Transparency in Management
The idea of transparency has always intrigued me. I have played the roles of direct report and manager in the Fortune 100, SMB, and startup worlds at various points throughout my career and along the way have experienced many degrees of transparency or the lack thereof. There have been times in my career as a direct report employee when I have experienced frustration with managers not trusting me or my team members with valuable information. This has been a perception, of course; at times well founded and at times an easy focus for negative energy. I have also played the role of the manager and made decisions regarding what information to communicate to the team and what information to withhold. These decisions have been both correct and incorrect with appropriate degrees of impact depending on their severity.
My goal in writing this blog post is to provide a high level understanding of what transparency means to me and how it can positively impact an organization.
What is "Transparency"
There are many ways that you can define transparency and how it relates to leadership in business. So many that I've decided to go with a couple of snippets from Wikipedia to narrow it down. While not necessarily the definitive source of all truth in the world, Wikipedia provides a reasonable description with documented sources:
Radical transparency is a management method where nearly all decision making is carried out publicly. All draft documents, all arguments for and against a proposal, all final decisions, and the decision making process itself are made public and remain publicly archived. Two examples of organizations utilizing this style are the GNU/Linux community and Indymedia.
Corporate transparency, a form of radical transparency, is the concept of removing all barriers to —and the facilitating of— free and easy public access to corporate information and the laws, rules, social connivance and processes that facilitate and protect those individuals and corporations that freely join, develop, and improve the process.
These definitions get us moving in the right direction but miss some of the visceral components that really connect someone who is seeking transparency to the action of being transparent. Here is my stab at a definition that acknowledges some of the cerebral components while attempting to speak to the emotional self as well:
Transparency in business is the practice of building a team of coworkers, employees, and leaders that exercise a high degree of trust when communicating with one another. This trust facilitates open dialogue around business practices, goals, successes, and failures. Team members are able to collaborate easily, produce quality output, and focus on the well defined (or the act of defining them if they do not exist) core areas of the business.
I like this definition as it speaks to how it feels to participate in a transparent culture. I really mean feel. For transparency to work you have to feel good about your team members. You have to feel like they have your best interests at heart. The best way I have heard this phrased is by one of my past leaders. He called it "the first assumption" and it went something like this:
Start every interaction assuming that the people you engage with are doing everything in their power to help you succeed.
Imagine that. Imagine a business environment where you truly feel as if everyone has your back. An environment where you feel empowered to do your work and informed enough to do it well. The operative concept here is trust. No business will be able to operate under principles remotely related to transparency with any degree of success if trust is not a fundamental component of the model. Trust across all levels of the organization. This concept does not work if the leaders trust each other but that trust does not scale to the other levels within the organization; flat, pyramid, inverted pyramid, or whatever the structure may be.
Now, you cannot simply say "we are transparent" without putting in the due diligence of understanding what that means for your organization and how team members will engage with each other. Transparency with any amount of commitment does not mean selectively releasing information, pointing to it and saying "See! We are transparent!". Each organization needs to have a candid conversation with itself to understand the best way to implement transparent principles. After these conversations (which will likely be numerous and lengthy) there will be even more work aligning all members of the organization around the identified principles and the concept of trust.
How company information is shared, whether it lives in the public domain, and how it is released are topics better addressed in a conversation around a company's operational model.
Why should anyone care?
The old axiom of "If it ain't broke, don't fix it" can certainly surface when considering an organization built around transparency and trust. Navigating the open waters of this course takes dedication and hard work. Here is a short list of potential benefits of working with your team members to promote a more open, honest, and communication centric business:
You Don't Always Have the Answer
In many cases the best answer to a difficult problem/question/situation rests in the mind of a team member or in a collaborative effort involving several team members. In their 2012 book Abundance, Peter H. Diamandis and Steven Kotler outline an effort by Rob McEwen to more accurately pinpoint the location of precious metals in his mining operations. After failing with hired resources he outsourced the effort to the world with great success. The story here is that just because you have all the data doesn't mean you can draw the right conclusion or make the best decision.
Team members who trust each other and their leaders focus more on output and less on politics. There is a tangible return when your team is running like a well-oiled machine. People are moving in harmony with one another. Decisions are carefully evaluated, appropriately communicated, and trusted to be as effective as possible. Less time spent politicking equals more time spent producing.
Increased Employee Satisfaction
Members of an organization are much more engaged in their workplace when they have line of sight to decisions and how they are made. This is even more true if they have the opportunity to impact these decisions. Satisfaction equals greater employee retention which certainly helps with the previous point about profitability. Alternatively, transparency gives people who are not a great fit for the organization the opportunity to realize this more quickly thus empowering them to make a career choice in an active manner rather than be the subject of performance management.
Engaged team members are people who feel ownership of the business and work hard to positively impact the future. They break out of silos and work collaboratively across the organization to achieve success.
Is this a "thing" out there?
You can do your own Googling for businesses that market themselves as "transparent" in one or more areas of their organization. An article on forbes.com titled 10 Leaders Who Aren't Afraid To Be Transparent outlines different approaches used by several executives to communicate openly and honestly about everything from internal strategy to financial performance. So yes, it is a thing in the world. The real question is how do you make it your thing?
There are companies that espouse a belief in sharing all information about the business operations. Everything. Financials, HR issues, you name it. While I admire the principle behind this operational model I have two problems with it:
- Chances are high that not ALL information is shared. There are likely some decisions that do not come to the surface either intentionally or unintentionally.
- Many times these companies do not share context around this information. This can lead to erroneous assumptions and interpretations of said information. For example, showing the Q1 financials may indicate a projected loss after a rough previous year. Without the context of some massive dollars that are coming in from sales in Q2, a person could adopt a bleak outlook for the company's longevity. There is an equal and opposite risk in the positive direction as well.
To be clear, I do not believe these issues should stand in the way of building a culture of transparency. They should help guide and inform the effort. If you focus first on building trust, your team members will forgive and understand both of these issues and any other potential missteps you may experience. They will be instead committed to the intent of transparency and will work hard to support that ideal.
Transparency in business, in my opinion, is something to which an organization should absolutely aspire. There is no formula to get there but there are many ways to start the journey. Check out the business books section of your local bookstore or Amazon. Identify your company's mission, vision, and values. Get clear on your goals and plan for the future. Identify your clients/customers in detail. Make sure you have the right people in your organization (including yourself!) to get the job done. Need a place to start? Check out Traction by Gino Wickman. This book can help you get some of the fundamentals taken care of before you start the hard work of building a culture of trust and transparency.