The 5 BIG reasons why transparency matters.
by Tomasz Grzelak - founder of DayMemo
Depending on the research, only between 14% and 30% of U.S. employees understand their company’s strategy and direction.
Those shockingly low numbers are one of the reasons why, in recent years, more and more companies choose to put transparency at the very core of their company values.
They understand that transparency gives rise to a deeper, more authentic connection between employees and the company, one that is based on knowledge and trust. As a result, more work can get done with fewer people on board, and talents get retained for longer - it's good business.
Today, transparency is less often dismissed as a soft and vague power-point buzzword. For many management teams, in an effort to boost employee engagement and alignment, it became the first order of business.
#1 - Transparency builds trust
One of the leadership gurus puts it this way:
"A team is not a group of people that work together. A team is a group of people that trust each other”.
-- Simon Sinek
For many, knowing others have their back, can become the primary motivator to venture into the uncharted territories, outside of their comfort zone, and take on more responsibility. Quite often this allows them to open up to their full potential, which gives rise to more innovation and thinking outside the box.
Transparent, honest and open communication is where trust has its roots. Fewer problems are swept under the carpet or hidden from managers altogether when people trust each other.
It's common sense, really. People work for people - so why on earth would they want to give their absolute best to someone whom they don’t trust?
Unfortunately, trust is a pretty big problem in the modern workplace. Recent research by ToleroSolutions found that "45% of people say lack of trust in leadership is the biggest issue impacting their work performance”!
What can be done about it?
One way to build trust through transparency is for the managers to open up about their own mistakes with their teams. It's maybe not the most natural thing to do for some, but it's a sign of character and confidence.
"If you’re not making mistakes, then you’re not doing anything.
I’m positive that a doer makes mistakes.“
-- coach John Wooden
I think it's fair to say that we all fail a little bit, every once in a while … to err is human! Sharing your mistakes can be a considerable trust booster for the people around you. On the other hand, if someone never admits to any wrongdoings, it can easily be read by others as lack of trust.
Ok, but where is the money?
Well, for starters, your costs associated with employee retention and onboarding will shrink. Less churn also means less unexpected delays on projects. Besides, it takes a good 1-2 years for people to get genuinely productive at their jobs. If your turnover is high, most of your employees will be running below that threshold.
Transparency is good business.
#2 - Transparency fosters honest feedback
Getting feedback is easy. Getting honest feedback is the hard part.
Most companies have already in-place some process around giving and receiving feedback. Regular one-on-ones, quarterly/yearly reviews, retrospective meetings, you name it. What is often questionable is the actual quality and honesty of such feedback.
All too often it boils down to two people sitting in a room and beating around the bush. Without openness, instead of being productive and helpful, it can quickly become a waste of time. Or worse, one can leave such a meeting with a feeling that everything is going good when it isn't.
Of course, this doesn't limit itself to 1-on-1s and reviews. The point is to promote honest and direct communication across the board. Create an environment, where constructive and critical feedback, as well as praise, is natural and encouraged.
The best part?
You'll less often find yourself in a situation where people continue to work on the wrong things because no one dares to speak up. You'll hear "no" more often, and that will prevent you from running into many dead ends.
What is essential is to follow-through on the given feedback, and share the decisions that were made. Otherwise, it's a futile process, that might bring more harm than good.
Discuss things openly and frequently - don't be a politician.
#3 - Transparency breeds engaged employees
An informed employee is a more engaged employee. In a Harvard Business Review employee engagement survey, two out of three most impactful employee engagement drivers were:
- “Senior leadership continually updates/communicates strategy”
- “Individuals have a clear understanding of how job contributes to strategy”.
Both of those reasons were pointed out by a sizeable 70% of responders. In the same survey, only 24% said that they think that employees in their organisation are highly engaged.
All this paints a pretty clear picture - it should be a leader's top priority to create an environment where understanding the big picture is a norm, not an exception. A place, where people genuinely understand what is going on around them, and how their individual contribution fits into the grand scheme of things.
An excellent and simple place to start for managers is to begin sharing short summaries of their daily work with their teams. The tricky part is not to present it as a bare-bones list of things that got done. Instead, explain how the things that got done are connected with the company goals. In other words - focus more on the "why", than on the "what". Such a change of emphasis, makes the company's objectives feel less detached from the daily work and less “virtual”. Not something that is set once a quarter or a year, and then almost forgotten until the next review, but something that everyone lives by daily.
Such a transparent and open communication can, in the long run, turn out to be more impactful than any late evening send-to-all motivational email. It's surprising to see how much can be accomplished when people work together, towards a common goal and understand how they and others contribute.
Here is the deal:
We all like to take good care of what is ours. The more people understand about their company, the more “theirs” it becomes. It is no longer someone else's company, where they happen to work. It starts to become “their” company as well. And that will make a huge difference in their engagement.
#4 - Transparency aligns
Have you noticed how often people think, that it's their team/department, that does most of the critical work, and how everyone around them has it somehow easier? That is a clear indication that people in the organisation don't fully understand the true nature of each other's work and the importance of their contribution.
It surely should be a bullet point on the top-management todo list, to get in place tools and processes that will result in decent information flow between different parts of the company - not only on the very top. This would allow the employees on all levels of the organisation, to gain a much better understanding of the daily work of people around them, as well as its value to the overall company success.
Such a setting not only fosters alignment but also creates an environment where cross-functional work happens naturally, even spontaneously. That can lead to new synergies and innovative ideas to form.
Will everyone make use of this change and take action? - no. However, some will, and there is a big chance they will make a positive contribution to the company bottom line.
#5 - Transparency can give a clear purpose
In this noisy world, where every company tries to grab a piece everyone's attention, it is essential that people know what their company really stands for. Not what it does, but why it does it. Of course, one of the main companies objectives is to make a profit, but that is not exactly what motivates most of its employees to go the extra mile.
To have a clear "why" is to be able to rally people behind your cause. It's the leader's role to provide (and repeat quite often) such a clear “why”, in context of which, others can define a deeper meaning and purpose of their work.
Let's take Volvo's vision as an example - there is a big difference between "going to work to put cars together" and "going to work to bring the number of people that die in road traffic accidents, until the year 2020, to zero".
The point is - it's not about describing a potentially dull job in an attractive way (although it does that too). It's about defining a clear, higher purpose for the company's existence, that people can identify, and connect with.
If you haven't already, make sure to watch this TED talk - How great leaders inspire action, by Simon Sinek. It's the third most watched talk in the whole history of TED-talks, so it's rather good.
Being equipped with a good understanding of the "big picture", a clear purpose, and being trusted by the leaders in the organisation, is a perfect recipe for an empowered, high-performing employee.
Transparency starts from the top
It is up to the top management to kick-start the process, and push for a transparent and open company culture. If the senior leadership doesn’t open up about company matters, it shouldn't expect too much regarding true engagement and bottom-up ownership from its employees.
In a company where the managers and leaders communicate and behave transparently, it's only a matter of time before such an open communication style catches on and starts to work bottom-up as well. It's not something that will happen overnight, but every step in this direction counts.