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Why You Should Encourage Whistleblowing in Your Organization Make it easy for employees at every level to raise a red flag about both problems and opportunities.

By Joel Trammell

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Image Source | Getty Images

The Austin office of a large tech company once had six levels of management between the Austin site president and the global CEO, who was in another state. This separation was not only organizational and geographical, but cultural as well. News did not travel up the org chart very well, if at all.

Related: Communication Determines the Success of Your Business

Trouble came when the Austin development team was asked about creating a new product. The group spent weeks gathering data and analyzing options. After extensive study, they produced a detailed report outlining why they did not think it was a good idea.

Six months later, word came down from above -- proceed with the product build. The team was flabbergasted and could not understand why the leadership did not heed their recommendation. However, being good soldiers, they went forward with the project and hoped for the best.

About a year later, the Austin site president visited headquarters and ran into the CEO. The CEO began to grill him about the new product and why it wasn't doing well. Finally the site president said in frustration, "Why did you make us build it?" The confused CEO replied, "I didn't make you build it. Your report said we should build it."

The CEO found the report and showed it to the bewildered president. Sure enough, while the report resembled the original from the Austin team, various, subtle changes had been made along the way. After six levels, what had started as a "no" had become a "yes."

Unfortunately, this chasm between leadership and those in the trenches is not unusual. However, the consequences of this old dynamic are growing more and more dire. Companies must move faster to innovate and adapt to dynamic market conditions. Consequently, CEOs must find a way to quickly and consistently harness the information, opinions and expertise from employees at every level.

Related: Larry King Shares 9 Lessons on How to Become a Master Communicator

The answer is to institutionalize whistleblowing. While the word whistleblowing may have a generally negative connotation, in this context it means giving every employee the means to raise a hand when he or she has something important to share -- and making that information available to everyone, including the CEO. This could be anything from not having the resources to complete a project on time to seeing a potentially disruptive move by a competitor.

Great managers solve this problem by walking around and getting the pulse of their employees. As companies grow, this becomes a logistical challenge. There simply isn't enough time to have conversations at every level of the organization.

At this point, leaders need to replace walking around with a system to solicit feedback about issues. This could be done via anonymous surveys and/or a system that regularly asks for employees' perceptions of how their work is going, tied to their quarterly objectives.

Consider asking the question, "How do you feel about your work?" This tends to elicit more qualitative input than a status report, which is often comprised of historical numbers rather than forward-looking insight.

Related: Why CEO Really Means Being Chief Communication Officer

Whatever the system is, it's critical to consistently monitor the soft side, not just the hard data, of projects. Giving every employee a way to raise a red flag to management can help solve many problems before they become a catastrophe.

Organizations can no longer afford for bureaucratic barriers to stifle their ability to pivot and grow. The combination of the CEO's big-picture view and wisdom plus employees' domain expertise and on-the-ground insight can be powerful stuff -- but only if leaders find a way to continuously solicit and use the information.

Joel Trammell

Veteran CEO; CEO, Black Box; Founder, Khorus

Joel Trammell is CEO of Black Box, which provides IT infrastructure services, and the founder of CEO software company Khorus. He is also the author of the The CEO Tightrope.

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