Meaning
Verification process where a founder checks the work or the decisions of a successor through informal channels rather than official reports. Out-of-band validation involves talking to low-level employees or clients to see if the new leader is telling the truth about the company’s health. This practice stops when the founder trusts the formal reporting systems enough to rely on them entirely.
Verification Method
Method used for this validation is often subtle and can damage the successor’s authority. If employees realize the founder is checking up on the new boss, they will be less likely to respect the new boss. This creates a culture of surveillance.
It also suggests that the formal governance of the company is failing.
Information Integrity
Integrity of the information gathered this way is often poor. Employees may tell the founder what they think the founder wants to hear. This leads to a distorted view of the business.
The founder might act on bad data and cause unnecessary conflict.
Trust Building
Building trust requires the founder to stop these informal checks and rely on the board and the official audits. This is a difficult shift for many founders who built the business from nothing. However, it is the only way to create a professional management environment.
