The Case for Transparency in Leadership

If learning leaders want to propel their organization toward greater results, including healthier profits, they must become comfortable with the uncomfortable: the complete, unabashed truth about themselves and their organization at all levels of the business.

In a 2011 Corporate Executive Board survey, organizations that successfully broke down barriers and eliminated the fear of retaliation for honest feedback substantially outperformed their peers, delivering 7.9 percent total shareholder return compared with 2.1 percent at other companies. The findings suggest that the truth is harder to come by the further up the chain it moves due to employees’ concerns around tarnishing their images, or worse, that their candor will be a career-limiting move.

On the flipside, to say nothing or to avoid the truth practically guarantees an issue won’t be resolved. As Carl Jung once said, “What we do not make conscious emerges later as fate.” Consider the subprime housing crisis of the late 2000s and the subsequent meltdown of major financial institutions as examples. When organizations do not encourage and empower their employees to surface issues or call out bad practices, the end result can be devastating.

The truth works. But truth requires high levels of transparency, which can be scary to some CEOs and difficult for leaders who may be seen as swimming upstream against cultural norms steeped in closed-door mentalities.

“When you turn over rocks and look at all the squiggly things underneath, you can either put the rock down, or you can say, ‘My job is to turn over rocks and look at the squiggly things,’ even if what you see can scare the hell out of you,” said Fred Purdue, former senior vice president at Pitney Bowes, as quoted in Good to Great by Jim Collins.

Pitney Bowes created forums to unearth organizational concerns. If they seek a competitive, viable and sustainably healthy organization, learning leaders should help to promote full transparency, equipping employees with the skill to convey a message and leaders with the skills needed to coax out the truth.

The Role of Transparency
With the advent of social media and Google, a level of transparency into business performance and operations already exists whether it’s desired or not. According to journalist Clive Thompson in his Wired magazine article “The See-Through CEO,” it would be wise to embrace the new, unavoidable “reputation” economy. “Google is not a search engine. Google is a reputation-management system. And that’s one of the most powerful reasons so many CEOs have become more transparent: Online, your rep is quantifiable, findable and totally unavoidable,” he wrote.