Why Strong Leaders Always Put a Focus on Promoting Business Transparency with Employees

Welcome to the Innovative Leadership Newsletter brought to you by the Innovative Leadership Institute, where strive to bring you thought leaders and innovative ideas on leadership topics.

This week we feature a guest post that is a companion to the interview on Innovating Leadership, Co-creating Our Future with Dr. Laura Morgan Roberts and Dr. Courtney McCluney that is part of the International Leadership Association interview series and aired on Tuesday, April 27th. You can listen to the interview here:  DEI: Needed Conversations and Understanding

Check out the Resources section, where we share information about the first International Leadership Association's Health Care Leader Conference and Maureen's new Building Personal Resilience Online Class.

To learn more about what we can do to help you become a more innovative leader, you can begin by taking our free leadership assessments and then enrolling in our online leadership development program.

In a leadership position, transparency isn’t likely one of the topics you think about first. Yet, for your employees, transparency is a key leadership trait. 64% of respondents ranked trust between employees and senior management in a survey as what matters most for job satisfaction and engagement.

Yet, many business leaders still undervalue transparency. Amidst the COVID-19 crisis and continued economic uncertainty, it is more important than ever before to adopt transparency as a key tenet of employee-facing business policies.

Effective leadership during and after a crisis like this requires clear and quality communication. Business transparency makes such communication possible. Strong leaders will use this to their advantage, but first, it helps to understand what business transparency looks like and how it helps workplaces.

Business Transparency Defined

Obviously, as a business, it doesn't make sense for all employees to have access to all the company's information. Interns, for example, don’t necessarily need the details on financial accounts. Business transparency, however, doesn’t mean a complete revelation of all trade secrets and financial details.

Instead, business transparency can be simply defined as openness in communication between employers and employees regarding policy and decision-making. This simple quality can have a huge impact on employee engagement and success.

In planning your transparent approach to business leadership, it is helpful to remember that transparency is a means to greater and more effective leadership potential. New company policies, especially on a corporate level, tend to get passed down the chain with little transparency or communication involved. As many as 52% of workers say their own company struggles in providing up-front and open communication with them.

But no one likes to follow rules they don't understand. Lack of clear communication leads to distrust. In many cases, employees even quit because of frustrations with their superiors and the way they communicate. Sometimes all it takes to make a difference is a clear memo and accessible communication channels.

In the wake of the coronavirus pandemic, we see the value of transparency in leadership even more closely. Since all kinds of businesses suddenly had to transition their processes, unclear communication has had negative effects on some businesses as employees struggled to effectively adapt.

At the same time, businesses that communicated a continuity plan with employees from the start and were receptive to ideas had the easiest time managing pandemic concerns. Even in instances where this meant layoffs, transparency and quality communication gave these workers more time to seek out the unemployment benefits they were often entitled to.

But this kind of transparency has more long-term benefits that will extend long past the pandemic.

The Benefits of Managerial Transparency

The management style you adopt can have a significant impact on the growth of your organization. Transparency can help ensure that that impact is a positive one.

The data is clear when it comes to clear and empathetic communication between employees and management. Employees in these circumstances have higher retention rates and levels of productivity. These factors can even mean all the difference when it comes to financially surviving crises like COVID-19.

Here are just some of the statistics regarding the importance of transparency in business management:

• Transparency is the number-one factor in employee happiness.
• 57% of employees left a job because of a manager.
• 94% of customers are likely to be loyal to a company that offers complete transparency.
• 39% of customers would switch to a brand that offers greater transparency.
• 73% of customers will pay more for products from transparent brands.

With potentials like these, it is no wonder why strong leaders always put a focus on promoting business transparency. Clear and open communication with employees invites collaboration and innovation. At the same time, a willingness to explain thought processes behind decisions and policies is a huge factor in establishing employee trust.

Since trust and communication are so valuable to employee engagement and success, transparency should not be an overlooked aspect of leadership. But what exactly does business transparency look like, and how can leaders cultivate it?

Building Success Through Transparent Leadership

With so much potential available through transparent communication alone, it should be every leader's priority to build transparency into their processes. There are several ways this can be achieved. From highly promoted value statements to open-door policies, transparent leadership is effective and achievable.

One radical example is the social media scheduling company Buffer’s approach to pay scales. Buffer keeps the salaries of all its employees on a public spreadsheet along with a formula that describes exactly why each worker makes what they do. The company claims this keeps employee frustrations low while also offering employees something to strive for, leading to greater productivity.

While you still might want to keep salary information private in your own business, you can still create a culture of transparency through a few simple actions. These include:

• Clarify transparency as a core value of your business and promote these values in company culture.
• Share all information about changes with employees upfront.
• Engage in honest and open negotiations with employees.
• Maintain an empathetic approach to leadership.
• Explain decisions through data and clear communication.

By engaging in simple practices like these, you can demonstrate a greater commitment to your employees and customers. Doing so can also actively prevent many toxic behaviors from occurring. As demonstrated, this can offer business benefits like greater productivity and employee retention. These qualities matter even more as the world still reels from the coronavirus pandemic.

Final Thoughts

Facing a lack of certainty in the larger economy, employees deserve a transparent workplace and clear communication from their employers. This does not have to mean complete visibility of financial data; even revealing data analytics that points towards the reasoning of a specific change can be enough to generate trust and respect.

As business policies continue to shift in the course of a pandemic-stricken economy, negotiating employee needs like remote work accommodations will require a dedication to transparent communication. Businesses need transparency and empathy to thrive as they accommodate new standards of normal. As a result, strong leaders are promoting business transparency and reaping the rewards that follow.

To become a more innovative leader, you can begin by taking our free leadership assessments and then enrolling in our online leadership development program.

Check out the companion interview and past episodes of Innovating Leadership, Co-creating Our Future, via iTunes, TuneIn, Stitcher, Spotify, Amazon Music, Audible, iHeartRADIO, and NPR One. Stay up-to-date on new shows airing by following the Innovative Leadership Institute LinkedIn.

About the Author

Jori Hamilton is an experienced writer residing in the Northwestern U.S. Her areas of expertise and topics she typically covers revolve around business leadership, ethics, and psychology. To learn more about Jori, you can follow her on Twitter: @HamiltonJori

RESOURCES:

The 2021 inaugural ILA Healthcare Leadership Conference will occur virtually, live online 17-18 May 2021. The conference theme is Strengthening Ties Between Healthcare and Leadership. The conference will bring together both healthcare and leadership experts covering foundational and cutting-edge topics that are relevant for healthcare professionals (practitioners, educators, and scholars) to optimize leader development, leadership education, research, practice, and networking. Each day of the conference will begin with a keynote address followed by panel discussions and interactive sessions. Click the link below for more information or to register.

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