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Creating a Culture of Transparency Published: Sunday, October 19, 2014 12:01 am By: Ramón L. Rivera, CEO

As we have found again and again, one of the dangerous ironies of leadership is that those at the top often think they know more than they do. There seems to be an inexorable filtering out of bad news that often leaves those in the highest positions with potentially disastrous information gaps. Our research, for instance, shows that the higher leaders rise, the less honest feed- back they get from followers about their leadership. Direct reports understandably hesitate to enumerate the boss’s leader ship failings. And so top leaders easily lose touch with the ways others see them and may remain poor listeners, abrasive, tuned out, or otherwise clueless about their own limitations.

When we speak of transparency and creating a culture of speaking truth, we are really talking about the free flow of information within an organization and between the organization and its many stakeholders, including the public. For any institution, the flow of information is akin to a central nervous system: the organization’s effectiveness depends on it. An organization’s capacity to compete, solve problems, innovate, meet challenges, and achieve goals varies to the degree that information flow remains healthy. That is why creating a culture of candor is so crucial, especially for the organizations of the 21st century.

For information to flow freely within an institution, people must feel free to speak openly, and leaders must welcome such openness. That is particularly true when the information in question consists of crucial but hard-to-take facts, the information that leaders may bristle at hearing—and that employees too often, and understandably, play down, disguise, or ignore.

The leaders who will thrive and whose organizations will flourish in this era of globalization and instant communication are the ones who strive to make their organizations as transparent as possible. Despite legitimate moral and legal limits on disclosure, leaders should at least aspire to a policy of “no secrets.” The first beneficiaries of such a policy are the members of the organization itself, who are in a position to act on maximum rather than restricted information.

In most organizations, hidden ground rules govern what can be said and what cannot. One key question that every leader should ask to encourage candor is this: Is it safe to bring bad news to those at the top? The first time a top executive blows up or punishes someone delivering bad news, a norm is estabished. Everyone quickly realizes that it is folly to speak unwanted truth to power, no matter how crucial the information may be. Leaders must show that speaking up is not just safe but mandatory, and that no information of substance is out of bounds. It is not always easy for even the most confident leaders to embrace hard truths, especially when someone who is neither a friend nor a trusted colleague is the messenger. But failing to hear critical information, whoever delivers it, may put the entire enterprise at risk.

When as adults we join an organization, we bring our earlier learning about how to be part of a family into the “corporate family.” Without anyone having to explicitly tell us how things are, we automatically learn what to notice and what to think and say about it. We also learn what to ignore— and we already know from childhood not to speak about the things we know not to notice. The fears in work life echo those from family life: if we speak the unspeakable, we may threaten the organization itself, or risk expulsion. Everyone in an organization has experience in keeping secrets—for better or for worse.

A universal problem is that when staffs speak to their leader, the very nature of the message tends to change. The message is likely to be spun, softened, and colored in ways calculated to make it more acceptable to the person in power. In order to continue to receive reliable information, those in power must be aware that whatever they hear from their direct reports has probably been heavily edited, if only to make the message more palatable and to make the messenger appear more valuable. So, wise leaders find ways to get information raw. They solicit and embrace the bad news as well as the good.

But more positive forces are at work here, too. Pride in belonging to a high-performing or high-status group and the cozy sense of belonging to a tight-knit organizational “family” can be genuine sources of professional satisfaction. The paradox is that there is a dark side to belonging—the almost reflexive temptation to spin information in ways that protect the group’s shared pride, to make the group look better than it really is, or even simply to preserve the group. All these make it easier for group members to suppress information or distort it.

In the world of work, conspiracies of silence are enormously damaging and all but universal. We have all worked in places where no one addressed the problem that everyone knew about: the office bully no one confronts; the budget games, where people skew numbers and exaggerate expectations; the board of directors that tacitly suppresses dissent to support a charismatic CEO; the arrogant doctor who makes mistakes nurses see but are afraid to point out.

Before an organization can develop a culture of transparency, it must examine the cultural rules that currently govern it. Such cultural rules run deep, and they typically resist change. The best way for leaders to start information flowing freely in their organizations is to set a good example. They must accept, even welcome, unsettling information. If leaders regularly demonstrate that they want to hear more than incessant happy talk, and praise those with the courage to articulate unpleasant truths, then the norm will begin to shift toward transparency.


 

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