The Power of Transparency

Written by on October 28, 2015

Have you noticed that transparency is getting a lot of lip service these days? It has found its way into a lot of mission statements and corporate credos. The big question is: Are leaders being more transparent or are they just talking about it in an attempt to gain trust from their teams?

Transparency is often referred to as a “character trait” because both the commitment to it, or the lack of it… is a reflection of the character of the leader. Historically, leaders and managers have used a kind of calculated transparency to grow their own power. The decision to share or not share certain kinds of information is one of the key differentiators between leaders and coaches.

To answer this question, we need to start with the basics. What is transparency? You will probably never find another “strategy” that is simpler to explain. In a team context, transparency is just telling the truth to more people than you normally would. More staffers, more customers, more stakeholders… transparency means more truth to more people.

Transparency is aspirational. Leaders and organizations that value it will be constantly challenged with just how much transparency is actually good for their teams. We have worked with companies that deeply valued transparency as part of their corporate culture. They were overt in the discussion and debate of key strategic decisions. We have seen how this commitment to transparency has been very positive and, conversely, negative in different situations.

The following two studies are real clients of ours, and the stories are reported exactly as they happened. We have left the names of the leaders and organizations out to protect their privacy.

Case Study #1

One company in the petrochemical industry leveraged its commitment to transparency to great effect during a recent commodity-pricing crisis. The global value of their refined product had dropped so drastically that they were shutting down certain operations and initiating a staged furlough program for important workers in these locations. Their company was in the news, and the experts in their industry were not certain they would even survive the pricing crisis.

We were in the room when the CEO addressed the team at their company headquarters. He walked to the front of the room and, without any hesitation, began to address the situation at hand to the many executives in attendance. He had a calm demeanor and explained the plans for what would have to happen if the prices continued to drop. He discussed which personnel would have to be released and why and what the company was trying to do to remain solvent through the crisis. Next, he discussed how the company would ramp back up again once the pricing pressures were relieved and what that would mean for the people who had been let go. He understood what great crisis leaders all understand: the absence of information creates a vacuum, and what fills that vacuum is angst and fear. Presenting a tough truth, even when it is uncomfortable for everyone involved, is almost always better than letting people’s imaginations fill in the blanks.

Case Study #2

Let’s look at a situation where transparency did not exist. Where the leader did not think it was part of her job to make sure the team knew the situation they were in. The company was a mid-sized aerospace equipment company that had grown quickly to around fifty employees. Most of the fifty were fabricators in a large machine shop where the aluminum parts were milled and finished for shipment to their aerospace customers.

We were hired as consultants because the owner/president of the company was very concerned about the morale. She had reported that the atmosphere had become negative, and that was taking its toll on the employees and the overall productivity of the organization. Absenteeism and tardiness were way up, and none of the good-natured camaraderie that had characterized the shop previously seemed to be there anymore… or at least when she was around. Business was slow but everyone was still getting paid, she said. She had even confessed that she and her husband (also on the payroll) had each gone without pay for the previous several months because the orders had dropped so dramatically.

We scheduled a series of one-on-one meetings with the employees. It was explained that their opinions would be considered confidential, so they could share their feelings safely. When we began the interviews we quickly found exactly what the owner had reported… these people were in a nasty mood. They had nothing but negative feedback on the business, the working conditions, the owner, the owner’s husband… you name it. When we started asking for specifics we got a laundry list of slights and negative changes perpetrated by the owner. Here is the partial list:

• No more coffee service in the shop
• No more overtime pay for Saturday shifts
• No more free Friday lunches ordered in
• Two vending machines in shop have been broken for months
• Shop employees being asked to wash their own uniforms (no laundry service)
• Company was no longer sponsoring the softball team
• No holiday bonus
• And a few more general grievances

Now it was time to meet with the owner behind closed doors to review our findings. We were prepared to review the list and discuss how the accumulation of these complaints and grievances was affecting the overall morale and energy level of her business. We went through the entire list, being careful to mention when a particular complaint was mentioned more than once. We had asked the owner not to react to any individual items on the list, saying she should instead focus on the spirit of the complaints and how they may be affecting the working environment.

When we were done with the review the owner was silent for a while… and then she explained what was actually happening at her company. She said that one of her first priorities when she started the business was to provide stable employment for good people. In an industry with lots of ups and downs, she felt that being able to provide stable and consistent work would be a great way to attract and keep a great team… especially in the fabrication shop where the really skilled people worked.

She went on to say that every one of the comprises that had been made… the coffee, the lack of overtime on Saturday shafts, not repairing the vending machines, the unpaid holiday bonus, etc., were decision made to keep from having to lay anyone off. She added that she had not; in fact, laid a single person off during this entire down cycle in her business and that competitors were aggressively laying people off.

We asked why she had never shared this information with the staff? Especially when the morale had gotten so low? She said that she did not want people to worry about their jobs or the company, because that was her job.

We scheduled a meeting the next day for all of the shop workers, the office staff, and the owner. We talked through what we had learned from both sides. The meeting ended with some tears, lots of hugs, and most importantly… understanding. The bottom line was that this was a bad situation that could have been completely avoided with simple transparency. The workers had not given the owner the trust that she was working in their best interest, and the owner had not believed that the workers could grasp the business situation they were in. Both sides were wrong.

A Final Word on Transparency

In some organizations the video does not match the audio. The leaders talk about the value of transparency and their commitment to it… but the team rarely sees it. This kind of false transparency does not engender trust or appreciation. Rather, the product of this lip-service kind of transparency is cynicism and distrust.

Developed leaders and coaches understand that it is better to err on the side of too much transparency, rather than too little. When you offer too little transparency into decisions and direction, you are risking your credibility. When a leader seems to be offering too much transparency, they open themselves to some criticism, but their credibility is not at risk.

Remember, transparency is just telling the truth to more people than you normally would. More staffers, more customers, more stakeholders… transparency means more truth to more people. It is a decision you are making about your organization’s character. Making a habit of demonstrating real transparency in your role will make you a better leader and create more loyalty from your team.

  1. Sonia Horanzy   On   October 29, 2015 at 9:06 am

    Great Article Tracy. So glad you’re still filling people up with positive light. Always have and certainly always will. That inner light is what distinguishes you as a positive, impactful and empowering person. Go out and prosper and continue to help your teams prosper as well.

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