The Case for Transparency: Keep No Secrets from Employees

The economy may be improving—inching upward degree by painful degree—but employee moods aren’t following the trend. Perhaps you’ve noticed that people seem anxious and distracted, either hiding out in their offices or aggressively vying for credit in an attempt to shore up their positions in the organization. They’re wondering, Are layoffs imminent? Will I have a job next week? In fact, will the company even survive the year?
Like most managers, you have a pretty clear picture of the state of your industry, the context you operate in (aka the external environment), and the financial health of your company. And you’ve likely wondered: How much should I tell my workers about what’s really going on behind the scenes?
The answer is simple: The more disclosure the better. And there really shouldn’t be a “behind the scenes.”
Leaders have talked about transparency for a long time, but it’s never been more important than now. We share information with employees for a couple of reasons: One, it’s the right thing to do; two, it’s good for business. If your company doesn’t have a culture of openness and free-flowing information, now is the time to move in that direction. Here are some reasons why you should embrace transparency:

  • People assume the worst when they don’t hear from leaders. Silence from management causes fear and resentment, which doesn’t contribute to a productive culture. Maybe the news is bad. Maybe it’s not as bad as the employees are imagining. Even if it is, once they know the truth, they can plan and act accordingly.
  • Transparency helps workers connect to the “why.” When employees are working in a vacuum, they can’t see the financial big picture. Decisions leaders make may seem ill-advised or unfair or simply inexplicable. Transparency connects them to understanding and propels them to act accordingly. You can ask people to change their work habits and established processes all day long. If they don’t know why they’re being asked to change, they won’t.
  • Employees may not understand how the external environment affects the company. Senior leaders are aware of new laws affecting their industry, innovations reshaping the marketplace, financial pressures facing their customers, and so forth. It’s their job to know. Mid-level managers don’t necessarily see the same picture—and frontline employees almost certainly don’t. Creating a transparent company helps everyone stay mindful of the forces affecting the bottom line. Those forces have never been more volatile.
  • Transparency heals we/they divisiveness. I often warn clients about the we/they phenomenon—the perception that there are separate groups inside a company that work at cross-purposes. It might manifest itself as staff vs. management, or this branch vs. that branch, or corporate vs. everyone else. In transparent organizations that share common agendas, it’s hard for we/they to flourish.
  • Transparency keeps good people from leaving. High performers don’t thrive in an atmosphere of secrecy and uncertainty. They want to work for a company that treats them with respect and values their problem-solving skills. Hold critical information too close to the vest and high performers may assume the company isn’t healthy. Because they often have options in even the worst economy, they may leave for greener pastures.

One more thing: Don’t think of transparency as a “crisis control” program. It’s a long-term commitment. When the good times roll around again, the strategy will serve you just as well.

Transparency is a way of life, not a stop-gap measure. It shapes your organizational culture and drives results in any economic environment. As recovery gets under way, as long as you maintain your commitment to openness and constant communication, your organization will only get stronger.
—Quint Studer is the author of Straight A Leadership: Alignment, Action, Accountability (Fire Starter Publishing, 2009). He was named one of the “Top 100 Most Powerful People in Healthcare” by Modern Healthcare magazine for his work on institutional healthcare improvement. Studer was named “Master of Business” by Inc. magazine. Contact him at the Studer Group website.

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