The Case for Transparency: Ten Reasons Your Company Should Keep No Secrets From Your Staff

Do your employees really know what’s going on with your firm? And don’t be worried that they can’t handle the truth. Bestselling author Quint Studer offers some convincing reasons to create a culture of transparency – starting now.

The economy may be improving – inching upward degree by painful degree – but employee moods aren’t following the trend. Perhaps you’ve noticed that staff seem anxious and distracted, either hiding out in their offices or aggressively vying for credit in an attempt to shore up their positions in the firm. It’s obvious everyone is worried: Are layoffs imminent? Will I have a job next week? In fact, will the firm even survive the year?

If you’re like most leaders, you have a pretty clear picture of the state of your industry, the context you operate in, and the financial health of your firm. And you’ve likely wondered: How much should I tell them about what’s really going on behind the scenes?

The answer is simple, says bestselling author Quint Studer: the more the better. (And there really shouldn’t be a “behind the scenes”!)

“Leaders have talked about transparency for a long time, but it’s never been more important than it is now,” says Studer, author of the new book Straight A Leadership: Alignment, Action, Accountability. “Remember, we share information with staff for a couple of reasons: one, it’s the right thing to do, and two, it’s good for business. And most companies can use every possible edge these days.”

If your firm doesn’t have a culture of openness and free-flowing information, now is the time to move in that direction, says Studer. He offers the following reasons why you should embrace transparency:

Staff assumes the worst when they don’t hear from leaders. Silence from the executive suite causes a lot of fear and resentment, which certainly doesn’t contribute to a productive culture. “Maybe the news is bad, but maybe it’s not as bad as they are imagining,” says Studer. “And even if it is, once they know the truth they can plan and act accordingly.”

Transparency helps staff connect to the why. When staff are working in a vacuum, they can’t see the financial “big picture,” and decisions leaders make may seem ill-advised or unfair or simply inexplicable. Transparency connects them to the why – and that understanding propels them to act. “You can ask people to change their work habits and established processes all day long,” notes Studer. “But if they don’t know why they’re being asked to change, they won’t change – at least not for long.”

Staff may not understand how the external environment affects the company. Leaders are aware of new laws affecting their industry, innovations reshaping the marketplace, financial pressures facing their clients, and so forth. It’s their job to know. But managers don’t necessarily see the same picture – and frontline staff almost certainly don’t. “Creating a transparent firm helps everyone stay mindful of the forces affecting the bottom line,” says Studer. “And I think most leaders will agree that those forces have never been more volatile.”

Transparency allows for consistent messaging across the firm. When you commit to transparency, people don’t have to get their (speculative, distorted) news through the grapevine. They hear what’s really going on, in a controlled and consistent way, from their leaders. By the way, says Studer, it’s a good idea to train managers in “key words” they can use to ensure all staff in all departments are hearing the same messages positioned in the same way. (In other words, you’ll greatly reduce the chances of a manager getting frustrated and blurting out things like, “Don’t you know we’re in financial trouble?”)

This, in turn, creates organizational consistency. When everyone is hearing the same messages from their leaders, everyone is motivated to respond in similar ways. Employees in Department A get the same kind of leadership and direction as employees in Department B. Everyone knows the rules. And this consistency trickles down to the clients, who get the same basic experience regardless of who they’re dealing with. “Consistent firms tend to be healthy, stable companies,” says Studer. “And transparency and consistency are two sides of the same coin.”

Transparency leads to faster, more efficient execution. When times are tough, execution is everything. And the ticket to good execution is good alignment: All sectors of an organization must understand exactly what’s required so they act in a coordinated and collaborative fashion. Transparency is what facilitates that kind of alignment. “It’s all about a shared sense of urgency,” notes Studer.