Communication Lightbulb: Leadership Transparency Builds Trust

by | Dec 12, 2023

Business leadership transparency is an approach to organisational communication that is characterised by the candid sharing of information, insight into decision-making processes, and conveying high-level issues that affect employees and other key stakeholders within an organisation.

Transparent leaders foster a company culture that values a free-flowing exchange of ideas, empowers the entire team to make well-informed decisions, and provides greater opportunity for teams to be more innovative and better contributors to the success of the business.

A recent employment study reports that 40% of managers believe their leaders are very transparent, but only 22% of lower-level employees feel the same. And according to Deloitte, 60% of businesses worry about how their employees perceive their leadership transparency levels.

If leadership transparency is so important, why do so many businesses struggle with it? The answer likely boils down to aging leadership models that are more concerned with control than with building a culture of trust, respect, and collaboration. And breaking from tradition can be challenging, even for new business leaders.

Why So Secret?

Even the most guarded business leaders likely aren’t keeping information close to the vest for nefarious reasons. Instead, they may fear vulnerability, have an overzealous desire for authority, or may possess concerns about how information could be interpreted by the masses. Particularly in highly competitive industries, business leaders might have very valid concerns about competitors capitalising on their internal information.

But for the most part, poor leadership transparency is a strong symptom of an organisation that struggles with communication on multiple levels. It is also one of the leading barriers to a company culture based on respect, accountability, and innovation. Even high-performing employees feel kneecapped by a leadership system devoid of transparency.

Of course, there will always be issues that might not be appropriate for widespread organisational consumption. Part of effective leadership is being able to identify those situations and tend to them as the exception rather than the rule.

It’s a Matter of Respect

While employees might not share the same high level of commitment as a business owner or leadership team, they do have a vested personal interest in the success of the company. It is important business owners appreciate that employees aren’t just cogs in their operational machine and that their teams are generally devoted to the organisation’s culture and wellbeing. Beyond compensation, they are emotionally invested in the success of the company.

By evolving into a more transparent leadership model, business leaders demonstrate to their teams that they both respect and trust them with information – good or bad – that is vital to the business.

7 Ways to Foster Transparency in Your Business

1. Create Strong Communication Channels: Implement open communication opportunities in a variety of ways. These might include one-on-one check-ins, town hall meetings, internal newsletters, and open-door policies.

2. Share Your Goals & Vision: Your entire team should understand and align with your short-term goals and your long-term vision for the business.

3. Financial Transparency: This is a tough one for a lot of leaders. Sharing financial information may be uncomfortable, but doing so builds trust. It also seems only fair to let your team know the financial health of the business.

4. Take Ownership of Mistakes: Even the best business leaders make blunders. By admitting to errors, business owners reinforce a culture of accountability and continuous improvement.

5. Seek Input on Decisions: No doubt, your employees have opinions about a multitude of issues surrounding the business. Offer them opportunities to weigh in on threats or solutions. It will empower your people and create more opportunities for innovation.

6. Keep Them Updated: Your team shouldn’t have to guess or be left in the dark about impending changes or challenges. Instead, maintain a policy of continual updates on the things that matter to them.

7. Celebrate Achievements: Recognising individual and team contributions, for both big and small wins, helps create a positive culture of achievement. Acknowledging accomplishments lets your employees know that their efforts are being seen and heard by leadership and the entire team.

If you are interested in implementing a more transparent approach to leadership, start by reaching out to individuals on your team. They will surely be a great barometer of where you stand now with transparency and where you want to go. The act of including your employees from the onset of your transition to transparency underscores how much you value their opinions and how willing you are to listen. And that is a meaningful starting point.