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Steven D. Goldstein


Transparency Is a Leader’s Best Friend

People know when you’re withholding information, so make it perfectly clear

Published: Monday, April 25, 2016 - 15:06

A leader’s ability to communicate is fundamental to building trust and forming a cohesive team. Transparency has become a necessary element of team support. It may be scary to share everything, but the benefits are undeniable.

As I was walking back from the gym one morning, I passed by the local boutique food store and noticed the manager standing in the middle of a circle, with all of her staff around her. It looked like every employee was present. I had noticed her doing this several times before. Curious, I waited for the store to open and went in to talk to her. “I see you every day having these meetings before you open,” I said.“ What’s that all about?”

“Look, we have about 25 people working here, and we’re open 14 hours a day,” she began. “There’s always something going on, good, bad, or otherwise. I need them to know everything I know—what’s new, what’s missing, what specials we’re offering, and so on. I then ask them what they think, or about anything that happened yesterday that we need to know. It’s just a quick session so that everyone is on the same page. It takes under 10 minutes, and I couldn’t imagine running this place without it.”

This is a great example of a leader being open and letting everyone know what they need to know to be successful—that day. Who’s out sick and who has to cover? Why are the croissants arriving 30 minutes late? What special soup has the chef prepared for the day? What inventory is running low and what should the staff tell customers if they run out? There are no secrets, and everyone is informed with the latest, best information possible to enable them do their jobs well. How empowering is that?

Within the best companies today, whether large or small, information is shared as much as possible among the leaders and employees. To properly train employees, don’t withold knowledge that will help them exceed expectations in responding to customers’ needs. Everyone needs to know what’s really going on so information must flow punctiliously. That means leaders get complete, accurate reports and then broadcast them in a timely manner.

Areas of disengagement

There are three main areas of corporate disengagement that can cause transparency issues. The first is having an entrenched silo structure. People in different departments are in the habit of talking only among themselves instead of sharing information with other departments that need it. It’s become so common that it gets accepted as the norm.

The second impediment is leaders have a tendency to ration what they know; they withhold information for a variety of reasons, both conscious and subconscious. This stinginess creates mutual mistrust and unnecessary stress.

Third, many companies have poor tracking methods. Managers either don’t measure things, or more often, they measure the wrong things—things that are quantitative in nature rather than qualitative. In other words, you might find out that seven pair of shoes were sold one week, and only two the next. But no one tracks why the customer who tried on the shoes left without buying them. That’s the really valuable information.

Bridgewater Associates: a culture of sharing information

Ray Dalio, the founder and CEO of Bridgewater Associates, the world’s largest hedge fund, wrote a 123-page book defining what the culture of a company should be. The overall company philosophy at Bridgewater Associates is described in The Wall Street Journal:

“Bridgewater is known as much for its idiosyncratic culture as its investment prowess, and Mr. Dalio has long espoused that conflict is essential and helps the firm to perform at its best. Employees are told to air disputes openly and then try to resolve them, which sometimes escalates into a vote. Vote results are made available to the rest of the firm. ‘All employees see what would be hidden in most companies,’ Mr. Dalio said.”

Not only do many of the communication tools and practices employed by companies serve to convolute rather than to clarify, but also many leaders seem to have lost sight of the basic tenet that the more people know, the better they can do their jobs.

From my years of observing and working with companies, one thing is crystal clear to me (pun intended): To be a successful, an engaged leader must be a transparent one.

First published on the thoughtLEADERS blog.


About The Author

Steven D. Goldstein

Steven D. Goldstein is a proven leader who has held executive positions with leading global brands, such as American Express (Chairman and CEO of American Express Bank), Sears (President of Sears Credit), and Citigroup, as well as several early-stage enterprises. He currently works in private equity as a Senior Advisor with the consulting and advisory firm Alvarez & Marsal. His book, Why Are There Snowblowers in Miami? Transform Your Business Using the Five Principles of Engagement, will be available in September.