October 11, 2017

How Much Transparency is Too Much?

We live in a world where sharing, even with total strangers, has become commonplace. We post selfies taken in odd and inappropriate places on Instagram, upload videos of our kids’ latest recitals for our “friends” to see on Facebook, and share beliefs with potentially polarizing opinions in ALL CAPS on  Twitter - regardless of the privacy setting.  

With all of this personal transparency, it’s hard to believe things are still a bit opaque in the workplace.

According to a 2014 American Psychological Association survey, 25% of employees don’t trust their employer, and only 50% believe their employer is open and honest with them. Where does this lack of trust come from? Most likely, a lack of transparency.

Many believe transparent leadership fosters a culture of trust and communication, which, in turn, encourages engagement and productivity. But for decades, businesses ran on secrecy. Be it financial data, salary information, or success planning, privately owned companies have long subscribed to the theory that sharing critical information should be done only on a need-to-know basis.

However, as a new generation of entrepreneurs make their mark in the business world, a new trend of transparency takes hold. Millennials, who’ve grown up in the age of social media, value an open and honest workplace and are creating businesses that reflect their need for sharing.

For instance, SumAll is a young company that gives each of its employees access to heaps of critical information like investor details, capital structure and even have individual salaries posted internally. While major retailer Patagonia uses projects like the Footprint Chronicles to give transparency on their supply chain reducing negative social and environmental impacts.

What is Transparency, Exactly?

Transparency is about giving the people on your team, enough information to help them buy-in and fully commit to the greater journey of your organization. In many ways, transparency shares similar characteristics to a strong marriage with a focus on communication, honesty, regular feedback, respect and admitting wrong.

A commitment to creating a culture of trust and transparency must come from the top down or it does not work.

Why is it Necessary?

When business leaders foster a culture of trust and transparency, the entire workplace benefit in numerous ways:

  1. Solid Workplace Relationships

Relationships of any kind are built on trust. When employees quit, they tend to quit because of poor relationships with management. According to a 2014 CareerBuilder survey, 37% of respondents said they were more likely to leave their job if they held a negative opinion about their boss’s performance.

2. Clearer Company Vision

Employees are able to align with and fully understand the company vision and their role in it when management is transparent. Roles change, markets shift, and organizations transform. When you can effectively create a line of sight for your people between their daily activities and higher level organizational goals, their buy-in and purpose will increase. Be transparent about any external or internal factors that may be causing a need to pivot. Be honest about the work that they are doing and be diligent in connecting these dots.  

3. Problem Solving

By being transparent about the challenges you see, you open the door for your team members to honestly share their opinions about company problems. This breeds a culture that is better equipped to face the day to day obstacles with a realistic approach to finding better solutions in less time.

4. Employee Engagement

A culture of transparency results in employees who are more engaged. A Harvard Business Review’s 2013 employee engagement survey found that a staggering 70% of respondents felt more engaged when business leaders kept them in the loop with updates and company strategies.

Finding the Balance Between Transparency and TMI

But how much transparency is too much? When does transparency stop being helpful and start being harmful?

Transparency is not about sharing all information all of the time. Some information will add little value to your company’s culture, and sharing every single detail of your business (rumors, hunches, employee issues) will ultimately backfire. Rather, transparency is about empowering employees with the information they need to be successful.

So, how do you have open communication within your organization without crossing over into TMI?

Focus on authenticity. Authenticity should always come first. It’s important, especially for business leaders, to have some sort of lens to identify ways to be authentic and friendly without giving TMI.

Next, always help your team fully understand HOW your business functions and that every decision THEY make impacts your business’ success. Once they understand the direction the company is going, give them those details they need to help the company reach its goals.

And finally, never hide information if it is going to create fear. When people don’t understand what’s happening, they get scared, and this fear distracts from the work that needs to be done. So, be open. You want to give enough information so team members know they are okay and have nothing to worry about.

Legal Concerns

There are times when you legally shouldn’t discuss something. This could be when you’re about to go public or if you’re going to be part of a merger and acquisition. If you’re not sure if it’s something you should talk about, don’t be afraid to go to senior leaders and in-house legal teams and ask for the parameters. When it comes to legalities, it’s always better to ask for permission than ask for forgiveness.

Strong organizations have high levels of trust and create a culture where all team members are treated with respect. When balanced, transparency can strengthen relationships, empower and engage employees, and help companies turn their visions into realities. So next time you wonder if you should share or remain tight-lipped, ask yourself two questions: What is my intent? What is the potential impact?  

Gabriela McManus is Executive Director at Follow her on Twitter: @GabMcM

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