Does your leadership team use SG&A Code? SG&A Code is when you use “SG&A” to cover up for issues that you, or you and the leadership team, don’t want to voice out loud. Say you have too much labor expense. You plan to cut labor costs, but rather than announce this you say, “We’re going to cut SG&A by 10%.”
Very few people like to be the bearers of bad news. Maybe you hope to cut something else, other than labor, by the time it comes to act. But is using SG&A Code ethical or advisable? No. Get the bad news out. The sooner you do, the less likely the bad news will leak out and the more likely you will be able to develop and execute an action plan.
Leaders should think of themselves as Chief Conversation Officers. They must speak the unspeakable and ask the questions that others are afraid to ask. If leaders speak in code then their coworkers won’t be inclined to speak straight with them.