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Open Communications Is More Profitable Then Keeping Secrets

By: Steve Johnson

5/31/2009 - 33 Comments

Keeping secrets can sometimes seem like the right think to do to protect a secret that looks to be more damaging then sharing it.

Most of the time, information is not shared with everyone out of fear of what may happen if the information is known by other people. But a lot of times keeping secrets can be even more damaging.

Sharing Information Increases Profits

Publically traded companies must legally share financial information in order to protect their share holders and pay their taxes.  But, almost all companies (public or private) share much of their financial decisions with their employees because they have found tremendous value is motivating employees through transparency.

Informed employees are much more motivated to work for a company that they believe they can trust and sharing information is one of the best ways to build trust between two parties. That increased motivation results in an increase in efficiency and eventually in profitability. 

In the same way, family communications is essential for building a strong marriage.  A strong marriage is built on intimacy and intimacy is built on openness.  Sharing information without holding back builds trust and intimacy.  Two people working together in a trusted relationship have the advantage of making better financial planning decisions then one, leading to a more financial success. Open communications can also help reduce the chance of a divorce, which is a very expensive process.

Hiding Information Reduces Profits

Hiding inflation from employees results in the exact opposite. Sometime it may seem beneficial to kept information away from employees in the short run, but in the long run is it almost always more damaging.  Employees remember things for a long time.  When employees find out that their company lied or mislead them, they loose trust and begin thinking of ways to move to a different company that they can trust.

Uninformed employees are also less motivated to work hard for a company that they believe is keeping secrets from them.  The number one reason that people work for a company is for security.  If they do not feel that their jobs are secure, they loose faith in the company and begin thinking that the company they work for will not be their long term employer.  Productivity and profits begin to shrink when employees cannot trust the company they work for.

Even governments realize the negative effect of hiding information.  One of President Obama’s campaign platforms was that he was going to increase the transparency of the Federal Government.

In the same way, keeping secrets in marriage is just about the worse thing to do.  Without open communications on a regular basis, it becomes very difficult to trust each other.  Without intimate and open communicate about life goals, how can two people make financial planning decisions based on common goals?  They cannot.  Therefore, secrets lead to separate goals with separate financial planning strategies that usually conflict with each other.  It’s not hard to predict the end result, less financial success. 

When to Keep a Secret

There is a time to hold back private or intimate information to protect someone or to protect a company.  For example company trade secrets and patent rights are protected by law.  Also, many time sales contracts are kept private to protect a company from its competitors.

Communication is one of the most powerful forces in human civilization and I’m not about to pretend that it’s always easy to know when to keep information secret and when to share it or who to share it with.  Governments all of the world spend billions on agencies like the CIA to gather information about other countries who try to keep information secret.

Knowing how to share information is one of the most dominating characteristics of leadership. Whether you are leading your family or leading your business, investing in your communication skills is perhaps the best way to increase your personal finances.

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