Let me scope out for you what “transparency” actually is. We’ve dealt with thousands of CEOs worldwide, and they almost universally think that transparency requires much more disclosure than it actually does.
That’s because we mostly read about extreme examples. Whole Foods, as you probably know, publishes everyone’s salary in its financial report. Buffer, a 65-employee marketing company, publishes them on its website. Is that transparency? Many executives just ping off of stories like those and decide that they’re not ready for it.
But that’s not what transparency really is. It’s not full disclosure – not even close. You don’t have to share information you consider private. You certainly don’t need to start with something that makes you uncomfortable.
You can ease into it. You can calibrate where you land. But only if you know where to start.
If you think about transparency from your employee’s point of view, you’ll get the idea. Deloitte found that leaders “often believe they can ‘manage the truth’ through PR, communications specialists, or timed release of information. Today this typically fails, and people immediately see the deception.”
From your team’s point of view, especially the Millennials who will be the majority of our workforce in a few years, deceptions of any kind are huge red flags. Deception causes disengagement. People simply don’t want to work in that sort of environment.
Sure, all of them sometime daydream about other people’s income or your profit taking. But most of the time what they really want to know is, “How’s the business doing? Are we stable? Is my job safe?”
They want to know how well their team is doing. Above all else, they want to know how well they are doing. They want to know that they and their team are among the reasons why things are stable and safe.
They also want to know how well other teams are doing. They want to know which ones are helping keep things stable and safe. And what’s most interesting about addressing this need is that when people know how well other teams are doing, they start thinking about how their work interlocks with theirs. They start seeing how the parts fit together.
Only then can they chill out and enter “the flow.” Getting them there is the ultimate purpose of transparency.
You want them to think, “I know what I’m supposed to contribute. I know what my team’s supposed to contribute. I know one or two top-level things about other teams and how well they’re contributing. Now, I can feel confident in the business. I can think clearly. I can apply my intelligence and creativity to doing things better. I can smile at the customer and truly take care of them.”
As you can see, you get those benefits from a limited amount of data. It might be more than you’re accustomed to sharing, but it’s nowhere near putting everyone’s pay on your website. One to three metrics per department will explain everything necessary to the rest of the company. Share those metrics properly at your all-hands meetings, and you’ve achieved transparency.
Making even this transition can still be difficult, but it’s worth it. One of our clients, David Lowry, is the cofounder and Chief Strategy officer of the North American sports and social league CLUBWAKA, which generates USD$10 million in revenue, spans forty cities, and is growing like wildfire. “Transparency is very hard...to accept at the beginning,” he said. “But now it’s become normal, and it’s OK. It’s not just an upper management thing.”
Transparency helped him align his employees, many of whom are Millennials and all of whom work remotely. It also helped him teach his team how the business worked. Lowry needed them to be more financially literate so they could make better decisions in the field.
That helped them understand their personal metrics in the context of business success. It’s also the polar opposite of deception, and Lowry’s a great example of a business leader who’s proven what Deloitte discovered: “Among Millennials, transparency from leadership rates as among the most important drivers of company loyalty.”
The best way to be authentic is to base your management in objective metrics, (often called Key Performance Indicators or KPIs) and to measure progress and effectiveness in a perfectly – you guessed it – transparent way. That’s the only data you need to share.