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3 Surprising Reasons to Practice Transparent Leadership at Your Organization
Gone are the days of company secrets, hyper-confidentiality, and decision-making behind closed doors. Today, employees want to work for leaders who practice openness, honesty, and inclusion—they want to work for transparent leaders.
Transparency in leadership means keeping employees in the know, sharing the good and the bad, and welcoming honest feedback. According to Sharon O’Donnell, this week’s guest on America Back to Work: Expert Interview Series, it might look like a monthly all-hands meeting where the CEO gives a status update on the health of the company or a weekly OKR email from senior leadership tracking business progress, or general openness with employees about the decision-making behind a round of layoffs.
“Is leadership doing what they say and saying what they do? That’s transparent leadership,” says O’Donnell.
While it might feel clunky and uncomfortable sometimes, especially when the news being delivered isn’t so positive, it’s often necessary to build meaningful trust with employees—that improves business outcomes.
According to a recent study from Gallup, organizations with a high degree of transparency report profit margins that are 21% higher than average, but that’s not the only key benefit. Keep reading to hear three more surprising benefits of practicing transparent leadership, according to O’Donnell.
Transparent Leadership Engages the Workforce
A recent study in Harvard Business Review shows that employees in high-trust workplaces are 76% more engaged and 29% more satisfied with their lives. Also, 70% of employees say continual updates on strategy from senior leadership are a big engagement driver.
Transparent leadership results in “reduced turnover, engaged employees, and an energized workforce,” according to O’Donnell—a critical outcome when workers are less engaged in their work than ever before (and turning over at high numbers because of it).
“I think employees who feel like they can talk to their managers and leaders in the organization without drama, without fear of misinterpretation, have faith in the company. That’s it. It just builds a much more cohesive workforce,” she adds. And a cohesive workforce—built on trust and fostered by transparency—directly correlates to higher profits.
It Connects With Younger Generations
“Gone are the days of blind employee loyalty,” says O’Donnell. “Younger generations want to know: why should I stay here?”
More than one-third of today’s workforce is Millennials, and by 2030, the number of Generation Z workers (those born from 1997 onward) is expected to triple. Recruiting and retaining top talent from these demographics requires a different approach, and part of that approach requires transparent leadership.
Gen Z employees, in particular, value salary less than every other generation, caring more about whether the work is interesting, values-aligned, and purpose-driven. Essentially, they want to know they’re working for good people who can add value to their careers, and the best way to ensure them of that is to provide a behind-the-scenes look at how the company functions and to call attention to how the company goes out of its way to support its employees.
And It Helps You Practice and Uphold Your Values
“I always go back to: is leadership doing what they say and saying what they’re doing? If they publish core values, are they holding people accountable to live up to them,” questions O’Donnell.
Transparent leadership means that the third wall has fallen—that employees have access to the company’s inner workings and an understanding of the mechanics of company decision-making. Ultimately, that means that employers can no longer get away with performative measures; it’s no longer acceptable to create a flashy employer brand with an agreeable mission and stick some values on the “About Us” section on the website without actually following through on those promises.
Transparent leadership means accepting a more difficult path forward, one with built-in accountability but one that helps employers practice and uphold their values—which, in turn, improves business outcomes. After all, data shows that empty values statements create cynical and dispirited employees, alienate customers, and undermine managerial credibility.
For more ways to leverage transparent leadership to maximize the power of your workforce, check out this week’s episode of America Back to Work.