Organizations of all sizes are encountering an increased demand for transparency from their customers, their employees, government regulators, activists, and the general public. In the wake of the Great Recession and the resulting banking scandals, there has been a national call for easy and open access to corporate information. Also, the Internet Age has made it easier than ever before to locate and uncover corporate documents, making it more difficult for organizations to hide information.
This has forced companies to become more proactive in their communication. However, organizations cannot simply make lofty statements about transparency. They must be willing to put their claims into action, proving to stakeholders that they value a free and open flow of information.
External vs. Internal Transparency
External transparency looks at the outcomes of communication with customers, shareholders, vendors, partners, and the public. External transparency has never been more important than in today’s world of connectedness, social-media, and the 24-hour news cycle. Organizations stuck in a reactionary method of communications rather than a proactive model of transparency, can quickly find themselves caught off guard in the event of a crisis. When a company commits to a philosophy of sharing the good with the bad; the chances of being blindsided by scandal or negative press are greatly reduced.
Internal transparency, on the other hand, measures how open a company is with its employees. The traditional corporate model was very paternal – organizations would share very little with employees, and leadership kept a tight grip on the flow of information. This model is rapidly becoming obsolete, as employees demand more from their leadership team.
Internal transparency is becoming a best practice for organizations that wish to build a strong and loyal workforce. Tiny Pulse, an organization that conducts employee engagement surveys, recently published a study that examines the practical benefits of implementing transparency. According to the study, management transparency is the number one factor that determines employee happiness. A happy workforce is a connected and engaged workforce, and organizations that promote and demand management transparency cultivate a productive environment where all employees feel a sense of ownership.
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A commitment to both internal and external transparency can impact a business by:
- Contributing to the organization’s credibility.
- Improving corporate performance through an engaged and productive workforce.
- Increasing the effectiveness of the organizations through a more “plugged-in” perspective on how its actions impact public sentiment and perception.
How Transparent is Your Organization?
Transparency is not achieved through declaration or intention. Rather, it is implemented and achieved by design, and typically starts with the help of third-party assessments. A fresh, outside perspective is required in order for a leadership team to fully understand the changes that need to be made and the processes that need to be adopted to become more transparent.
The path that every leader and every organization takes to become transparent will differ based on style and where they are currently. But there are nine critical behaviors that all leaders must cultivate in order to claim transparency. According to Barbara and Elizabeth Pagano, authors of the book The Transparency Edge, these nine critical behaviors include:
- Requesting and gathering feedback.
- Remaining composed, even during the most difficult of times.
- Letting your personal side show.
- Always keeping your promises.
- The ability to say you’re sorry.
- Delivering bad news with compassion.
- Avoiding destructive language.
It can be difficult to implement these behaviors without a plan and without regular feedback to track progress. An independent, 360-degree assessment can help leaders identify their strengths and weaknesses in these nine areas. Such an assessment also helps organizations and leaders map their path to transparency, setting up milestones and accountability plans to improve their chances for success.
Transparency isn’t achieved overnight. It can be a long process, and a fear of exposure can often hold leaders back. But transparency is critical in today’s corporate and social climates, and organizations that understand and implement transparency will strengthen their workforce, improve their credibility, and gain a true competitive advantage in the marketplace.