Why Transparency Supports Healthy Organizational Culture
Some of you may know that I host the Twitter chat, #KaizenBiz every Friday (you can read about our more recent conversations here) and often there are interesting lessons or insights that come from the live chat. As someone who coaches business owners and executives to become better leaders, a healthy organizational culture is often a topic or very near the surface.
But what is organizational culture?
For the small to mid-sized companies I work with, culture is often the expression of the business leader. Since small to mid-sized companies are more compact and connected than larger corporations, it is easier for the business owner/ CEO to express to everyone how he/she wants things to be and, in growth organizations, to become. That means values and behaviours are obvious and the meanings and purposes of these values and behaviours is idiosyncratic to that company. As an example, one of my clients makes it a point to be available for face to face conversations, ask questions and share a lunch with everyone once a month. Another client in a bigger organization believes in hiring smart people and he lets them know his expectations and then gets out of the way for the day-to-day execution of these expectations. He is doing what he is good at and, consequently, so are his employees.
Transparency and culture
You may have heard a lot of discussion about transparency in various places. According to the Business Dictionary, transparency is
“Lack of hidden agendas and conditions, accompanied by the availability of full information required for collaboration, cooperation and collective decision-making. [Also as definition] Minimum degree of disclosure to which agreements, dealings, practices, and transactions are open to all for verificaton.”
One would think that smaller organizations would have less machinations and hidden agendas than their larger counterparts but politics are everywhere.
What could possibly go wrong?
Most small companies operate in a clear and legal manner. But there can be some pitfalls or unforeseen consequences when corporate culture stems from the leader as alleged actions by New Jersey Governor Chris Christie and his administration are being reported. Now the temptation is to say that politicians are corrupt anyway but I remember working for a doctor who would lose his temper in such a dramatic fashion and belittle others that people were literally afraid to speak up in meetings. Consequently, this small organization had high turnover, backbiting amongst colleagues and absolutely no faith that your immediate boss would ever back you if you needed it.
But there are other things to consider:
- Lack of common definition of privacy and discretion: (thank you to Lois Martin for highlighting this) With multiple generations in the workplace, privacy and discretion have morphed over time and it is up to the leader(s) to clearly state what clients and the public can know about the company. This can be also seen as professionalism.
- We live and work online: There are risks and responsibilities as this McKinsey report discusses. Cybersecurity is an issue for all businesses, regardless of size.
- People may bring a negative perspective from their previous employer: As you grow, you hire new people and they bring all of their experiences, good and bad, with them. Their stories may color how they share information, show intiative or handle disappointment in your organization.
- Euphemisms: Transparency depends on people saying what they mean. If you are “demising” jobs, let people know to expect their job may be eliminated.
- Consistent ethical code: Transparency is really an encapsulation of certain values — respect, integrity, honesty — and if you are cutting corners, your employees will cut corners and this, ultimately, affects attracting and retaining your customers
When you stop to think about it, it brings up all sorts of questions about organizational culture, individual behaviour choices and the validity of an ethical professional code.
What could go right?
Of course, there is always another side. Part of the most recent discussion about transparency are the advantages it gives to businesses. Small to mid-sized businesses may have been onto this for some time. Quite often you know your customers by name and understand how important that “know, trust and like” factor can be.
- Differentiation is clear: While you have much in common with your competitors regarding customer service or even type of product or service you offer, your words and actions, source of materials, vendors and clear wording on policies (without the super fine print) and procedures invites trust.
- Happier employees: If you have ever worked for a boss who was tough and fair, you worked for a leader who was transparent in his/her expectations. A 2013 TINYpulse employee satisfaction survey reported that transparent managers had a “correlation coefficient 0.94 with employee happiness.” Good management fosters better morale and productivity.
- More accurate information about what customers like/dislike: Open, two-way communication with your customers enables better data gathering on what your customers buy from you and what sorts of improvements are most desired.
- Clear internal communications: When the business owner/CEO takes the time to listen and interact, it becomes clear that the whole organization is supposed to listen and interact.
- Supports accountability: When the decision-making process engages both the leaders and those assigned to executing the business goals, it is easier to know why a goal was chosen, who will do the work and when it is scheduled to be completed.
Transparency helps you develop a healthier organizational culture
It does take some work and maybe even retraining on your part to become more transparent. On the other hand, having the ability to know who works for and with you simply provides an excellent foundation for transparency. On that you can build out how the values of honesty, respect, integrity and professionalism will be expressed in your culture.
What reasons do you believe that transparency is important in a small to mid-sized business?
When could transparency harm your small to mid-sized business?
How much transparency is needed to develop a healthy organizational culture?