Candor in business -- or in any kind of organization -- is a rare and wondrous thing. Rare because, as we have discovered during our travels over the past seven years, so few companies have it. Wondrous because when they do, everything just operates faster and better.Now, we're not suggesting there is epidemic of malevolent dishonesty out there in the business world.

Rather, we're observing that too many people – too often -- instinctively don’t express themselves with frankness. They don’t communicate straightforwardly, or put forth ideas looking to get real debate. They just don’t open up. Instead they withhold comments or criticism. They keep their mouths shut in order to make people “feel better,” or avoid conflict, and they sugarcoat bad news in order to maintain appearances. They keep things to themselves, hoarding information. That’s all lack of candor, and it’s absolutely damaging.And yet, lack of candor permeates almost every aspect of business.

We've heard stories from people at hundreds of different companies who describe the complete lack of candor they experience day-to-day, in every type of meeting, from budget and product reviews to strategy sessions. People talk about the bureaucracy, layers, politicking, and false politeness that lack of candor spawns. They ask how they get their companies to be places where people put their views on the table, talk about the world realistically, and debate ideas from every angle. Most often, we hear that lack of candor is missing from performance appraisals.

In fact, we hear about that so often that we always end up asking audiences for a show of hands to the question: “How many of you have received an honest, straight-between-the-eyes feedback session in the last year, where you came out of it knowing exactly what you have to do to improve and where you stand in the organization?”On a good day, 20 percent of the hands go up. Most of the time, it is closer to 10 percent.Interestingly enough, when we turn the question around and ask the audience how often they’ve given an honest, candid appraisal to their people, the numbers don’t improve much.

Forget outside competition when your own worst enemy is the way you communicate with each other internally!

Let’s look at how candor leads to winning. There are three main ways.First and foremost, candor gets more people in the conversation, and when you get more people in the conversation, to state to obvious, you get idea-rich, meaning, many more ideas get surfaced, discussed, pulled apart, and improved.

Instead of everyone shutting down, everyone opens up and learns. Any organization – or unit or team -- that brings more people and their MINDS into the conversation has got an immediate advantage. Second, candor generates speed. When ideas are in everyone’s face, they can be debated rapidly, expanded and enhanced, and acted upon.

That approach – surface, debate, improve, decide -- isn’t just an advantage, it’s a necessity in a global marketplace. You can be sure that any upstart five-person enterprise down the street or in Shanghai or in Bangalore can move faster than you to begin with. Candor is one way to keep up.Third, candor cuts costs – lots – although you’ll never be able to put a precise number on it.

Just think of how it eliminates meaningless meetings and B.S. reports that confirm what everyone already knows. Think of how candor replaces fancy Power Point slides and mind-numbing presentations and boring off-site conclaves with real conversations, whether they’re about company strategy, a new product introduction, or someone’s performance.Put all of its benefits and efficiencies together and you realize you just can’t afford not to have candor.

Given the advantages of candor, you have to wonder, why don’t we have more of it?Well, the problem starts young. The facts are, we are socialized from childhood to soften bad news or to make nice about awkward subjects. That is true in every culture and in every country and in every social class. It doesn’t make any difference if you are in Iceland or Portugal, you don’t insult your mother’s cooking or call your best friend fat or tell an elderly aunt that you hated her wedding gift.

You just don’t.Why? Well, when you try to understand candor, you are really trying to understand human nature. For hundreds of years, psychologists and social scientists have studied why people don’t say what they mean, and philosophers have been reflecting on the same subject for literally thousands of years. A good friend of ours, Nancy Bauer, is a professor of philosophy at Tufts University. When we ask her about candor, she says that most philosophers have come to the same conclusions on this topic as most of us laypeople do with age and experience.

Eventually, you come to realize that people don’t speak their minds because it’s simply easier not to. When you tell it like it is, you can so easily create a mess –- anger, pain, confusion, sadness, resentment. To make matters worse, you then feel compelled to clean that mess up, which can be awful and awkward and time-consuming.

