What Are the Limits of Transparency?
Summing Up: What's the proper balance in an organization between transparency and opaqueness? Many of Jim Heskett's readers would err on the side of management forthrightness.
What Is Transparency's "Sweet Spot"?
We generally think of transparency as an admirable organization quality. But commenting on this month's column, Kapil Kumar Sopory summed up a lot of the thinking with the observation that "excess of everything is bad." That apparently includes transparency. The question of course is, "How much is too much?"
There were those who would set what might be regarded as relatively narrow limits on the practice. For example, Traci Li said, "Transparency should be limited in non-public institutions." Ashok Panda suggested that we "share only data, not information among employees/colleagues."
Just where we draw the line on information was the subject of many comments. As Carl put it, "transparency protocols should follow a distinct process matrix to ensure that the appropriate amount of information is delivered." One possible line would include information about a company's strategy. Brad Keller commented that "It takes more than just sharing financials or performance review data… It is really a matter of being open about an organization's intentions and strategies for achieving those intentions. People establish relationships with institutions they trust …."
Gerald Nanninga, in observing that we overdo caution, asked, "How can you expect people to implement the strategy if they don't know what it is?" He continued: "And great strategy should be so entwined into your unique business model that competitors wouldn't be able to readily implement it even if they knew what it was." Khadija Khan suggested that we let the recipient decide, saying that "There is really no need for whistle blowers if the responsible organizations including government organizations disclose information to general public without reservations and let them make use of the one relevant to them."
Walter Blass was among those who would err on the side of more transparency, arguing that "the more that is shared, the higher the likelihood that discretion will be maintained." Phillip Clark weighed in with this view: "Wisdom and trust determine transparency. The comfort and motives you sense from those providing the information determines how much you will believe… Transparency is doomed by paranoia and distrust. That in turn opens the gates for rumors, 'whistle blowing' and reactions counter to the benefit to an organization …" Malabika Debnath opined that "I believe we are gradually as a society moving towards a higher level of comfort with openness as we trade off various levels of privacy for its benefits."
Tom Dolembo cautioned us not to expect too much from a policy of transparency, saying "If the company culture operates better within the founder's vision of transparency, all well and good, be transparent. But to trust transparency alone to engender trust in management and cooperation is a pipe dream."
So where does that leave us? What are the appropriate criteria on which to determine the limits of transparency? What is transparency's "sweet spot." What do you think?
Transparency has become a popular concept in management circles in recent years, no matter how little enthusiasm you may have for the word itself. Now the topic has been thrust into our everyday lives with disclosures, or leaks, of alleged US secret intelligence information by Edward Snowdon. Increasingly, we are asking ourselves "How much transparency is the right amount?"
Transparency is given credit for fostering trust among members of an organization, building loyalty among employees, and generally creating better places to work. For many years we observed need-to-know policies (that may have had their origins in the military) among managers of leading organizations. This slowly evolved in some organizations into policies that gave employees much more information about the activities of the enterprise and more voice in determining what they felt they needed to know.
Vineet Nayar, vice chairman and joint managing director of HCL Technologies, an India-based information technology services company, has been one of the most outspoken advocates of increased transparency. He says all HCL's financial information is on the company's internal Web. "We are completely open," he had been quoted as saying. "We put all the dirty linen on the table, and we answer everyone's questions. We inverted the pyramid of the organization and made reverse accountability a reality."
That's not all. Nayar makes his own 360-degree feedback open to 50,000 employees, and 3,800 managers participate in an open 360-degree process. "We started having people make their presentations and record them for our internal Web site. We open that for review to a 360-degree workshop.… What happened? … You cannot lie … You are going to put your best work into it …."
This policy may not be appropriate for all organizations. It has to be aligned with a number of other policies and practices. For one thing, it may repel capable managers who would prefer not to work in a high-transparency environment. Transparency makes some people uncomfortable, although this appears to be more a generational issue. Surveys have shown that younger people have little or no interest in the Snowden affair. They assume that much of what they do will become public knowledge regardless of any efforts to keep it secret.
The late Harlan Cleveland predicted much of this more than 30 years ago when he noted that information is different than material things in that it can be shared, can't be hoarded, and leaks prolifically and naturally. As he put it then: "The information resource … is different in kind from other resources. So it has to be a mistake to carry over uncritically to the management of information those concepts that have proven so useful during the centuries when things were the dominant resources and prime objects of commerce, politics, and prestige."
So as leaders and managers, how much do we share? How do we avoid sharing competitively sensitive (comparable to the government's "top secret") information too widely? If we operate on a need-to-know policy, who decides what employees need to know? What are the limits of transparency? What do you think?
To read more:
Adam Bryant, "He's Not Bill Gates, or Fred Astaire," The New York Times, February 14, 2010, p. B2 (for the Nayar quote).
Harlan Cleveland, "Information as a Resource," The Futurist, December, 1982, p. 37 (for the Cleveland quote).
Vineet Nayar, Employees First, Customers Second: Turning Conventional Management Upside Down (Boston: Harvard Business Press, 2010)