The dramatic plays of William Shakespeare read like case studies in leadership mistakes and organizational dysfunction. Whether it’s Macbeth and his ambition that ultimately undermines his ascension and leads to his fall from power, or Hamlet and his delayed decision-making, which ultimately results in his death, Shakespeare is a master at illustrating how the tragic flaw of leaders can impact an organization.

My favorite “Shakespearian Case Study” is the play Othello. Othello illustrates what can happen when openness and trust do not exist in an organization.

For those who are not familiar with the story, the work revolves around four central characters: Othello, a Moorish general in the Venetian army; his wife Desdemona; his lieutenant, Cassio; and his trusted ensign, Iago.

Iago is a leader in Othello’s army. He has a reputation for being honest and truthful. Iago becomes upset with Othello when Othello promotes Michael Cassio to a position that Iago believes he deserves. Iago believes that he is more qualified for the position because he (Iago) has battle experience while Cassio is simply a scholarly tactician.

In his anger, Iago uses his leadership position and reputation for honesty to begin a smear campaign against Othello and Cassio. Iago never really tells direct lies, but passes along innuendo and rumors to other team members. These rumors take on a life of their own and result in Othello becoming so paranoid and suspicious he demotes Cassio, kills Desdemona and takes his own life. In the end, Iago is taken away to face his punishment.

While not as dramatic, parallel occurrences happen in companies every day. Employees who believe that they should have been promoted are passed over, and as a result become angry at their bosses, the person that was promoted, and the entire organization. Many times this anger manifests itself with the employee engaging in smear campaigns against the aforementioned group.

In the play Othello, there is no mention of Othello explaining to Iago (who is apparently up for promotion) what went into the decision-making process. There is no mention of Iago having an open discussion with Othello about his belief that he was more qualified for the position. There is no indication that Iago asked Othello about the promotion criteria or what he could do to make himself more promotable. There is no indication that Othello ever shared this information with Iago. And finally there is no indication that Michael Cassio (after being promoted over a colleague who was in contention for the same position) ever had an open discussion about what this promotion meant for their relationship.

In short, Othello’s organization suffered from a lack of openness and trust. Individuals did not have the frank conversations that lead to an understanding of perspectives, decision-making processes, promotion criteria, or performance expectations.

Imagine how the outcome of the story might have been different if Iago had a clear understanding of what it took to be promoted, or if prior to announcing who he decided to promote, Othello explained the reasons for his decision with Iago. Consider the different tactics that Iago might have employed if he felt that he was able to openly speak with his superior or if Cassio had come to Iago to openly discuss the situation.

While Iago is just a character in a Shakespearean play that was written over four hundred years ago, he exists today in every company. He (or she) is engaging in smear campaigns and rumor spreading that is slowly killing your organization. The lower the level of openness and trust, the larger the financial impact he has. The only way to save yourself from Othello’s fate is by creating and maintaining an environment of openness and trust.