The Purest Form of Transparency

Why do business leaders talk a good game about being open and transparent, but do a half-assed job of it?

Here’s how I see it, based on my working with leaders for 30-plus years.  Most have never seriously thought about openness or transparency, although they say they want to be totally open with their people.

They don’t know what open means.
When I suggest that “open” might mean that leaders communicate all pay-related information to everyone, they (unlike others who have been successful with the concept), opt out of that definition fairly quickly. We then discuss other levels of openness until the leadership team is comfortable with their definition of it. Usually, they end up with “semi-open.”

They don’t trust their people
Leaders don’t come out and admit it, but they proffer excuses for their lack of trust in their people with phrases like “Employees don’t want that kind of information,” or “They wouldn’t understand it anyway,” or “I’m afraid what they’d do with it.” Imagine the coach of an athletic team not sharing the game plan or the next play with his players! An unwillingness to share is an unwillingness to trust.

They don’t understand the power of openness and transparency.
If those same leaders had been with me last week, they would know what purpose-driven, financially literate people can do to take an organization to unheard of heights. I was at the “Gathering of the Games” hosted by SRC Holdings. Its CEO, Jack Stack, pioneered the concept of open book management in his spectacular book The Great Game of Business, which is enjoying its 25th anniversary this year. I believe it is among the two or three best business books ever written.

Open book management is a leadership philosophy that’s grounded in the notion of creating businesses of business people where everyone in the organization thinks and acts like business owners.  People in open book companies are steeped in business literacy, work daily to improve the financials, have huge amounts of financial information available to them (hence, the term open book) and their rewards and recognition are tied to financial performance.

Engagement scores are incredibly high. And because they focus their engagement on improving business results not improving engagement scores, a mistake many companies make, engagement drives high levels of business success.
As products of our own experiences, I find that many leaders or their communication or HR people can’t envision a truly open culture because they’ve never seen one. But when I escort them on a field trip to SRC, they tell me they are blown away.

“This is the purest form of transparency,” one senior communication person told me during one such field trip. ‘I’ve never seen anything close to this level of openness in all my years in business.”

So? Why open the books?
First, because people with information related to the goal—realizing a vision and generating cash to continue doing it—perform better than people who don’t have that information. To someone like me, that’s only common sense.

Second, opening the books builds trust. Trust builds teamwork. Teams that focus on the right things are apt to win more often than teams that don’t.

Third, it provides a daily sense of purpose—a goal far greater than “put these 1,000 nuts on these 1,000 bolts.”
Businesses that choose to play it close to the vest are clearly underpowered. In a competitive world I can’t imagine why a strong leader would put up with that condition when there’s a clear alternative.

Notice, I said a strong leader.

6 Comments

  1. Excellent article on leadership and trust, Jim.
    That is at the heart of IC issues, I believe, and you’ve captured it well.
    Short and sweet.

    Nancy

  2. Jim, very interesting….I’ll look for Jack Stack’s book as well! A phrase here resonated… a favorite book is Alexander Heron’s 1942 “Sharing Information with Employees”, in which Heron refers to 4 types of willingness to share (reluctant, paternalistic, propagandist, and aggressive). The author’s acknowledgement and the foreword from Stanford University Press indicates this may have been the first book specifically devoted to the topic of communicating with employees.

    I recommend the book as a gem for many insights on internal communications, from a past leader in industrial relations.

    Sorry to all for the lengthy comment…
    Jeff

    1. Jeff, you’re absolutely right. Heron’s book was, as far as I know, the first to address the subject. You can see a review and discussion of it at http://www.toogoodtobenew.com

      It was one of the classic books that Les Landes and I reviewed when we were working on that project.

      Jim

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