Golden Business Ideas

Put an End to Surprises

This is a memo to the boss:


Isn’t that the last thing you want to hear—especially if it’s bad news?

Yet, as you probably know, most bad news surprises aren’t surprises at all—except to you. They are problems that have been building, step by inevitable step, strategically camouflaged by one or more middle managers. And only after they’ve degenerated to the disaster stage, so they can no longer be covered up, do they suddenly explode at your desk.

How do you put an end to surprises? The obvious answer is feedback—continual and accurate feedback. But, as you also know only too well, some subordinates often try to hide bad news in the misguided hope that in time the problem will simply go away. And what’s behind such cover-ups? In one word, fear—fear that you will come down hard on the responsible subordinate. Hard as it is to hear, that fear is usually justified; the subordinate doesn’t trust the boss to be understanding. Understanding does not mean simply being forgiving; it means helping to work out a solution—not sitting in judgment. So, clearly, it takes a climate of trust for fast and honest feedback.

If you suspect that cover-ups are common in your organization, it’s time to do some soul-searching. Begin by asking this question: Isn’t it to my advantage to build a trusting climate if in return my subordinates are more likely to provide fast and accurate feedback?

A good way to start building trust is to shift the emphasis in your organization away from management-by-memo—a style that too often nurtures obfuscation because fearful managers quickly learn to color the truth with craftily written reports that camouflage bad news.

The alternative is management-by-dialogue. Dialogue is not giving orders; it’s sharing information, ideas, possible solutions to problems. Instead of saying “I want a 10% sales increase!” or “I want that job done by next month!” the boss says, “What can we do to boost sales 10%?” or “How can we get that job done by next month?” And that’s where the dialogue begins.

But that’s not enough. You should start considering face-to-face meetings—both scheduled and formal and impromptu and casual. For example, in addition to meeting one-on-one with your managers, visit the company cafeteria occasionally and walk around the facility—looking, observing, but most important, talking and asking questions of everybody—from line managers to forklift operators.

What should you talk about? Ask staff about their work. “Is there any way we can improve the process? What problems are not being addressed? Is there anything you need to do a better job?” Note the wording of the questions: The boss assumes problems and concerns exist and need to be addressed; he or she is not looking for a rosy report, but for real suggestions and answers.

Once the boss creates a climate of trust with face-to-face meetings, middle managers are sure to follow the lead. The change in climate won’t happen fast. But it will happen.

Put a Lid on Legal Fees

Some ways to hold down lawyers’ fees:

Make it clear to your lawyer from the outset that you wish to contain costs and ask what you can do to help achieve that goal.

When your lawyer is working on a large case for you, consider supplying one of your lower-salary employees to run errands that would otherwise be charged at the attorney’s hourly fee.

Negotiate how hourly rates are billed—by 30-minute, 15-minute or 5-minute intervals. Why pay a full 30-minute fee for a 5-minute phone call?

An Invitation

The JofA publishes a monthly collection of Golden Business Ideas and invites readers to contribute their favorites (for attribution, if you like).

Send your ideas to Senior Editor Stanley Zarowin via either e-mail ( ) or regular mail at the Journal of Accountancy, Harborside Financial Center, 201 Plaza Three, Jersey City, NJ 07311-3881.


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