Candid Candour

In his book "Winning" the renowned ex-CEO of GE, Jack Welch, calls the lack of candour the biggest dirty little secret in business. I would agree. I have had many experiences where I have lamented the lack of candour in business. Let me share just one experience.

Triple or nothing

The company I was working for was in a dispute. The dispute had been running for some time. Whilst the other party was the one in breach, all our efforts to settle with them were failing. I thought a face to face meeting might sort things out quickly so I arranged a meeting at their lawyer's office.

On arriving at the lawyer's office I dispensed with the usual posturing and games and led with my best offer. I made it clear it was the best offer and that I was making it to avoid pointless litigation. My offer was extremely generous - we would accept half of what we were owed and there would be no legal costs. Let me be clear - this was not charity. I estimated that giving up half of what we could recover was a small price to pay considering the time and cost of litigation (even allowing for some cost recovery).

The other lawyer assumed that my openness was a gambit. Vainly he tried to push the offer down further until eventually, frustrated, he declared that there would be no settlement. Fast forward a few weeks and I found myself in the Supreme Court facing the other party's barrister. The barrister realised the poor position of his client and was desperate to settle. We ended up settling but the other party paid the full amount they owed plus legal costs which were equivalent to another 50%. Putting that another way, they paid three times as much as they could have if they had settled. All because the lawyer on the other side did not know how to deal with an open and frank discussion. Whilst I spoke candidly, he was lost looking for the covert meaning and traps so typical of contemporary business discussion.

The benefits of candour

The word "candour" (or if you are American, 'candor') refers to the quality of being open and honest or frank (not the noun, the verb!). There are huge benefits to candour if they can be harnessed. Let me share a few that Jack Welch identifies from his time at GE:

1. Candour gets more people in the conversation. With more people in the conversation ideas flow and options open up.
2. Candour generates speed. With the idea in everyone's 'face', it is easy to move to debating options and getting the job done. There is less time on playing games and more time for actual work.
3. Candour cuts cost. This is sometimes hard to gauge. The cost might be indirect such as increased productivity due to shorter or fewer meetings. But in some cases it is a real, direct cost. Think of my experience above. The lack of candour on the part of the other party led to them paying 3x as much as they should have.

Sweet nothings

So if candour is so great, why don't people use it? You could probably come up with a few reasons but here are two of my favourites:

1. Candour makes people awkward. We are socialised to whisper sweet nothings to each other. A little mutual flattery keeps the wheels of society turning. Sure, there are times when you are asked a question that you may need to prevaricate ("does my ... look ..."). But in business, that is rarely the case. Openness allows understanding. Understanding facilitates relationship. Relationship in turn facilitates agreement.
2. Being open weakens your negotiating position. Being open does not mean that you simply become a doormat. A good negotiator knows their position and how to maximise it by seeking common ground and mutual gain. When all else fails a clear understanding of their alternatives allows them to walk away. I was taught by a very wise senior lawyer never to underestimate the power of refusing to play the game. 

Being true

There is something inherently 'right' to me in being a straight talker. Maybe that's because I am terrible at lying. Maybe its because I realise, like Welch, that candour does unclutter. When people know where they stand they can make informed decisions. Whether that be when dealing with employees or dealing with counterparties - people making informed decisions almost always leads to a better outcome.

Ultimately I am open because I want people to be open with me. Showing them mine hopefully encourages them to do the same. When that fails, well, there are always lawyers!