Transparent Leadership
- Eva Luong
- Nov 19, 2018
- 5 min read
Updated: Dec 5, 2018
The Importance of Transparency in Leadership
Being honest and open with your followers is an effective solution to improve ethical behaviour in the workplace. These behaviours will shape the company's overall culture. A culture that values transparency in the workplace will foster positive employee engagement, productivity and efficient team collaboration which will help increase a firm's profit margins and reduce employee turnover rates.
With a transparent leadership style, trust will be built. When your followers feel a strong sense of trust in the organization they will be more committed to all aspects of the firm. Transparent leadership allows leaders and followers to build a closer and more open relationship with one another in order to generate a more healthy and ethical organizational climate. Transparency helps leaders to show their employees the 'why' to their work. This will help them understand exactly where they fit into the organization and how their work contributes to the overall picture. Understanding the importance of their work, followers will feel a sense of belonging which will motivate them to perform better.
How Transparency Works
Getting employees to effectively work together and be in tune with organizational goals can be as simple as showing them who you are so that they understand the reasons behind your decisions (Allen, 2017). Do not be afraid to confess to your mistakes, rather be willing to acknowledge and own up to them. In doing so, your employees will be honest back.
Ethical leaders create transparent culture because they have nothing to hide. Even when no one is around they will continue to follow their moral compass because they are genuine and open in their actions. These leaders lead by example. They will change themselves when they realize change is necessary and not hide the changes. As a matter of fact, they will thank the team for their critical feedback (Graybill, 2018). Transparent leaders do not have a hidden agenda nor do they plan to use one side of the truth to influence their followers, rather from the best of their knowledge they adhere to the most accurate truth that they know.
To promote transparency within the organization, it is best to be the first to open up. This will encourage other team members to do the same. The results will increase innovation, quality performance and employee engagement.
In fact, a 2013 Harvard Business Review on an employee engagement survey revealed that 70 percent of respondents found they feel most engaged when the top management of their firms continually updates and communicates company strategy openly to their employees (Harvard Business Review Analytic Services, 2013). A great example of a leader fostering an exceptional corporate culture of transparency would be the CEO of SEOmoz, Rand Fishkin. The SEOmoz president does not hide anything from his employees nor the public, not even his own performance reviews (Hall, 2012). Not only that, but he also made SEOmoz funding decks open to the public (Hall, 2012). On it, you can see the company's failures and successes which can help others learn from SEOmoz's experiences. This culture of openness allows SEOmoz to gain a reputation of trust and employees' loyalty.
Theory
Scarcity Principle
This principle is an economic theory in which demand is higher than supply (Investopedia, 2018). When supply is limited and demand is high the determination of value will be affected greatly. People can use scarcity to make something overvalued, but it could be done unethically to falsely increase the value of the good. This principle can be applied to the censorship of information to the public. In doing so, this reduces transparency and contributes to the negative behaviours of people trying to obtain something that not everyone can access. For example, insider trading which is the act of trading in stocks that a person has certain private undisclosed information in, is using scarcity unethically for their own benefits.
However, leaders can prevent unethical behaviours by presenting the information to the public. This reduces information scarcity and the likelihood of crimes being committed in order to get the information. This also allows people equal opportunity to use the information freely to their advantage.
Implementation
Eight Methods for Leaders to Improve Transparency (University of Florida, 2016).
Show others that you care: people thrive on personal connections. Leaders need to make their employees feel seen, heard, affirmed, supported, and valued. They can nurture this relationship with employees by providing performance reports to develop the employee.
Be vulnerable: rather than being afraid of not being taken seriously if you show your vulnerabilities to followers, leaders should embrace being authentic in front of their employees. Vulnerability demonstrates sincerity which employees greatly appreciate and want from a leader. An indicator of a vulnerable leader is one who asks for feedback about their leadership performance. Knowing other's perception of you will help you better align your intentions with reality.
Be fiercely honest: employees value their leader's honesty. With clear communication of expectations to employees and not withholding any information from them, this will eliminate pervasive feelings that there are hidden.
Hold the tough conversations: do not dance around issues of performance or disrespectful behaviour, especially when noticing unethical behaviour in the office. Create ways for employees to easily report acts of unethical behaviour and immediately take action to reduce its impact in the office. This will eliminate the unproductive climate of employees not giving their full commitment and being influenced to act unethically.
Pay attention to the mood in the office: emotions play a big part in the workplace. It can influence one's thoughts, behaviours and attitudes. Transparent leaders should be aware of these factors and show employees they are concerned about them. Since one person's mood in the office can have a major effect on the rest of the team either positively or negatively.
Keep your promises: avoid using vague language, this will reduce transparency. Leaders who keep their promises on even the littlest things will gain trust on bigger things. For example, little things can be making it on time for every meeting, returning emails promptly, and following up on employee requests. Following these things through demonstrates that you are a trustworthy leader who is accountable for your actions.
Be composed: be poised and patient will reduce workplace anxiety and uncertainty since employees watch and act sensing their leader's mood and attitude. Stay confident and smile often! This shows authenticity and compassion which will neutralize workplace chaos and reduce unethical behaviours.
Deliver bad news well: do not downplay tough situations, blame others, or lie, or twist the truth. This will promote transparency and trust. Being able to communicate bad news well will show that you are a leader who, despite being placed in an uncomfortable situation, will do things for the good of the organization and team. This will motivate others to do the same and not hold back information that might hurt the team later on.
Practicing transparent leadership will promote more ethical behaviours in the workplace. People will naturally follow leaders they admire, which will influence them to act in an honest and open manner. They will be less likely to act unethically if they are satisfied with their workplace. Having a transparent corporate culture will result in a highly engaged and motivated workplace that benefits everyone.
Ted Talk
References
Allen, C. (2017, November 30). Why Transparency And Honesty Matter For Leadership. Forbes. Retrieved from https://www.forbes.com/sites/forbescoachescouncil/2017/11/30/why-transparency-and-honesty-matter-for-leadership/#5218e0d63943
Hall, J. (2012, August 27). 10 Leaders Who Aren't Afraid To Be Transparent. Forbes. Retrieved from https://www.forbes.com/sites/johnhall/2012/08/27/10-leaders-who-arent-afraid-to-be-transparent/#b7882e324e7a
Harvard Business Review Analytic Services. (2013). The Impact of Employee Engagement on Performance. Retrieved from
https://hbr.org/resources/pdfs/comm/achievers/hbr_achievers_report_sep13.pdf
Investopedia. (2018). Scarcity Principle. Retrieved from https://www.investopedia.com/terms/s/scarcity-principle.asp
Lavoie, A. (2015, April 28). 4 Reasons You Need to Embrace Transparency in the Workplace. Entrepreneur. Retrieved from https://www.entrepreneur.com/article/245461
University of Florida. (2016, October 18). Creating a Culture of Transparency. Retrieved from http://training.hr.ufl.edu/resources/LeadershipToolkit/job_aids/CreatingaCultureofTransparency.pdf
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