Corporate transparency is a hot topic right now, but there’s still a long way to go. A December 2016 BetterWorks survey of 1,000 employees found that 64 percent of respondents continued to feel that their company’s leadership wasn't transparent in communicating top goals. So, what are business leaders doing wrong?
By seeing how others have missed the mark, other leaders can be on the lookout for similar problems in their own companies.
Here are some mistakes workplace and HR experts have reported seeing firsthand when it comes to transparent leadership:
1. Believing in the ‘that’s-above-your-pay-grade’ mentality
Many leaders decide to keep things from their employees because they believe certain information is "need-to-know." Information about how the company is performing or why decisions are made are deemed topics employees either aren’t interested in or have no right to know.
However, leaving employees in the dark breeds distrust. “Employees start to ask ‘What is leadership hiding?’” Carl Seidman, a Chicago-based executive coach and consultant, told me. “Employees can become paranoid, fearful, feel unprotected by leadership, threatened in their roles, disengaged or even malicious if they feel resentful.”
But, by giving employees bigger-picture information, they feel valued. They stop thinking they’re expendable because they are included.
So, instead of thinking up reasons why employees shouldn’t know something, consider why they might want to. Are they worried they’re not meeting expectations? Do they believe that their work isn’t contributing to the team? Providing information on factors like profits can help alleviate those worries.
“It's all rooted in trust,” Seidman pointed out. “If leaders trust their employees and employees trust their leaders, they should agree that each is acting in the best interest of the company.”
2. Unclear goals and expectations
When you're talking about transparent leadership, general expectations for employees often get overlooked. It’s not that these goals and responsibilities are purposefully kept a secret; companies just aren’t in the habit of making them overt.
So, it should come as no surprise that many employees are unsure about how they should be performing.
A September 2015 Gallup survey of 550 companies consisting of 2.2 million employees found that only 50 percent of those employees said they understood what was expected of them at work. The other half of employees said they had to guess.
With all the new performance management tools available, that’s inexcusable. For instance, Lattice allows an organization to set individual, team and company goals while providing feedback to employees about how they’re doing. Everything is laid out in a clear and easy-to-understand way, so employees don’t have to stumble around and hope they’re doing what they should to help the team succeed.
Also helpful: having an open discussion about what’s going on so everyone is informed and involved.
“At my company, we meet bi-weekly to report on current workflow, what’s in the pipeline, potential new hires, marketing initiatives and anything else that is current,” Christy Lamagna, strategist at Strategic Meetings & Events in Bernardsville, N.J., told me. “We also leave time at the end of each meeting for open discussion.”
3. Undervaluing the motivational power of honesty
Transparent leadership is about more than the big picture. It also trickles down to day-to-day performance management. Everyone from executives down to interns needs a clear understanding of how they’re doing with regard to their individual goals.
“When business leaders avoid sharing real-time performance metrics, they waste time and miss a huge opportunity to motivate employees,” said David Kalt, CEO and founder of Reverb.com in Chicago. “A constant flow of important data helps employees see the company’s -- and their own -- successes and failures in real-time," Kalt said.
"This means employees can celebrate their successes and learn from their mistakes as they happen, rather than during an end-of-the-year banquet or quarterly review.”
Clear, constant feedback improves employees’ productivity by reassuring them of the quality of their work. And since that information is freely available to everyone, employees know that their performance is being noticed and appreciated by their managers.
4. Fearing the worst
Many employers withhold certain information because they fear it will cause employees to jump ship. Ironically, however, employees tend to fill in the voids with even worse assumptions.
All of a sudden, they begin fearing that executives are staying quiet because the company is going under and major layoffs are on the way. In reality, though, what leaders are hiding might be something much less ominous, like a slower sales month.
“Employers hold a death grip on any negative news; as if employees are so ignorant as to believe that only good things happen to this particular company,” said Joe Campagna, president and executive HR consultant at My Virtual HR Director in Parlin, N.J. “Even when directly questioned by employees, I have seen executives deflect, duck or even lie. This starts a death spiral within a culture.”
Campagna added that multiple aspects of a company may be affected: Engagement suffers. Great employees turn into toxic ones. Employee retention suffers. Any new initiatives designed to correct the hidden problem are dead in the water before they even start.
But bad news doesn’t have to be that destructive. “I always encourage my employers and my clients to be as transparent as possible,” said Campagna. “I counsel executives that negative news is a great opportunity to gain employee trust and loyalty and to raise productivity behind a common cause.”
5. Missed opportunities to problem-solve
As the saying goes: When life hands you lemons, make lemonade. That applies to transparent leadership, as well.
When something bad happens, like a dip in profits, instead of hiding the information from employees, approach it as an opportunity for the team to get creative. “My philosophy for my employees and my clients is to have open and effective communication. Whether it's a potential problem, a concern or a question, all these things can be best solved when shared with the rest of the team,” pointed out David Mitroff, founder of Piedmont Avenue Consulting in Oakland, Calif.
This reframes any problems as opportunities, making them seem less ominous to leaders and employees. Plus, it allows everyone to be involved in the solution, making employees feel important and indispensable.
Transparency is something every organization should work toward. But there are still a lot of improvements to make. Understanding all the benefits that come with transparent leadership makes it easier to stay focused on that goal.