Secrecy in business is dead. Radical transparency increases performance: the more people know, the better they can do their job.
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Secrecy in business is dead. Radical transparency increases performance: the more people know, the better they can do their job.
By Gustavo Razzetti
October 3, 2019
Trust and radical transparency have become popular workplace demands. People want to be aware of what is real and true.
Secrecy is dead.
The digital age has changed the levels of transparency we expect from organizations. We want our leaders to be more human, honest, and vulnerable.
A whopping 87% of employees surveyed by Slack said they hoped their next job would be transparent.
“Transparency is the ability to understand. It’s the ability to be open and honest about what we know and expect. Transparency is the new normal.” — Robert Hohman, Glassdoor co-founder.
With transparency comes tremendous responsibility. Sharing information increases engagement and collaboration.
At Fearless Culture, helping organizations embrace transparency is at the core of what we do.
Studies have shown that a transparent corporate culture improves morale and increases the bottom line. Our experience with clients also confirms that.
Radical Transparency is not about sharing everything. It’s making sure people are not kept in the dark.
Get rid of secrecy. Ensure your team has all the critical information for them to do a great job. Here’s how.
Transparent cultures are more attractive
Transparency is appealing to humans. Yet, most managers fail to convey openness. Fifty-eight percent of employees trust strangers more than they trust their own bosses.
People are more eager to work for transparent, trustworthy managers.
Research found that 62 percent of candidates feel better about a company that responds to reviews on Glassdoor.
People trust transparent companies
How can you trust someone who hides their thoughts? Or an organization that doesn’t share necessary information?
Secrecy is the enemy of trust. Customers want to do business with companies they can trust. Organizations that offer clear refund policies or sales prices are more likely to win clients.
Transparency is vital to building Psychological Safety
To perform at their best, high performing teams need to feel safe to speak up and experiment.
Psychological safety is the belief that a team is safe for interpersonal risk-taking. It requires rewarding candid and honest behaviors. Rather than hiding their thoughts or ideas, people are open with each other.
Employee engagement is correlated to transparent behaviors
Transparent companies show a higher level of engagement. Honest managers encourage people to focus on the work — there’s no need to protect our backs.
A study found that transparency is the number one factor contributing to workplace happiness. When employees are more engaged, they can focus on producing new and exciting ideas.
Transparent organizations perform at a higher level
Openness reinforces a sense of belonging. It strengthens teamwork and collaboration.
Take Buffer’s transparent salary approach, for example. It created a lot of polarizing reactions. But, in the end, it turned Buffer into a cool place to work.
Transparency doesn’t mean sharing or saying everything. There’s a difference between being honest and speaking without any filter at all.
So, when does transparency becomes gossip-mongering?
Openness should be based on a right-to-know and a need-to-know basis. If the feedback won’t help someone improve, what’s the point in sharing?
Some critics of Bridgewater’s Radical Transparency say that it fosters an aggressive culture.
The New York Times reported that Bridgewater used to show new employees a video of a confrontation between top executives and a female manager, who breaks down crying.
The video was intended to give a taste of Bridgewater’s challenging culture that puts employees on the spot.”
Dalio acknowledges that “Radical Transparency” takes its toll:
“While their “upper-level you’s” understand the benefits of it, their “lower-level yous” tend to react with a flight-or-fight response. Adapting typically takes about eighteen months, though it varies from individual to individual, and there are those who never successfully adapt to it”
Transparency should be used widely but also constructively. It’s about helping people grow, not testing how much they can take.
Radical Transparency requires psychological safety — people should feel free and safe to express themselves. Organizations must find a balance between challenging their employees and emotionally harm them.
Most importantly, there’s no such thing as one size fits all.
Before moving towards Radical Transparency, understand where you are. You must know your current limits before you start stretching beyond them.
Dalio recommends three ways to build Radical Transparency:
1. Find mutual agreement individually. The two key questions to this are, “Should I tell you what I really think?” And, “Can you be free to tell me what you really think?”
2. Design the boundaries of radical transparency. Decide on what’s right for your particular culture. Also, consider legal implications that might affect what can’t be disclosed.
3. No more “closed door” conversations. Avoid secrecy and speculation. Encourage people to be open and honest — turn feedback into a frequent gift.
Transparency should encourage clarity, fairness, and collaboration. But pursuing transparency just for the sake of it can become a burden.
Emma Brudner shares two simple rules to ensure your transparency policy is helpful.
1. Are they privacy considerations?
People expect privacy to feel safe at work. And that assumption varies from individual to individual. We cannot assume that everyone will feel equally comfortable.
The Director of People Operations at Lola.com suggests that, when in doubt, ask people. What are they comfortable sharing, and what not?
Privacy plays a critical role when legal issues or sharing sensitive information could have a negative impact.
