Committing to a collaborative business culture requires the abandonment of relics from yesteryear, like rigid departmental silos that keep team members in the dark about what’s happening on other teams—or sometimes even what’s happening in different areas of their own team. Traditionally, these silos also separate management from the huddled masses.
In today’s forward-thinking businesses, these barriers are quickly breaking down. But is there actually a benefit behind this newfound transparency? Is there a price tag? In a new article, Danny Wong considers the risk and reward, drawing on the experiences of transparency pioneers like Buffer, as well as interviews with Allan Schweyer of the Human Capital Institute, Brian Scudamore of 1-800-GOT-JUNK? and Nancy S. Ahlrichs of FlashPoint.
The following post originally appeared on the Central Desktop blog.
Transparency boosts job satisfaction, engages employees and increases productivity
Average workers know little more than their own salaries and (possibly) the amount of revenue they generate. Critical financial metrics such as cost of goods sold, overhead costs and marketing spend might be lost to them. Although they may be able to guess those figures, this type of ambiguity produces a harmful knowledge gap which impedes employees’ ability to create real change within an organization and feel fulfilled at their jobs.
In any given company, engineers might not be entirely familiar with what their colleagues in marketing or sales are working on. Sometimes, department-level planning happens without any input from junior team members. Often, the consequence of this company-wide lack of communication is an unhappy and disengaged workforce delivering subpar performance.
For these reasons, companies such as Buffer and Hanno decided to hide nothing behind closed doors; Buffer openly publishes information about costs, revenue and salaries, while Hanno documents and discloses everything about how the firm works with clients, current employees and new hires. These brands have not only built better relationships with their workers, but they also earned the trust of customers, external partners and investors.
As the business landscape evolves, companies will need to practice greater transparency in order to grow and thrive.
The ROI of information sharing
According to Allan Schweyer of the Human Capital Institute, “The cost of employee disengagement is profound. In the aggregate, employee disengagement is estimated to cost the US economy as much as 350 billion dollars per year in lost productivity, accidents, theft and turnover.” Businesses bleed when they withhold information from team members.
Schweyer adds, “For organizations, the difference between an engaged and disengaged workforce can ultimately mean success or failure. At the individual level, engagement at work influences all aspects of an employee’s life and those that are close to him or her.” Keeping employees apprised of company news empowers them to make important decisions that may help their employer achieve ambitious goals and overcome current challenges.
In 2013, TINYpulse produced and published a survey to understand “how employees feel about their organizations’ culture, management, recognition, and their fellow co-workers.” More than 300 global organizations participated, contributing 40,000 anonymous responses. The results revealed, “Management transparency is the top factor when determining employee happiness.” Yet despite its low cost, businesses are still hesitant to open up their books.
Reluctant executives ought to realize that transparency goes both ways. Nancy S. Ahlrichs, an HR consultant with FlashPoint, a global talent management consulting firm, says, “Management must give information to get information. Otherwise, employees will not alert management when issues are small and emerging, and instead let management stumble upon large issues. Withholding information by either party considerably complicates day-to-day operations, increases costs, and lowers employee engagement.” Having a two-way street of communication will eliminate confusion, errors and unnecessary overlap.
How a routine meeting can change everything
“Transparency is key to keeping employees motivated and happy, and works especially well when combined with a tangible reward,” says entrepreneur Brian Scudamore.
As the founder and CEO of 1-800-GOT-JUNK?, Scudamore ensures his team receives a report of company financials during the firm’s daily, all-hands meeting. Scudamore says, “Numbers are made public to all employees on the company’s intranet, and it’s made clear that staff can ask questions about how business is going.” During each seven-minute gathering, 1-800-GOT-JUNK? staff have the opportunity to introduce innovative ideas, review goals and share news — good or bad. In under seven minutes each day, employees gain insight into the company’s overall performance, as well as progress within each department. The most engaged workers leverage this information to adjust their action plans to further bolster growth.
Of course, money talks. “The most rewarding part of this transparency, however, is the profit sharing program,” Scudamore says. “[Employees’ bonuses are] based on the company’s success in reaching revenue targets, and staff always knows if they’re on track to do that. If the company succeeds, employees benefit directly; it’s a huge motivator for staff, who not only want to reach goals, but smash through them.” When team members’ goals are aligned, their overall performance skyrockets.
Embracing transparency may seem daunting—and what’s transformative for one company may be folly for another—but clearly employees are expecting visibility rather than smoke and mirrors.
There are numerous ways to proceed. As Brian Scudamore says, even a very quick daily meeting can have a major impact. In a recent product case study, we learned how a successful marketing company uses Central Desktop to enhance transparency and emphasize shared (rather than siloed) team goals—which the company credits for driving a significant gain in net income.
How has your own company’s perspective on transparency shifted? Do you think that an employer can be too transparent? We’d love to hear about your experiences.
If you’d like to learn ways to help your whole team boost productivity and improve collaboration, check out PGi’s free eBook, Teamwork Makes the Dream Work.