What is Management Transparency and Why Do We Need it?









Transparency is about sharing information-  specifically information about decisions made, who made them and why they were made.  An on-line dictionary defines it as (4) Essential condition for a free and open exchange whereby the rules and reasons behind regulatory measures are fair and clear to all participants.


The term management transparency has moved from this specific regulatory connotation to now describe situations where managers reveal (both up the organization and down) the decisions that they have made and why they were made.  There is also an expectation today that not only managers but entire organizations will be transparent and honest and upfront about the actions that they take keeping in mind the need for congruence with their stated public values.


There are few greater blows to productivity that occur than when than senior management acts in a way NOT transparent in decisions they take – whether they be staffing decisions, financial decisions, or product decisions.  I remember one organization that I worked for many years ago (and which, by the way, is no longer in existence) that sent out a letter from the CEO announcing a major change in organizational structure.   I think that probably more than 200 person hours were lost that day, just in my department, from people meeting together in small groups, in hallways, in bathrooms, in the cafeteria and coffee rooms wondering why there was a need to restructure, who was in trouble, who might have won the probable battle at Exec. and what the future was going to be for our division and our leaders.


Now I understand the need for discretion when personnel decisions are being announced, especially those that involve a termination as this one did as not all the V.P.s.  still had a job.  And equally understandable is organizational silence in the face of decisions that have to be made that will impact their financial situation or create a possible competitor advantage.  But it seems to me that these are frequently used as excuses for individuals who believe that knowledge is power, and the more knowledge they hold to themselves the more power they have.


But it’s not just keeping secrets, justified or not, that destroy the practice of managerial transparency.  Asking for advice then ignoring it; consulting others for their opinions, then ignoring their input, issuing orders without an explanation for why the action is required (or being dishonest about the reason), and telling people that you are going to tell them something but they can’t tell anyone else, all send a message that there is little or no transparency.


But why should managers and organizations be concerned about transparency? One survey found: (From 7 Vital Trends Disrupting Today’s Workplace, conducted by TINYpulse   The study was based on analysis of over 40,000 responses to those surveys.)


Management transparency is the top factor when determining employee happiness – (In the context of this survey, “employee happiness” is a concept similar to “employee engagement.” Suffice to say, employees in a positive mindset are generally more committed to an organization and therefore productive.)  Noting the unexpectedly strong connection between transparency and happiness, the survey summary noted, “This finding surprised us too, with management transparency coming in at an extremely high correlation coefficient of .937 with employee happiness.  The cost of improving transparency is almost zero, but requires an ongoing dialogue between management and staff.  We see an increasing number of companies using transparency to attract and retain top talent.”


Managers did a solid job outlining employee roles and responsibilities – 82% of survey respondents said their managers clearly outlined roles and responsibilities.  “At the day to day team level,” the summary noted, “it seems that managers are able to effectively set expectations and accountability.”  In short, sound nuts-and-bolts operational management – trains have to run on time.


But management did not do a good job outlining their organization’s vision, mission and values –  Only 42% of employees knew their organization’s vision, mission or values.  “Too many executives,” the summary noted, “are not communicating and reinforcing their company’s guiding principles and mission.”  This isn’t surprising, as to be successful such value-related communications need to be consistent and sustained over time, and organizations sometimes view such initiatives as “soft” – nice to have but less integral than, say, product or customer communications.  (Of course, the downside is a company may end up with a sizable percentage its workforce, like 6 in 10, not exactly sure what their own business is.)


Of course, there is a major risk when senior executives keep talking about vision, mission and values.  Their staff expect them to live up to the rhetoric.