2. Is more info going to be distracting or distressing?
Transparency is helpful when it empowers people to do their jobs. But, sometimes, if you don’t have everything mapped out yet, you could create unnecessary anxiety.
Brudner recommends asking yourself:
Can people do anything productive with this information today or in the near-term (one-three months)?
Will this context help them be better at their jobs today or in the near-term?
If the answer to both questions is no, it’s better to hold off communication. This doesn’t mean you need to have everything 100 percent-baked, either.
What are the key traits of a culture of transparency?
William Arruda, cofounder of CareerBlast.TV shares five characteristics in his Forbes article.
1. They communicate the company’s vision
Aligning people around a shared purpose is vital to move the organization forward.
Having clarity on why team members work together, increases collaboration and engagement.
2. They tell the whole truth
Leaders love telling the good news. But sugarcoating internal communication decreases trust and engagement.
People can tell when they are being fooled. Honesty, on the other hand, increases people’s desire to help. Everyone will rally around when an event threatens the team.
3. They don’t delay sharing information
No one likes surprises. Especially finding out about something that affects your future when it’s too late.
Don’t keep your team waiting. Transparent organizations thrive by staying on top of information. They share the information as soon as possible.
4. They make important documents available
When people are aware of the company’s financials, they will work harder to increase results.
Arruda shares how HubSpot company turned its employees into insiders. The marketing software gave them access to financial data before it was made public.
“It’s an attempt to provide workers with a better understanding of HubSpot, so they feel more invested in its success,” the company said.
5. They establish trust through social media
Social media has become the tool of choice. Not only for peer-to-peer interaction but also to engage with organizations.
Transparent organizations leverage the power of social media. They interact with the community and future employees by embracing vulnerability. They don’t tell a picture-perfect story but a human one.
Sharing vital information will make everyone understand the goals of the company. It will also empower people to make better decisions.
Autonomy increases personal accountability. When people feel trusted, they become more invested in the organizations’ success.
Transparent organizations care more about getting things done than titles. They organize people around roles with clear accountabilities.
Asana establishes areas of responsibility or AOR, rather than reporting up to a boss, individuals own performance metrics.
The AORs change every week, depending on changing priorities. No one is stuck making decisions. Distributed responsibility increases accountability and allows people to develop expertise.
Most organizations share their goals but forget to keep teams informed on how they are doing. Sharing results regularly allows people to adapt to the new reality.
Sharing results can help people understand (and plan) during a struggle or high-growth periods.
Even if you hire the best people, if you tell them precisely what to do, you limit their potential.
By offering context of what matters to the organization, encourages people to contribute more effectively.
Some organizations share their board meetings minutes with everyone. When people understand the context, they are better prepared to act.
Not everyone is comfortable working in a transparent culture. Hire people who are excited about it. Share your approach during the interview process to see if it resonates with candidates.
Bring in people who have experience working in transparent organizations. It will help you spread the movement and also bring in new practices.
Every organization has issues that everyone thinks, but nobody says. What are yours?
Identify and challenges those taboos. Encourage people to talk about sensitive topics. Transparency means addressing issues like adults, not avoiding them.
Open dialogue drives transparency.
Spotify uses town hall meetings, so that everyone will understand what’s going on. Employees, submit any questions they want, that are then upvoted — senior leaders must answer the most popular.
UKTV, a British broadcaster, has a big black box with a question mark in the center of their office. Employees can drop anonymous questions whenever they want.
During their town hall meeting, the CEO must answer all the questions.
Salary transparency is becoming a more common business practice, as I wrote here.
Whole Foods, SumAll, or Buffer list salaries publicly or share compensation formulas. They believe pay-transparency increases focus and eliminates gossiping.
Though this practice is controversial, it is very effective in being radically transparent.
Porch.com holds a 30-minute all-hands session every Friday. In this session, it provides clear business priorities, progress, and a real-time view into product development.
The home-improvement network also uses the “Around the Porch” all-hands to make announcements and share shout outs.
Enterprise collaboration softwares like Slack or Yammer facilitates communication and also increase transparency.
Smarkets, a London based betting exchange company, shares all meeting notes openly. Employees use Slack to encourage internal, open communication.
Even the code that engineers create is accessible in a global repository.
Helping employees quit — and paying them an incentive — feels insane, But research suggests it’s worth considering it. Such incentive increases overall performance, and it reinforces a sense of belonging.
Zappos offers new recruits a $4,000 bonus if they decide to quit on week three. No questions asked.
The company puts employees against the wall. They must choose if they care more about money or being part of a customer-obsessed culture.
Transparency is not a cure for all cultural tensions.
Evaluate the pro and cons. Understand what the issues affecting your company are and how embracing transparency can help create positive change.
Understand your limits and start moving beyond them. Transparency is a behavior. Rather than praising radical transparency, start acting more openly.
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