divided employees into three teams. Teams A and B divided the work on-site while Team C worked remotely to reduce the possibility of infection and provide back up if necessary.

Anabel also shared insights into what employees would need to do if they had to leave work or the city suddenly. This included preparing a go-bag and having important communication information at hand.

In a crisis, they say that it’s easy to “lose your head.” The danger is that a company will react badly in ways that impede operations, exacerbate losses and even put people’s lives in danger. Leaders are used to being the “head” of a company but during a crisis it’s important to involve and engage everyone in the work that needs to be done, the information that must be shared and the solutions that can be pursued.

One of the gifts of crisis is revealing that a company is far more than the sum of its parts. Click To Tweet

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