Is there ROI to being transparent at work?

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Transparency in business has always been a big deal to me — I’ve written posts about changing meeting structures to foster transparency and creating a culture of trust through transparency, for example — but in general, most people I’ve ever worked with who have any degree of organizational authority (i.e. senior decision-makers) tend to poo-poo transparency as a “soft” or “fluffy” concept that doesn’t drive revenue, growth, and business development. Personally, as those two links above might guide you towards, I find this attitude about the lack of ROI on transparency in business to be false, and perhaps even hideously false — to the point that it might someday destroy a few companies. Let’s explore a little bit deeper.

Lack of transparency in business: How did we get here?

Oftentimes with work issues, people ignore basic human psychology and attempt to assign utopian conditions to what’s happening. The most notable example of this would probably be “Work is a logical place!” Um. No it’s not. Work is comprised of human beings, and human beings are inherently emotional creatures, so … by definition, work is actually an emotional place. That’s why you can throw reams of process at a new project and the process might not actually work as well as you’d hope — because people gon’ be people, yo!

Alright, so here’s how this “lack of basic human psychology in workplace decision-making” ties back to transparency in business. When you get elevated at a job — i.e. when you get a promotion — you want to think of yourself as better, or more special, or more vetted in some way. The tangible way this happens is that you make more money, even if you have no real understanding of what your salary even represents. You can still see that your checking account is fatter every two weeks, right?

But money is only part of it — as you rise up a chain, you want this notion that you have more knowledge or clout or authority or expertise or whatever it is. Now remember at this point: from an evolution standpoint, your brain is designed to predict threats. New ideas are threats. People looking for information that’s “above their pay grade” is a threat. Your brain wants to shut those things down, and your brain has recently been rewarded with more money — so it wants to protect that.

So what most senior people do is simple: they withhold information down the business chain and claim it’s “proprietary.” And look — in many cases it is. But if you were take every 10 things an executive says are “proprietary” and “can’t be shared with others except the top dogs” and actually break down how many of those things are proprietary, I’d doubt it’s often more than 4–5 max.

People want to feel special in jobs, because jobs aren’t really about providing purpose — but people still chase individual relevancy while at work.

One way to feel special is to think “Only I and people like me can see or have access to this information.”

That’s the first death knell for transparency in business.

Transparency in business: How could it be an advantage?

There’s a bunch of research about changing your core organizational structure away from a hard-line, target-hitting, sales-type environment and towards one based on these “fluffier” metrics and making money in the end. Here’s some research on empathy and the bottom line, here’s some on compassion and the bottom line, and here’s some on better communication and the bottom line.

If you go to that last link, you’ll see this graphic:

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“Communication” is another one of these “fluffy” skills that have been hindering real productivity in workplaces for decades. It’s hard to toss “effective communication” on a spreadsheet and up-sell it to executives, so most people ignore it and operate according to their silo, their priorities, or their perceived deliverables. This is incredibly fraught because research has indicated both that (a) only about 50 percent of people are even clear what their job is and (b) almost no one in an organization, even the CEO’s top lieutenants, can accurately list the org’s priorities.

So the world we often create at work is this:

  • CEO sets priorities
  • Every CEO lieutenant re-contextualizes those priorities based on his/her silo
  • They communicate those new priorities down the chain
  • Middle managers internalize these priorities in terms of their tasks, deliverables, and areas of comfort
  • They communicate those new priorities to rank-and-file workers
  • See how this is a big game of telephone?

Thing is, it doesn’t matter. You can’t track “effective communication” properly, and what’s measured is what matters! And you can have an organization where no one has any clue what’s going on at any given point between Monday and Friday, but you know what? If that org makes $30M that year, fuggedaboutit! We rolling in it, baby! The bonuses are fat! Let’s dance!

“Communication” and “transparency” are cousins — not exactly synonyms, per se — so you can see why the above flow of problems would be harmful to transparency in business, even though we have reams of research on how a more transparent culture can be better for your bottom line.

Transparency in business: Failure and context

Failure is an important concept to discuss at work — in fact, there are data-backed arguments for the importance of business failure and discussing it.

Context is also important at work — we often yelp that “content is king,” and in some ways it is. But without context, the content is meaningless. Ever had a manager assign you something and send you like 14 attachments (content) but not provide any background on what the assignment really is, who’s involved, or how success would be measured? (That would be context.) Without the context, the attachments are meaningless. Sure, I’ll open them and sort through them, but I have no real idea what’s going on. I want to keep my job, yes, but eventually I’m going to lose interest or half-ass the project because, well, I have no idea what it is.

You can get to this part and say “Well, this is just some kid grousing about past managers he’s had,” and maybe you’re right. Or you can look at the 13 percent global workforce engagement score we’ve been talking about for years and wonder if there’s some connection between the above paragraphs and that. Hmmm?

OK, so here’s the deal: when you rip away transparency in business, you rip away (a) discussions about failure and (b) context. When you rip away discussions about failure, you have this vacuum culture where everyone is recast as a success even if it totally bombed. No one learns from that. No one grows either. When you rip away context, you have a bunch of meaningless projects that are due by X-Date that no one understands.

So as you reduce transparency in business, you know what you really do? You move away from “strategy” and “growth” — good things! — and towards “daily tasks” and “politics matter more than anything!” Daily tasks are necessary evils, but a shredding of transparency in business creates a super political environment — when information isn’t being shared freely, then everyone’s gossiping and assuming anyway. You’ve worked in similar places. You know it happens. It’s not unique.

Can we get better at transparency in business?

Sure. But it requires a nearly-seismic shift in how we think about work and how we think about power at work, and those will take a long time to change.

The No. 1 thing is clearly setting “what’s proprietary” and “what’s not.” Many companies get confused on this, so bring a few stakeholders — including HR! — to the table and determine it. Salary numbers are often considered proprietary, for example — but they don’t have to be. True revenue numbers and where they’re coming from are often seen the same way — but again, they don’t have to be. The hiring process, which is utterly broken at most companies, should be an aspect of transparency in business. People should be allowed to weigh in on it throughout an organization.

Alas, many organizations don’t think this way.

After “understanding what’s proprietary and what’s not,” the next thing you’d need is effective managerial training — where the focus is less on transactional tasks and more on transformative ones, i.e. better communication. You can gain a lot from transparency when managing others, but many don’t see the ROI there — and that’s largely because of how we train managers and explain their roles to them.

So at this point, we’ve shifted:

  • What actually is proprietary information?
  • How managers are trained

That’s a start — and a big one — towards increased transparency in business with bottom-line growth as a hopeful outcome. What else would you add?

My name’s Ted Bauer; I blog here regularly and you can learn about hiring me for freelance and contract gigs as well. You can also subscribe to my newsletter.

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