The Importance of Transparency in Leadership
“Honesty and transparency make you vulnerable. Be honest and transparent anyway.”
“Honesty and transparency make you vulnerable. Be honest and transparent anyway.”
— Mother Teresa
I like helping others and witnessing them make progress towards their goals.
Realizing that helping others grow brings me fulfilment, I now see how being a teacher, mentor and a manager are rewarding roles for me. I came very late to management, having spent the first 15 years of my career lacking good manager role models nor many direct reports from whom I could gain management experience. If you are wondering what I did for the first 15 years of my career, I spent a majority of those years in different parts of the financial services world — an industry sector, not particularly known for great management training or forward-thinking management processes.
As I launch a new venture and consider building a team around me, I have been reflecting on my approach to management over my last 10 years as an operating executive. In general, I have received very positive reviews from my teams in evaluating me as a manager and mentor.
As I think about why I have received positive feedback, I believe it is because I have treated all the people on my teams as I would have wished to be treated myself.
And at the core my approach is a commitment to transparency.
For me, transparency is a two-way relationship.
I (as the leader/manager) share with my teams most of the important developments in the company — putting the appropriate context around events, allowing people to ask questions, and proactively telling them what we are doing to address problems and challenges. I realized in talking with other leaders that I shared with my teams a great deal more than they did about the key discussion topics covered in weekly Leadership Team meetings.
And in return, I ask for transparency from my team members in two main areas.
The first request is that they talk to me openly about struggles impacting their daily job. This covers:
(i) Broaching problems in their areas of responsibility and oversight which might adversely affect company performance;
(ii) Encouraging them to ask questions (early and often, if needed) when they don’t know how best to accomplish a task assigned to them;
and,
(iii) Surfacing interpersonal challenges with colleagues when they are struggling to solve them.
When I bring people onto my teams, I am clear with them during the hiring and onboarding process that I care about their careers beyond the current role they have at this company on my team. My goal is to hold a quarterly meeting (outside the office) with all my direct reports with the conversation focusing on their longer-term career objectives and development needs.
The second part of my request for ongoing transparency is that my team members share openly when their career or development hopes and goals are not being met. I absolutely want to know early if they are considering leaving the business.
In both cases, employees sharing transparently empowers me to change things I can control. I need information coming to me so that I can push for changes that are positive for my team members and positive for the company.
For all leaders, and especially CEOs whose leadership style sets the tone for company culture, here are my thoughts around transparency. Following these behaviors and understanding these realities will help leaders, in my opinion, build stronger teams and organizations.
Acknowledge that “Everyone Makes Mistakes”: Transparency has to be modelled. It starts with leaders acknowledging that everyone makes mistakes. And stating that mistakes, though rarely enjoyable, can be a great learning opportunity. When there are hierarchies―in companies, in the armed forces or in educational institutions―it is daunting for those with less power and influence to talk openly about having made mistakes, for fear of reprisals or poor reviews that will hurt their reputation and career prospects. So, I’ve learned to tell my teams about mistakes I’ve made in my career, and about how I’ve handled mistakes made by my teams. I ask that we surface mistakes early, and tell them that as the team leader, I will own the ramifications of all mistakes. And also, that we will work as a group to learn from mistakes so we can avoid them in the future.
Be Real: Don’t just share the good news. Share the misses too. And, not just once in a while, when the miss is really bad and you have to address it. Your employees want real. They want to know how the company is truly doing. You may think “they can’t handle the truth”―if people knew everything that was going on, they may panic and look for other jobs, or worry and be less productive in their current role. Sure, there is some risk of that happening. However, I believe uncertainty, created by rumors or gossip is more pernicious. Being real levels the information playing field. And being real tells your employees that Leadership doesn’t have its head in the sand and is actively working to make things better.
Remember Everyone Knows More Than You Think: Company-specific news of all kinds―employees quitting, some people getting raises off-cycle, missed financial or operating targets etc.―travels fast. Faster and wider than you might assume or hope. Secrets are very hard to keep in a company in the digital age. And, remember that most of the finance, accounting and HR teams see everyone’s salary, know about all raises, all bonus payouts, the real cash situation and anything else remotely sensitive. So assume the information you want to protect is out there and figure out how to talk about it, framing this information in a context help everyone understand the why.
Normalize Performance: There are a lot of myths in the business world about start-up success, especially among younger employees. Help employees understand your company’s performance in the context of other start-ups. Using a sports analog, if you are a Seed or Series A stage company you are akin to a Triple AAA Baseball Team or Division III College Football Team. Those companies having completed a Series B or C fundraising are just thinking about graduating to the “major leagues”. And those further along their fundraising journey (Series D or later) are the equivalent of a professional sports team, but even then not necessarily a winner. The press reports on company performance, are focused on the huge winners (the sports equivalent would be a Michael Phelps or Usain Bolt) or big falls from grace (such as what occurred with Lance Armstrong or OJ Simpson). Employees might assume that most start-ups ought to look like the huge winners they read about in the press. Educate your entire company about normal start-up performance, trials and tribulations. It is a worthwhile investment.
All Your Employees, Especially the Best, are Continually Being Recruited to Join Another Organization: LinkedIn coupled with the proliferation of industry/function specific newsletters, google groups and slack channels mean that most employees hear about or are targeted on at least one alternative role every week. The best performers and those with skills in high demand likely get multiple inbound inquiries each week. If transparency has been a value you have lived up to, it is likely that employees will come to you before considering a move. Then, if you want to, you can make changes to meet their needs and keep them.
Transparency creates trust and trust encourages information sharing which is critical. Without information sharing, you can’t make the best decisions to help your team nor get crucial feedback from your company about challenges on the front lines. Transparency, with the appropriate business context around the information, is a powerful lever to get the best out of your teams and organizations.
The path towards greater transparency might seem scary at first, but the rewards are worth the risk.