Passive honesty acknowledges only that which has already come to light.
Passive honesty has been, for a long time, the highest standard of honesty to which businesses were held. Passive honesty is also the lowest threshold to still qualify as honesty. Below passive honesty is dishonesty: failing to acknowledge that which has been revealed, downplaying it or even actively concealing it for purposes of self preservation. Sure, public companies are required by law to report some very detailed information, but as we’ve seen all to often, numbers can lie. On the other hand, private companies hold the right to conceal or reveal as much information about themselves as they like to whomever they like — just like private individuals — and still get points for passive honesty.
Passive honesty lives in a brick house. Passive honesty has plenty of rugs in each room under which the dust can be swept. It keeps closets and corners where cobwebs collect. It has a few windows just to keep up appearances, but passive honesty carefully selects the prettiest information to volunteer to the outside world and keeps the rest hidden away.
Active honesty seeks out what is hidden for the purpose of making it known.
Active honesty lives in a glass house. Active honesty owns no rugs under which the ugly stuff can be swept. Active honesty holds itself accountable by maintaining no place to hide.
But, why in the world would a company choose to reveal more information than absolutely necessary? Even more, why would a company dedicate valuable resources of time and effort to seek out that information for its stakeholders?
Businesses are people. They’re comprised of people to serve people and employ people. They succeed or fail based on the needs and perceptions of people. As a result, desirable businesses behave like desirable people. They possess the characteristics of desirable people and govern themselves according to desirable values.
If you’re blessed to have a marriage or friendship in which active honesty is practiced, you understand just how deeply valuable a relationship can be. Trust is not built on the illusion of perfection but on honesty about imperfection; revealing strengths and weaknesses side by side for the purpose of full disclosure. The illusion of perfection is very fragile and taxing to maintain. Passive honesty defends the illusion at any cost, propagating thin, cheap, flimsy value. It benefits only the non-disclosing party and only until the illusion is broken.
Active honesty bears thick, enduring, long-term value, planted on a firm foundation of reality instead of illusion.
It can be done.
A young, privately held email marketing company recently hosted its user conference. At that conference, the company’s owners divulged its financial performance for the previous year to a roomful of clients and partners — including the portion of profits that were taken as return for the owners and the amounts that were reinvested in the business.
When’s the last time you saw that from a private company? When’s the last time your stakeholders had such a good reason to trust you?
In a world of instant digital connectivity, transparency is no longer optional. I contend that companies who practice active honesty (along with individuals, governments and organizations of every kind) will win the trust required to survive in the 21st century.