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The Power of Transparent Leadership

The Power of Transparent Leadership

They say that the best disinfectant is sunlight, and I’m a huge believer in that principle. If my direct reports in corporate heard it once they heard it a thousand times: transparency is everything. 

When there’s any bad behavior behind closed doors, bringing it into the light and dealing with it appropriately is critical to forming a culture of integrity. Without it, you can say whatever you want about integrity being important to you, but you’d be full of sh!t. 

Having said that, just how much transparency should you bring to your people? There are two very important relationships to consider:

  1. The relationship between transparency and accountability 

If you want people to take accountability for their deliverables, they need to be fully informed and they need to be able to access all the information that’s relevant to what they’re being asked to do.

I often see issues where people are held to account for the success or failure of their deliverables, and then they’re kept in the dark about certain aspects that would greatly affect their context.

On the other hand, sometimes too much information is spread too widely, and that can undermine an accountable person’s mandate. That’s just dumb, so don’t do it to your people.

  1. The relationship between transparency and trust 

This one’s even more important. If you want people to trust you, you can’t hide critical information from them. If they feel as though you aren’t open and transparent, there’s going to be a barrier of suspicion between you and them.

You’ll never get the most out of them, and leading them is going to be really difficult. So always think about how much transparency is appropriate in order to win the trust of your people. 

There are some trickier aspects to transparency, areas that aren’t quite so obvious. What if you own a private company? You’re under no obligation whatsoever to disclose any financial details to your people. 

As a KMP in corporate, I was used to having my remuneration details splashed all over the annual report for the whole world to see. But in a private company, do I want my people to have access to the numbers? 

I know many really successful business owners who are secretive, almost to the point of paranoia, about their financials. I know others who are quite happy for their people to see everything. 

Let’s face it, if you own a company, it’s your capital at risk and it’s no one’s business, but yours, how much you make. But there’s also the issue of motivating your people. 

If they know your company’s doing really well, will they feel hard done by because they think they’re not being paid enough? Is it actually better to let them see the reality of the company’s performance? Not just the revenue, but the cost of running the business and the investment required to grow it successfully? 

Sometimes P&L transparency can be pretty useful.

I wrote an article on this subject for Harvard Business Review earlier this year, which is worth a read. It’s titled How Transparent Should You Be With Your Team?

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