transparency is the secret to trust

This One Trait Can Make Or Break Your Business

Leadership development and leadership training are very popular topics these days, and for good reason.

Great leaders aren’t born that way. Great leadership comes from dedication, hard work, and tons of practice. But there’s one trait that can increase employee happiness and make your business an incredible success.

This trait is important for two reasons:

  • This trait is the foundation of relationships
  • Implementing this trait costs zero dollars

The trait I’m talking about: Transparency.

Why Transparency Matters

Transparency is important for a few reasons, but the most important one is that transparency is the foundation of trust.

Any leader that wants to have a better relationship with their employees or colleagues needs to understand how important transparency is. The foundation for any good relationship is trust, and the foundation for trust is transparency.

Employees will work harder for you, respect you more, and you’ll be able to solve problems much faster if you’re being transparent. We often skate around what we’re truly trying to say, but if we’re all transparent, then we can reach our end results quicker.

While transparency costs nothing to implement, there is some long term work that needs to be done. Managers need to continue working on being transparent, and should be asking for feedback on how they’re doing.

Warren Bennis, business professor and co-author of Transparency: Creating a Culture of Candor, offers evidence that transparency supports financial success: “Again and again, studies show that companies that rate high in transparency tend to outperform more opaque ones.” He cites a 2005 study finding that a group of 27 U.S. companies noted as “most transparent” beat the S&P 500 by 11.3 percent.

Examples Of Transparency At Work

There are two case studies that I want to talk about, these companies are redefining what it means to be transparent in business, and I’ve mentioned them several times on this blog.

These companies are now being recognized as having some of the greatest company cultures and happy employees. Many other companies look up to these two companies for inspiration. I believe, that one of the biggest reasons why these companies are successful is their commitment to transparency.

hubspot example of transparency

Hubspot, a marketing automation software is well-respected in terms of their company culture that every other company should take note. Their famous Culture Code has been viewed more than a million times and I’ve even used parts of it for my Linkedin profile and cover letter.

I’ve spoken with their VP of Operations Elizabeth Graham about their amazing culture and the “radical transparency” that they embrace at Hubspot.

One of the many things they do to embrace transparency is a public wiki that anyone can see with tons of information on it. We spoke about it during our talk:

The fantastic thing about the wiki is it’s really democratic. Anyone at any level in the organization can voice their opinion or put a blog up… Everybody, Brian Halligan, our CEO, to Dharmesh, our CTO and Brian’s co-founder, down to sales reps who have been here for two weeks. Everybody can chime in on the wiki. It is truly remarkable and really radical transparency.

Up until about three years ago, at least in my mind, Hubspot was known as the leader in transparency. Then Buffer came along, and completely changed what it meant to be transparent.

buffer is transparent

They publish everything, and I literally mean everything. Things like financials, revenues, salaries, how your money is being spent (down to the cent), funding information, etc. They never cease to amaze me with how much they publish.

They even have an entire section on their blog called “Open” which is just their posts about their culture, their journey to being more productive and happy. They share this with everyone in the hopes of becoming more authentic.

Transparency breeds trust, and trust is the foundation of great teamwork. – Joel Gascoigne, CEO of Buffer

I’ve spoken with their Chief Happiness Officer, Carolyn Kopprasch about their amazing culture and how they handle transparency.

The Transparency Paradox

In many companies, managers will watch what their employees will do, and you would think that this level of transparency would be good for everyone.

Harvard Business School Assistant Professor Ethan S. Bernstein shows that decreasing the observation of employees can increase their productivity. In his paper “The Transparency Paradox: A Role for Privacy in Organizational Learning and Operational Control”, which won the 2013 Best Published Paper Award from both the Academy of Management’s Organization and Management Theory Division and Organizational Behavior Division, found that production at a manufacturing plant in China seemed to slow down whenever the employees knew they were being watched.

The research team studied production lines for five months. On one set of randomly chosen lines, the employees worked out in the open, as they always had. On another set of lines, each production line was concealed behind a curtain, out of management’s view. The researchers found that simply hanging that curtain increased production by 10 to 15 percent.

By providing employees with that privacy, it gave them the autonomy they needed to test different ideas without the fear of management looking over their shoulders. Once they were able to discover better ways of doing things, they presented the ideas to their managers.

This is the transparency paradox: broad visibility of employees at work may lead to secretive behavior, thus reducing real transparency, whereas boundaries may actually increase it.

How You Can Be More Transparent

It really comes down to being incredibly open and honest, no matter the situation. Here are a few simple things to keep in mind in order to be more transparent.

  1. Keep your messaging consistent – It’s very important to stay consistent with your message to maintain transparency. If you tell different people different things, you’ll look like you’re not being truthful.
  2. Keep your promises – This is the core of trust. If you say you’re going to do something, you better do it.
  3. Be honest, even if it’s negative – Employees will see that you’re committed to transparency if you share all news with them, no matter how negative.

How You Can Measure Transparency At Work

Naturally, I’m a big fan of using employee engagement surveys to measure things like transparency at work. The first step to improving anything is to measure it to know where you stand. Here is a simple example of a question you could ask in an engagement survey to measure transparency.

On a scale from 0-10, how transparent is your manager?

This question deserves a qualitative follow up. This is where you’ll get the best ideas on how to improve transparency. But forewarning, don’t ask this question unless you’re ready to act on it.

What’s one thing we can do to be more transparent?

Transparency is always something that you can work on improving, and there’s no such thing as too much communication. Your employees will thank you for it, and your culture will forever be improved.

How Do You Handle Transparency?

Any advice to share? Let me know your thoughts on Twitter @JacobShriar or @Officevibe.

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