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The Power of Transparency

Published Thursday May 2, 2019

Author Amy Cann

The Power of Transparency

Nature abhors a vacuum and, it turns out, so does company culture. When employees don’t have information, the office rumor mill will fill that communication vacuum. It’s why business owners and senior leaders should practice organizational transparency whenever possible. As scary as it may sound, it is better to share as much information as possible—both positive and negative—across all levels.

Transparency builds trust, inspires confidence, and conveys respect for employees. It is inclusive by nature and encourages the sharing of ideas, perspectives, and solutions. The more workers know about the organization’s strategy, performance, and problems, the more they can make the best decisions in their jobs and provide suggestions for continuous improvement.

When leaders are honest and open, they model transparency and encourage it in others, too. The more comfortable everyone is with open communication, the faster the organization can become aware of areas of concern and develop solutions and plan.  

If employees see management routinely ignoring their input, they may not share critical information when it occurs, such as complaints from customers about a new shipping process. A company that develops such a process quietly and without input may not be aware of potential flaws. If employees are not forthcoming with information, it may take the loss of a major client for management to discover that flaw.

Engaging Employees
To be successful, companies need to  discuss business strategies with employees as successes and challenges. Tell staff about an upcoming change in organizational structure and explain why the change is occurring. Be sure to provide an opportunity for employees to ask questions, exchange ideas, and provide suggestions.  

A Harvard Business Review survey found that 70 percent of employees are more engaged when they have a clear understanding of how their job contributes to strategy and receive regular updates and effective communication from senior leadership. When employees know how their job can positively affect the organization’s success, they feel they are part of a team rather than being spectators, and want to contribute to the company’s success.

The Risks
Being transparent, inclusive, and proactive, however, does have inherent risks. Leaders could share information that employees are not prepared or able to process, or someone could try to use that candor against the company to create tension or fear. Leaders could overpromise during the information stage and underdeliver results. If this happens, learn from the experience and press on with the same spirit of transparency.

Despite the potential perils of open communication, it is far better than the alternative. Withholding knowledge creates exclusion, misalignment, doubt, apprehension, and distrust, which all contribute to an undesirable culture. Additionally, companies risk the possibility of not making the best organizational decisions due to lack of information and insights as well as the workforce’s lack of buy-in, understanding, and support.

Controlling the Narrative
Keep two key points in mind to make transparency work:

• When people do not know the story, they make it up. It is an unpredictable time with the U.S. economy, the political system, and global events. There have already been significant business announcements this year, including closures and mergers across the country. When employees do not have information to make informed conclusions, some believe the worst and fan the flame of gossip and conjecture.

When an employee is contemplating leaving, it is often due to a belief that management does not value their job and individual contribution. Communication is an opportunity for an organization to take control of the narrative, involve employees in a shared story, and retain talented workers.  

• Transparency waits for no one.  Whether a company chooses to be transparent or not, former and current employees are free to share their thoughts about it, pay, benefits, and working conditions. The National Labor Relations Act of 1935 gives employees the right to act together to improve their pay and working conditions, with or without a union, which includes sharing this information on social media.

New Hampshire state law, as in most states, allows employees to freely discuss their pay and benefits without fear of reprisal. Major job boards like and encourage employees to anonymously rate companies and comment on management, pay, and the benefits and the disadvantages of working there.

It is essential to be proactive, explain decisions, listen to feedback, and be employee-centered in your organization. There will always be times when information must be kept confidential, such as sensitive financial information and HR-related details, but those instances should be the exception and not the rule.

As George Bernard Shaw said, “The single biggest problem in communication is the illusion that it has taken place.”

Amy Cann is principal of Human Resources ROI LLC, an HR services firm in Gonic. She has 20 years of HR experience and can be reached at 603-978-2958,, or

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