Whether or not you liked her humor, Joan Rivers was a force of nature, perhaps best known for her catchphrase, “Can we talk?”

She said she was given the line by another comedian, Rodney Dangerfield, and she ran with it. While she reportedly was in good health, her death came during what was deemed a routine throat procedure at a clinic on the upper east side of Manhattan. We could discuss the risks associated with the procedure, but here we focus on the broader role of communication in business in general, and risk management in particular, that could be summed up by River’s memorable line.

To me, “Can we talk?” calls for a truly open, forthright, and timely conversation. It means there’s something important that you or I need to know, whether you like it or not, and it’s going to be a frank, no-holds-barred, heart-to-heart exchange.

It’s obvious to most successful executives that effective communication is essential to making good business decisions, but unfortunately the reality is that too often critical information is communicated late, or not at all. Every business manager has experienced communication breakdowns, sometimes with major negative consequences.

Knowledge Hiding

The COSO Enterprise Risk Management—Integrated Framework highlights the critical relevance of communication and how it needs to work in a business organization. For an enterprise risk management system to be effective, pertinent information must be identified, captured, and communicated in a form and timeframe that enable people to carry out their responsibilities. Such systems use data generated internally as well as from external sources, providing information for managing risks and making informed decisions relative to objectives. Effective communication ensures information flows down, across, and up the organization.

Experience shows, however, that communication channels often become too slow, bogged down, or closed off entirely. The business landscape is littered with failed companies where senior executives didn’t have the information needed to avoid disaster, or to otherwise seize critical business opportunities. No one came forward and said, “Can we talk?”

According to a recent New York Times article, research by two Canadian academics shows “knowledge hiding” is common in the workplace for a variety of reasons. The deliberate withholding or concealment of knowledge stems from any number of motivations, including the notion that knowledge is power and sharing it dilutes that power. Since evaluations and rewards are focused on individuals at most companies, rather than the teams, some employees may have insufficient motivation for sharing what they know.

Certainly we’ve all encountered situations where important information is withheld, with negative consequences to the organization. In some instances employees fear being the target of “shooting the messenger,” while in others senior managers are simply unwilling to listen.

Information Flows at GM

A few months ago, in a column titled, An Open Letter to GM CEO Mary Barra, I referred to the ignition switch debacle and a tale of breakdowns in communication at GM, where senior officials reportedly didn’t listen, turned a blind eye to critical information, and sought to protect the company and executives from criticism. I marveled at the CEO’s statements that company executives usually were isolated from debates regarding recalls—for the stated purpose of not influencing outcomes.

If for some reason the systems in place don’t seem to be working, an employee with important information can, and must, pick up the phone or walk into the relevant manager’s office and say: “Can we talk?”

Such “isolation” makes absolutely no sense, because decision making about a recall is so important to the company—from the standpoint not only of cost, but of customer safety and the company’s reputation—that the most senior executives, including the CEO, with board of director oversight, must be involved in making the final determinations. I also wondered about the general counsel, Michael Millikin, and why he wasn’t informed by lawyers in his department about the ignition-switch issue. Sure, he’s a busy guy, but I couldn’t help but wonder whether there was an insulation barrier purposefully erected.

Now we see the new headline, “In Surprise, Top Lawyer at GM Sets Retirement.” Well, perhaps someone was surprised that Michael Millikin is to retire, but certainly not myself or my colleagues. The company gave no reason for the announced retirement, and a GM spokesman said it was voluntary and not related to the faulty ignition switches. Yes, the internal investigation reportedly exonerated Millikin in the delayed recall, and the spokesperson said of the retirement, “Clearly it was voluntary because he is staying on to help with the transition and help with the search for a new general counsel, [which] wouldn’t happen if it wasn’t voluntary.”  

Hmmm, wait a moment as we review. At least five lawyers who worked for Millikin reportedly were fired for their role in the ignition switch fiasco, and Millikin somehow—inadvertently or otherwise—wasn’t informed of the legal cases related to the faulty switches and related deaths and injuries that have so badly damaged the company and its reputation. Are we really expected to accept the notion that the retirement had nothing to do with all this?” And whether, and why, not one the lawyers asked Millikin, “Can we talk?”

It’s reasonably clear that what we have here is abject failure in communication. And it’s not rocket science. The COSO ERM framework states what is needed that would be considered obvious to any seasoned executive:

Every enterprise identifies and captures a wide range of information relating to external as well as internal events and activities, relevant to managing the entity. This information is delivered to personnel in a form and timeframe enabling them to carry out their enterprise risk management and other responsibilities.

Front-line employees who deal with critical operating issues every day are often in the best position to recognize problems as they arise, and communications channels should ensure personnel can communicate risk-based information across business units, processes, or functional silos, as well as upstream.

Communication breakdowns can occur when individuals or units are discouraged from providing information important to others or do not have a vehicle to provide it. Personnel may be aware of significant risks, but unwilling or unable to report them. For such information to be reported there must be open channels of communication and a clear-cut willingness to listen. Personnel must believe their superiors truly want to know about problems and will deal with them effectively.

The COSO framework makes clear that while normal reporting lines usually work, there needs to be alternative channels in place for use in the event the normal lines are ineffective.

Certainly information systems must be in place in every organization to ensure critical information is communicated on a timely basis to those who need to know. Managers need to ensure those channels are open and free-flowing. And if for some reason the systems in place don’t seem to be working, an employee with important information can, and must, pick up the phone or walk into the relevant manager’s office and say: “Can we talk?” And the only acceptable answer to that question is a clear, resounding “Yes.”