When times get tough, the tough get transparent. That’s the word from Quint Studer, author of the new book Straight A Leadership: Alignment, Action, Accountability.
“Leaders have talked about transparency for a long time, but it’s never been more important than it is now,” says Studer. “Remember, we share information with employees for a couple of reasons: one, it’s the right thing to do, and two, it’s good for business. And most companies can use every possible edge these days.”
Studer asserts that companies with cultures of openness and free-flowing information fare better in difficult economies. That’s because (among other benefits) transparency helps employees stay connected to financial big picture, reduces complacency, sparks creative solutions, creates organizational consistency and stability, and leads to faster, more efficient execution.
Here’s how you can create a more transparent organization:
1) First, make sure senior leadership is aligned. Does everyone see the external environment the same way? Does everyone understand organizational goals and plans? Does everyone agree on what success looks like? If not, it’s time to remedy the situation.
“Alignment is most important at the senior level because all information cascades downward from it,” says Studer. “If one senior leader is out of sync with the others, then everyone under her is going to be out of sync. In a big organization, that could be hundreds of people.”
2) Close the perception gap between senior leadership and middle managers. Senior leaders generally have a pretty clear grasp of the real issues facing the organization. They are steeped in these issues every day. Mid-level managers – who, after all, are busy managing – don’t always see things the same way. The only solution is for senior leaders to relentlessly communicate the issues to them.
“You can address these issues in supervisory sessions,” suggests Studer. “You can hold regular meetings with mid-level managers. You can send out email alerts that link to news items driving high-level decisions. If you’re a senior leader, it’s critical to make sure the people under you understand the big-picture issues and their implications. It’s one of the most important parts of your job.”
3) Help people understand the true financial impact of decisions. Get comfortable framing all major decisions in economic terms. If a manager wants to spend money on something – a new piece of equipment, a new employee, a salary increase – she needs to be prepared to explain in financial terms how it will pay off for the company. Employees, too, need to understand the real cost of mistakes or lapses in productivity as well as the potential positive impact of doing things in a new way.
“Many of the healthcare leaders I work with use a financial impact grid to educate employees on how certain issues translate to dollars,” notes Studer. “The idea is to teach everyone to think like the CFO. Educating people in this way can be very powerful in changing their behavior.”
4) Put mechanisms in place for communicating vital issues to frontline employees. People aren’t going to pick up on what leaders want them to know by osmosis. You need to tell them clearly, succinctly, and often. That means putting in place a system, or a series of systems, to ensure that the transparency value gets translated into action.
5) Prepare managers to answer tough questions. If a manager tells his employees the company is cutting back on overtime, he’ll almost certainly hear questions like, “If money’s so tight, how can the company afford the new construction project?” Or, “I depend on my overtime hours as part of my salary. Will everyone’s salary be cut?” The manager needs to know ahead of time exactly how to answer so that he won’t blurt out a we/they perpetuator like, “Sorry, that’s the orders from the top.”
“In a transparent company, there’s no reason to hide financial realities from anyone – but that doesn’t mean managers naturally know the best way to phrase their answers,” says Studer. “Some are just better communicators than others. Anticipating tough questions, formulating the right key words, and sharing them with leaders at all levels allows everyone to answer them consistently.”
6) When you have bad news, treat employees like adults. Once a tough decision has been made, share it with everyone immediately. Don’t sneak around behind closed doors and certainly don’t lie.
“Knowing what’s happening, and what it means, is always better than not knowing,” says Studer. “And often, what people are imagining is worse than what’s really happening.”
7) Keep people posted. When something changes, let them know. This builds trust between leaders and employees and keeps them connected to the big picture.
“Be sure to share any good news you get,” asserts Studer. “Transparency doesn’t mean ‘all bad news, all the time.’ When you disseminate positive developments as quickly as you do negative ones, you boost employee morale and reinforce any progress that’s being made.”