That’s why, Nancy says, philosophers like Aristotle and Emmanuel Kant believe that lack of candor has nothing to do with preventing sadness or pain in anotherperson, or with being kind or decent. In fact and in practice, it is all about self-interest – making your own life easier.Kant had another point, too.

He said that people lack candor because when you speak your mind and the news isn’t good, you stand a strong chance of becoming unpopular. Most human beings, Kant said, will do almost anything to escape that fate. The irony, he said, is that in avoiding candor in order to be liked, people actually destroy trust, and in doing so, ultimately erode a good society. The same could be said about eroding good businesses.

Now for the really bad news. Even though candor is vital to winning, it is hard and time-consuming to instill in any group, no matter what size. Hard because you are fighting human nature and entrenched organizational behaviors, and time-consuming, as in years and years. At GE, it took us close to a decade to really feel it, and it was by no means complete after twenty. Still it can be done.

There is nothing scientific about the process. To get candor, you reward it, praise it, and talk about it. You make public heroes out of people who demonstrate it. Most of all, you yourself demonstrate it in an exuberant and even exaggerated way – even when you’re not the boss.Imagine yourself for a second at a meeting where the subject is growth and how to get it at an old-line division.

Everyone is sitting around the table, civilly talking about how hard it is to win in this particular market or industry. They discuss the tough competition. They surface the same old reasons why they can’t grow and why they are actually doing well in this environment. In fact, by the time the meeting ends, they’ve managed to pat themselves on the back for the “success” they’ve enjoyed “under the circumstances.”

Inside your head, you’re about ready to burst, as you tell yourself, “Here we go again. I know Bob and Mary across the room feel the same way I do – the complacency around here is killing us.” Outside, all three of you are playing the game. You’re nodding. Now imagine an environment where you take responsibility for candor.

You, Bob, or Mary would ask questions like:“Isn’t there a new product or service idea in this business somewhere that we just haven’t thought of yet?” “Can we jumpstart this business with an acquisition?”“This business is taking up so many resources. Why don’t we get the hell out of it?” What a different meeting! What a lot more fun, and how much better for everyone.Another situation that happens all the time is a high-growth business with a self-satisfied crowd managing it. You know the scene at the long-range planning meeting.

The managers show up with double-digit growth – say 15 percent – and pound out slide after slide showing how well they are doing. Top management nods their approval, but you’re sitting there knowing there’s a lot more juice in that business. To compound matters, the people presenting the slides are peers of yours, and there’s that age-old code hanging in the air -- if you don’t challenge mine, I won’t challenge yours.

Frankly, the only way I know of to get out of this bind – and introduce candor -- is to poke around in a non-threatening way. “Jeez, you’re good. What a terrific job. This is the best business we’ve got. Why not put more resources into it and go for more?” “With the great team you’ve put in place, there must be ten acquisitions out there for you. Have you looked globally?”Those questions, and others like them, have the power to change the meeting from a self-congratulatory parade to a stimulating working session.

► TRUTH AND CONSEQUENCES

Now, you may be thinking, I can’t raise those questions because I don’t want to look like a jerk. I want to be a team player. It is true that candid comments definitely freak people out at first. In fact, the more polite or bureaucratic or formal your organization, the more your candor will scare and upset people, and yes, it could kill you.

That’s a risk, and only you can decide if you are willing to take it. Of course you’ll have an easier time of installing candor in your organization it if you are closer to the top. But don’t blame your boss or the CEO if your company lacks candor – open dialogue can start anywhere.

Look, we’ve talked a lot in this section about one word. But it’s really very simple – candor works because candor unclutters. Yes, yes, everyone agrees that candor is against human nature. So is waking up at 5 am for the 6:10 am train every day. So is eating lunch at your desk so you won’t miss an important meeting at 1.

But for the sake of your team or your organization, you do a lot of things that aren’t easy. The good thing about candor is that it’s an “unnatural act” that is more than worth it. It is impossible to imagine a world where everyone goes around saying what they really think all the time. And you probably wouldn’t want it anyway – too much information! But even if we get halfway there, lack of candor wouldn’t be the biggest dirty little secret in business anymore.It would be its biggest change for the better