Transparency in Organizations: How Transparent Should You Be as a Leader

Transparency in organizations is becoming more popular these days and there’s no surprise why. Modern-day employees don’t just clock-in to work and get their paychecks. They want to be part of a company they trust and can rally behind. We all know that transparency builds trust and when employees trust their leaders and the organization, you can expect higher engagement and better performance from them. But transparent management doesn’t just mean telling everything and anything to everyone.

It’s a value that’s embedded in the organization’s culture and directs how leaders manage their teams. Not every leader is comfortable with being transparent. It can be daunting to let everyone know what you know. But when information is openly shared and provided with the right context, employees can contribute better ideas for the success of the organization.

What is Transparent Management?

Transparent management is a management style that focuses on open governance. It means not withholding valuable information from employees, whether they are negative or positive. It also means implementing processes that help information become easily accessible and shared.

Keeping your employees in the loop shows you trust them and that you want them to be involved in the growth of the company. This also enables them to better appreciate their roles and they see the bigger picture of how their actions and efforts contribute to the company’s success. This increases morale, encourages innovation and creativity, and results in higher levels of engagement.

The Importance of Accountability and Transparency in Business Organization

If you’re not convinced that transparency in organizations results in higher success rates, here are 4 more reasons that highlight its importance.

Transparency Builds Better Relationships

An American Psychological Association (APA) survey showed that 25% of employees don’t trust their employer and only about half believe their employers are open and upfront with them. Better employer-employee relationships are founded on trust, and that’s what transparency highlights.

When employees trust their leaders, they will rally behind their causes and goals. When employers trust their employees, they empower them to act and make decisions in the best interest of the company. They own up to their actions. This also results in lower turnover rates and higher employee engagement.

Transparency Enhances Responsiveness and Agility

With valuable information being readily available, employees and the organization as a whole can make informed decisions much faster. This can significantly reduce unnecessary risks that could have been met with closed systems and ways of working. Making information readily accessible cuts the extra think time and pushes your team to get things done faster.

Transparency Enhances Collaboration

Nowadays, work is no longer siloed and static. Collaboration between teams, departments, and even external partners are to be expected. Transparency in organizations enables sharing and collaboration between employees. Information and documents are easily discoverable. It’s easy to know who to reach out to for specific concerns and resolve them.

Transparency Increases Productivity and Innovation

A 2013 Harvard Business Review survey revealed that 71% of those surveyed believe employee engagement contributes to overall organizational success. Also, 70% of them said that one of the important drivers of employee engagement is continuous updates from Senior management.

When you share valuable company information with employees, they become more empowered to make business decisions. This heightens their accountability and pushes them to put their best foot forward. This also enables them to come up with new ideas and experiment on them. If you want the best and most creative ideas from your employees, you have to show you trust them enough to bring those out.

Practicing Transparency in Your Organization

By now you might be thinking, “Transparency is great, but does that I mean I need to tell everything to my employees now?” It’s important to recognize that transparency can have varying degrees across organizations. Perhaps what’s important is that you have a consistent guideline on what you’re transparent about in your company.

While being transparent has undeniable benefits, going 100% open could be a waste of you and your employees’ time, or worse, a cause for confusion, panic, or worry. You need to discern whether disclosing a piece of information will be helpful for employees to perform their jobs better or not. If it’s going to distract or overburden them, then it might be best to skip the talk.

But being transparent doesn’t mean you only focus on sharing positive news. When sharing negative feedback or results, what’s important is to provide context. This is perhaps the most important aspect of transparency and what most leaders forget to communicate. Any information shared should be backed with the necessary context so employees can better understand what it means to them and the company as a whole. Providing context can prevent negative reactions or over-speculation from employees.

Transparency in organizations is without a doubt a positive driving force for business success and longevity. As you practice transparency in your organization, you retain your best talent, encourage them to innovate and empower them to take your business to greater heights. Employees are the backbone of any company. And with engaged employees, you can expect better products and services for your customers.