Fortunately for us, I am not alone in pointing out a crisis is the worst time to hide information.  Harvard Professor Amy Edmondson wrote a terrific article on this subject.

She teaches leadership at Harvard Business School and begins her article by observing:

If sunshine is the best disinfectant, the opposite is also true: Dark, hidden corners are great places to grow something truly horrible.

And no place is her statement more true than the opaque corners of the global financial system out of which emerge financial crises.

Transparency is “job one” for leaders in a crisis. Be clear what you know, what you don’t know, and what you’re doing to learn more. You can’t manage a secret, as the old saying goes.

Professor Edmondson doesn’t pull any punches when she says it is transparency rather than creating a narrative that is “job one” for leaders in a financial or healthcare crisis.

How does she define transparency?  Be clear what you know, what you don’t know and what you’re doing to learn more.

So do our leaders embrace job one?

Hiding bad news is virtually a reflex in most organizations.

This has been amply demonstrated during both the Great Financial Crisis and the current CoronaVirus Crisis.  Who can forget the assurances offered after Bear Stearns collapsed, and then Washington Mutual collapsed and even when Lehman Brothers collapsed.  Never did the troika of Hank Paulson, Ben Bernanke or Tim Geithner address the questions of what did they know, what didn’t they know and how were they going to learn about the cause of the crisis.  Instead, they proved Professor Edmondson observation “you can’t manage a secret” as they insisted everyone trust their ever changing crisis narrative.

Why don’t leaders pursue Professor Edmondson’s job one?

It takes courage to choose transparency — and wisdom to know that the choice is the right one for achieving the goals that matter to all.

 

For over a decade, I have pointed out opacity is the necessary condition for panic during a financial crisis.  The current CoronaVirus Crisis is showing this also holds true for a healthcare crisis.

Why is opacity necessary for panic?

Opacity prevents us from being able to Trust, but Verify.

It is part of our nature to use stories/narratives to make sense of the world around us.  We instinctively want to trust stories/narratives even when these stories/narratives say the end of the world is coming.

It is also part of our nature to know we should verify if the story/narrative is true or not.  In the presence of facts, we tend to find the situation might be bad, but the world is not coming to an end.  Hence, no need to panic.  However, in the absence of facts, we don’t have any way to show the world isn’t coming to an end.  Hence, panic.