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Transparency: A weighty affair

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June 13, 2016 - I recently met a friend who moved to an Indian city, Bengaluru (aka Bangalore) because of a job change. He was sharing how he chanced upon this job and got through. During our discussion, I was silently reminiscing how it used to be in the 90s when you would usually walk in to submit your resume and endlessly wait to hear from a recruiter about whom you had little information. Many of us who started our careers in the 90s will agree that applying for a job brings a different experience now. Today, the way the recruiters leverage technology at each stage to practice a transparent recruiting process is not only commendable but very much a necessity.

As we all have experienced at some point, technology and cultural shift are leading to the practice of a higher level of transparency in every sphere: business, nonprofits, politics, and media. Though transparency may have different connotations for each of these entities, it essentially aims at operating in such a way that people can clearly see what actions are performed. In a nutshell, it is about honestly and openly expressing what actions are taken, why they are taken, and by whom they are taken.

Transparency is enabling people to have comfortable conversations, where they are encouraged to ask questions and are responded to with open and honest answers that lead to trust and confidence. Not only does it help build a platform for people to make their ideas visible to others, but it also focuses on removing obstacles that prevent people from accessing the information they need to be better at their jobs.

To put it simply, transparency helps build a culture of openness, communication, accountability, and productivity. At the same time, it provides policies and guidelines on the disclosure of the information to the intended recipient. A word of caution here! That transparency is never about sharing classified information or intellectual property.

Need for transparency
So what makes transparency so important from an organizational perspective? As we all know, an organization and its stakeholders — employee, shareholders, customers, and suppliers — exist in a symbiotic relationship. An organization's actions and decisions have an impact on all of its stakeholders. So, to make it a successful and trusted relationship, the organization must have the confidence of its stakeholders. And, to implement this, the organization must practice transparency — that is, enable visibility into its functions for its people. The best way to achieve this is by institutionalizing transparency into organizational processes while conducting business, recruiting, promoting, compensating employees, or keeping accounts. Conducting business with the utmost transparency is a necessity for every business. If a business lacks transparency, it is bound to fail to attract good investments and talent.

Being in HR, I insist on practicing complete transparency in all HR policies and processes. You will notice that most successful organizations implement transparent recruiting policies to avoid nepotism and ensure fair recruitment practice. This is imperative as it affects the trust and confidence in the system of employees as well as prospective employees. In addition, to keep employees motivated, we must have transparent and comprehensive progression, promotion, and benefit policies as well. In fact, it is mandatory to clearly state the policies and standard remuneration for certain positions.

In today's scenario, the shifting focus on the need for transparency is more important than ever as the avenues for accessing information are huge. So, there is this constant, increasing pressure on organizations to function with transparency for building and retaining a positive brand image.

Well, if you think about it, you will be convinced that transparency is not only good for organizations but also the right thing to do. Organizations with transparency overcome difficult situations easily since employees can relate to the bigger financial picture, are motivated and creative, and can contribute to the organization's stability.

Organizational changes and transparency
Organizations undergo changes to meet business needs or accommodate new business requirements. In such situations, whatever may be the level of changes, it is always not possible to maintain complete transparency while dealing with stakeholders or the public in general. As you can understand, certain information is barred from being shared openly due to regulatory reasons or to protect the organization's interest from its competitors. In such situations, honest and timely communication to employees builds trust and curbs negativity. Very often, concealing a change leads to lack of stability within the organization, and eventually organizations find it difficult to deal with such changes. However, communicating with transparency is the only possible solution when dealing with such situations.

How to improve transparency?
If we have understood it correctly so far, the need for transparency is undoubtedly the need of the hour. So, what can happen in cases in which there is a complete lack of transparency, or little transparency? How do you know that your organization is lacking transparency or is a not-so-transparent organization? Watch out for these symptoms: bad decision making, lack of innovation and creativity, duplicate work, and an unstable and unproductive work environment. Besides leading to these issues, lack of transparency may, in turn, affect the organization's performance and image severely.

In an organizational context, the primary aspects of transparency are information disclosure, clarity, and accuracy. To increase transparency, an organization needs to incorporate these aspects into their communications with their people. You may then ask: why should an organization strive to increase transparency?

In today's world, everyone has access to huge repositories of information. But, most information is not received well. In other words, most people do not act upon certain information since they doubt its authenticity. And an organization's chances of success are better only when its people act on valid information. People respond to a piece of information only when they find the source of the information to be valid—which is available through a transparent system.

Lack of transparency also prevents knowledge sharing. Different units within an organization are unaware of the skills and talents that are available within their surroundings. Also, it may encourage people to do unethical things.

So, that brings us to the critical question: what specific measures should an organization take to increase transparency?

Clearly, it should begin at the top. An organization should take a top-down approach, i.e., ensure that the top leadership has a consistent view of the external environment and the organization's goals. Since the information flows downward, any mayhem at the top may affect hundreds of people — more so in the case of a big organization. Alignment of middle management's view with their seniors can go a long way in enhancing transparency. Most of the time, the middle managers lack the same understanding about an issue as their seniors, and I know that this can cause some really serious issues. Hence, regular communications and alert messages should be sent out to keep them abreast of relevant issues and situations.

As you all will agree, a strong and open communication system is important for communicating critical issues with each and every stakeholder in the organization. A formal communication system needs to be established to ensure information reaches people as intended. In case of undesirable news, it is better to communicate than leaving it to speculation. I would personally prefer that — and, I'm sure, so would you! In cases where there is a lack of information, people create their own version leading to rumors. Providing clarity on the impact of undesirable news helps gain people's trust. Good news must also be shared as frequently and correctly. The key is regular communication — organizations must ensure that all communication channels are up and running and up-to-date in all situations. Thus, an organization, to be truly transparent, needs to present all information, even if it causes uncomfortable situations.

In order to thrive in today's fast-paced and connected world economy, leaders must build a culture of trust and openness. In this increasingly competitive marketplace, employees working on a certain engagement should be able to quickly access trustworthy information and act on it. In case things do not work out, it should be considered a learning experience. Such an encouraging attitude by the leadership motivates people to take risks. If people are encouraged to take risks, they are bound to be innovative and creative. People should be positively rewarded for thoughtful risk-taking. Employees should also get rewarded for demonstrating excellence and courage. This is yet another positive way to build trust and transparency, which eventually leads to better performance.

Most importantly, organizations need to bring change to their existing practices and processes to enhance transparency. The change must begin at a behavioral level and then get institutionalized into each process within an organization.

Most organizations have yet to understand the relevance and repercussions of transparency. But the wiser and more mature organizations agree that the need for transparency — forced by technological changes and the tremendous pressure created by stakeholders — leaves organizations with no option but to create a transparent organizational culture — and the sooner the better.

As I mentioned in the beginning of this post, any act of transparency, big or small, that keeps one's personal as well as professional life at harmony is a necessity. What would you practice? The choice is obvious!

Author: Sidhartha Shishoo - Vice President, Human Resources, Analytics & Research