Companies all over the world have striven for transparency in the workplace, literally tearing down walls in an effort to let managers and employees observe each other. Take, for example, one of the 14 key principles of The Toyota Way, Toyota Motor Corp.'s managerial philosophy: "Use visual control so no problems are hidden."
But recent research proves the virtue of letting employees do at least some work unobserved. In a series of studies, Harvard Business School Assistant Professor Ethan S. Bernstein shows that decreasing the observation of employees can increase their productivity.
“What managers were seeing wasn't real. It was a show being put on for an audience”
What's more, in a curious phenomenon dubbed the Transparency Paradox, he finds that watching your employees less closely at work might yield more transparency at your organization.
Bernstein uncovered the paradox while studying the manufacturing floor at a leading, technologically advanced global contract manufacturer's plant in Southern China, where tens of thousands of workers assembled mobile devices under close supervision. The plant for years had operated myriad identical assembly lines, spaced closely together to facilitate visibility. The idea was that watching the workers would help managers improve operations and replicate innovations on one line across others, thus increasing productivity and driving down production costs.
A research team found the opposite was true.
What Managers Saw Wasn't Real
In the summers of 2008 and 2009, when he was a doctoral candidate at HBS, Bernstein hired a team of five Chinese-born Harvard undergraduates to be "embeds" at the plant. They lived in factory dorms and worked alongside employees, who assumed that the embedded students were actual employees, too.
During the first summer, the embeds quickly discovered the crux of the transparency problem, which Bernstein recalls in his paper The Transparency Paradox: A Role for Privacy in Organizational Learning and Operational Control, which won the 2013 Best Published Paper Award from both the Academy of Management's Organization and Management Theory Division and Organizational Behavior Division. "First the embeds were quietly shown 'better ways' of accomplishing tasks by their peers-a 'ton of little tricks' that 'kept production going' or enabled 'faster, easier, and/or safer production,' " he writes. "Then they were told 'whenever the [customers/managers/leaders] come around, don't do that, because they'll get mad.' "
Rather, veterans advised embeds to perform tasks strictly by the book whenever a manager was in sight, in order to avoid calling attention to themselves. As such, the researchers noticed that production seemed to slow down whenever the employees knew they were being watched. The level of workplace transparency meant that just as managers could see their employees more easily, the reverse was true as well.
The official company practices happened to be less effective than the tribal tricks of the trade—tricks that the employees hid from the higher-ups, thus thwarting the goal of learning by observing. Bernstein says that there was no ill-intent or cheating behind such hiding behavior, but merely a rational calculation about human behavior: Operators were hiding their freshest, most innovative techniques from management so as not to "bear the cost of explaining better ways of doing things to others."
In the paper he recalls a worker telling an embed, "Even if we had the time to explain, and they had the time to listen, it wouldn't be as efficient as just solving the problem now and then discussing it later. Because there is so much variation, we need to fix first, explain later."
Said another worker: "Everyone is happy: Management sees what they want to see, and we meet our production quantity and quality targets."
"We assume that when we can see something, we understand it better," Bernstein says. "In this particular environment, and perhaps many others, what managers were seeing wasn't real. It was a show being put on for an audience. When the audience was gone, the real show went on, and that show was more productive."
Similar results bore out in a follow-up quantitative field study at the same site the following summer, this time tracking the production of 3G USB mobile data cards. The research team studied 32 production lines for five months. On one set of randomly chosen lines, the employees worked out in the open, as they always had. On another set of lines, however, each production line was concealed behind a curtain, out of management's view. The researchers found that simply hanging that curtain increased production by 10 to 15 percent—major information for a competitive industry that operates on razor-thin margins.
In terms of respecting boundaries, it's important that managers consider not only individual privacy but group privacy as well, Bernstein explains. The curtain boosted productivity for a few key reasons: It provided privacy to tweak (and improve) line operations as temporary issues arose; it prevented unproductive distractions and provided workers with increased focus; and it let the line experiment with new ideas prior to explaining them to management. Indeed, the workers did purposefully share ideas with their supervisors after testing and perfecting them.
"There was a pride in ownership leading to the desire to share," Bernstein says. "And so they did. But only after they had data to support their new approach."
Hence, the transparency paradox: broad visibility of employees at work may induce secretive behavior, thus reducing real transparency, whereas boundaries may actually increase it.
“This race to full observability on everything can have consequences.”
Bernstein hastens to add that not every company should erect walls or hang curtains. "I would never suggest that what works in one setting is necessarily going to work the same way in another," he says. "The message actually that's more important to me, which should be more important to managers, too, is that this race to full observability of everything can have unintended consequences."
Trying Not To Look Too Weird
The field study findings also offer an important message to employees—that productivity can depend largely on how well they manage their managers' attention.
"On the manufacturing floor, the workers were trying to manage the attention of the managers," Bernstein explains. "They knew that if they did something that looked weird, it would draw attention and, quite frankly, would disrupt their current work process. If they didn't look weird, then that wouldn't happen. And they knew that just for the sake of getting the production numbers, sometimes it would be good to attract attention and sometimes it wouldn't."
Bernstein elaborates on this concept in the paper "Seeing Too Much: Too Much in Sight or Too Little Insight?" The paper was chosen for inclusion in the Academy of Management's Best Paper Proceedings in September.
He explains that when a person starts paying attention to something or someone, it happens in one of two ways: executive control (that person deliberately chooses what to focus on) or attentional capture (the attention is captured by a stimulus in the person's sensory field of vision). Effective management requires a healthy balance of the two.
"Focus too much on executive control and fail to attend to the unexpected crisis in your peripheral view," Bernstein says. "Give attentional capture too much weight and you spend the entire day as a slave to your own curiosity and every little out-of-place thing around you."
At the factory, the workers were essentially "managing up" by protecting their managers, themselves, and their company from unproductive attentional capture. The findings indicate that it may behoove managers to acknowledge that when it comes to attentional capture, their employees may know best.
"Those managers who believe they can restrain themselves from becoming captured by something that looks weird—when that attention won't be productive—would likely prefer to see everything and then make a choice as to whether to attend and get involved," Bernstein says. "But maybe we aren't as good at battling curiosity or being overloaded by visual stimuli as we might think. The frontline people who perform a particular task 12 hours a day may be the best people to determine whether that task needs the attention of others.
"If you wanted to design a more productive organization," he continues, "you might actually think about actively putting the agency for attention in the hands of the people who are doing more of the frontline work."
After all, they may already be controlling your attention anyway.
Note to managers: Are you interested in finding out whether the ability to observe employees helps or hurts productivity in your organization? Ethan Bernstein is pursuing additional field studies in non-manufacturing settings. For more information, please visit The Research Exchange.