Why most organizations lack transparency (and what we can do about it)

Transparency is one of the key ingredients for a healthy and successful organization. And yet, in most companies, there’s a lack of transparency—not an abundance.

Why most organizations lack transparency (and what we can do about it)

There are different reasons for this situation:

  1. Concrete benefits are unclear. It’s easy to agree that transparency is important. But unless leaders have a thorough understanding of the concrete benefits it brings, they won’t be motivated to take action.
  2. Pitfalls aren’t openly discussed. There’s more to transparency than just “opening your books.” It’s important to know what to watch out for and how to get it right.
  3. Real-life advice is hard to get. Turning abstract goals like transparency into concrete actions is notoriously hard. And because only few people share how they’ve actually done it, there just isn’t a playbook you can follow.

In this essay, I promise to cover all three of these aspects. Let’s start by whetting your appetite for transparency!

#1: The benefits of transparency

Why should you invest your time and energy into making your organization more transparent? After all, there are a million other things on your plate…

But transparency comes with an incredible amount of potential. It can help you foster, build, and protect a couple of vital elements for a healthy and productive work environment.

(1) It’s an antidote to uncertainty.

Some things are best understood by looking at their opposites: when a culture lacks transparency, that void will be filled with an abundance of uncertainty. And this has a serious detrimental (and dangerous) effect on a team. Not knowing where your ship is sailing is a deeply unpleasant feeling that can cause anxiety and stress—and a team member that’s stressed and anxious will be neither happy nor productive.

(2) It’s a strong signal of trust.

For founders and leaders, being transparent means being more open and sharing more information with their teams. This is a strong signal of trust that employees will greatly appreciate.

(3) It’s the basis for better decisions.

In a transparent environment, teams have all the information they need. As simple as this may sound, it really is a crucial requirement for making better, more informed decisions. High performance is only possible in an environment where every team member has access to all the information they need to do their job well.

#2: The pitfalls of transparency

Even the most well-intended initiatives can backfire when they’re done wrong—and the same is true for implementing steps to become more transparent. It’s absolutely possible to overwhelm people with information: you can scare them, you can confuse them, and you can lead them to draw wrong conclusions.

The big takeaway is that transparency must be more than just “dumping tons of raw information onto people.” Giving people more information is only half the story. Because information alone isn’t enough. We need to provide the context and explanation necessary to understand that piece of information.

Let’s look at a concrete example. Let’s say you decided—for the first time ever—to make last month’s sales numbers open to the whole team. Members of your sales team will be able to interpret these numbers. Many other roles on the team, however, might have a hard time making sense of them.

There will be a wide range of questions running through your teammates’ heads:

  • “Was this a good month for us… or a bad one?”
  • “Are we rich now? Can we plan the next team offsite in the Bahamas?!”
  • ”Or are we close to bankruptcy??”

Our job as leaders isn’t just to share information, it’s to help your team make sense of it . We need to put things into the bigger context—to avoid worries, misunderstandings, and false conclusions.

#3: How to foster transparency in practice

Finally, let’s talk about how you can actually make your organization more transparent.

As an entrepreneur and founder myself, I’ve always been on a mission to lead with transparency in mind—and I am now helping other leaders build connected and successful teams. All of the following suggestions are tried-and-tested, in my own companies and in the companies that took our “Building Better Teams” masterclass.

Building Better Teams
Building Better Teams is a masterclass for founders and leaders. We help you build connected and successful remote teams — where performance and productivity go hand in hand with trust and respect.

No. 1: Give detailed reasons for your decisions

You might have made the best decision in the world. But if your colleagues don’t understand why you made the call you did, you’re inviting problems. Some of your colleagues will start to wonder... and finally come to their own conclusions. These conclusions don’t have to be correct. But they’re perfect reasons for worry, misunderstandings, or even conflict.

We can prevent all this by being transparent about our decisions. By making sure to always explain them thoroughly. Even in cases when we think there’s not much to explain. Remember that making a “good” decision is only half the battle. The other half is about explaining it, giving context, and including your colleagues.

👉 To put this into practice:
Think about recent decisions you’ve made. If you were to ask one of your team members or a peer about this decision, could they explain the why? Are there any recent decisions you could explain more thoroughly? E.g. in one-on-ones or in a town hall meeting?

No. 2: Talk about strategy, roadmaps, and goals

Let’s stay on the topic of decision-making for a bit longer…

If we want our colleagues to make better decisions, they need to know about the big picture. They need to hear about high-level topics like strategy, roadmaps, and goals.

This means that founders and leaders need to talk more often about these things. And they need to do this not only with their leadership teams, but with the rest of the organization, too.

👉 To put this into practice:
Could you—on a regular basis—talk more about strategy, roadmaps, company goals? What communication format could you use for this? (E.g. town hall meetings, internal blogs, one-on-ones, etc.)

No. 3: Ask people what they want to learn more about

Sometimes, it’s healthy to turn the typical flow of information on its head. While it’s usually leaders who choose which information to reveal, why not ask employees what information they’re curious about?

On the one hand, this is a great way to be more transparent. But on top of that, it’s also a demonstration of trust and respect for the other person.

One-on-one meetings with your direct reports are a perfect place for conversations like these.

👉 To put this into practice:
Consider asking questions like the following in your next 1-on-1s: “What area of the business would you like to learn more about?” or “Can I explain a bit more about X or Y?” And before your next all-hands meeting, invite input into the agenda.

No. 4: Create high-quality documentation

In most organizations, documentation is still an underestimated topic. But we have to put all the internal processes, habits, and rules that keep an organization running in writing. Here's why this is so valuable:

  • It explains how things work in detail (this makes your processes more robust and less error-prone)
  • It reminds people (even if you’ve already talked about something in a meeting)
  • It helps onboard new people (you don’t want to repeat everything orally)
  • It makes the organization independent of individual key people (people can have a vacation without things coming to a halt; you remove “single points of failure”)
  • It makes things “official” (when it’s written down, it’s much more real and credible)
👉 To put this into practice:
Do you have a documentation platform or an intranet? Does everybody have access to it? What topics are currently undocumented or out of date? Who could write those?

No. 5: Be transparent about yourself as a person, too

Sharing things about yourself (from your work style all the way to your chocolate preferences) helps people get a better picture of you as a person.

This might sound like an insignificant detail, but it really is the basis for one of the most important ingredients of successful teams: trust! Only if we start getting to know each other as human beings (beyond our roles) can we start to develop trust.

Before you start to put yourself under pressure, however, please keep in mind: YOU decide what and how much you want to share!

👉 To put this into practice:
When you ask your direct reports in your 1-on-1s about their life, then also speak (at least a little bit) about your own! In a careful and non-intrusive way, ask people about their hobbies, families, and if they prefer coffee over tea. Then return the favor by revealing a bit about yourself, too!

Great companies live and breathe transparency

Transparency—along with trust and respect—is a key quality that distinguishes good companies from great companies.

As founders and leaders, our challenge is to find ways to truly embody these qualities within our teams. The tools I discussed in this essay are all tried and tested. Feel free to adopt the ones that align with your team's needs and resonate the most.

The effects may not be immediate. But I assure you that you’ll notice the benefits sooner than you expect.

Editor's note:

Webinar tip: Building World-Class Remote Teams Through Relationships, Communication, and Psychological Safety

If you enjoyed learning from Tobias as much as we did, you should know that he’s also running a free online workshop about the critical ingredients that make remote teams successful. Learn what you can do to grow strong relationships and a culture of psychological safety within your team, and understand how communication can foster productivity, focus, and connection—instead of stress, distraction, and misunderstandings. Save your seat today

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