Transparency: It Cuts Both Ways

Transparency in business can be a very good thing. Sharing timely, relevant and accurate information with employees is an ethical and respectful practice that can help steer a business or organization away from failure and toward success.

Employees seek and appreciate leaders and managers who freely share information. A recent study conducted by TINYpulse that analyzed data from approximately 300 companies and more than 40,000 responses found that management transparency was the top factor when determining employee happiness. The more transparent leaders were, the more employees trusted them. 

To cc or to not cc

Sharing information with employees and customers can enable workspace awareness, build trust and help companies achieve goals. Moreover, transparency can enable better decision making. But transparency also has an opposite side – a “blind side” of excessively sharing critical information that can backfire and threaten to cause more business pain than gain for everyone.

The development and utilization of transparency does not guarantee success. For example, managers and leaders who excessively share too much “what” and not enough “why” often create a blaming culture that discourages employees and diminish motivation. Too much transparency of employee errors can also result in people hiding innovative ideas. Elevated levels of visibility of mishaps can reduce creativity as people fear the watchful eye of their superiors.

Furthermore, managers who consistently use transparency in order to punish bad behavior and recognize good work may also communicate moral standards that are impossible to meet. When employees have this impression, they are motivated to resist, resulting in less citizenship behavior. Even the best employees can and will occasionally make mistakes.


Another seemingly innocent attempt to exhibit a sincere emblem of transparency is when managers and employees include everyone involved in email correspondence. David De Cremer at the University of Cambridge recently studied organizations in which cc’ing others on email was the norm; and those in which colleagues were only occasionally cc’ed. De Crèmer found that distrust was significantly higher in the organizations where cc’ing was the norm. De Cremer’s results indicate that people evaluate this practice as signaling distrust, which reduced their trust in and commitment to the organization. Conversely, those organizations where colleagues almost never cc’ed others were held to be the least distrustful.

Despite the outcome of this research, many managers and employees utilize widespread methods of electronic transparency within their daily interactions, including the common use of email. Many individuals consider that the greater the number of people involved, the smarter decisions will be and the greater the buy-in. The potential ensuing issue, however, is that it typically takes much longer to come to a decision when several people are included in a long chain of emails.

While transparency in digital communications is not the panacea, there can be no doubt that organizations now operate in an expanding universe of information technology. Shareholders, employees and the general public live and work in a world where, on average, over 2.5 million users share content on Facebook, 350,000 tweets are sent, and 270,000 snaps are shared through Snapchat in a single minute. As a result, employees and consumers in the current marketplace expect more transparency and disclosure.

The Double-edged Sword

In the quest to garner greater employee and customer trust, engagement and productivity, a number of businesses utilize progressive transparency initiatives and programs. For example, in an effort to reduce employee frustration, Buffer reveals the salaries of each employee by name. Whole Foods, which was recently acquired by Amazon, labels its food products so customers can tell if they contain GMOs (genetically modified organisms). Zappos promotes an extranet that gives vendors complete visibility into their business in order to improve the lives of their sellers and backers.

In order for transparency to serve as a catalyst for sound ethical decisions and subsequent actions, managers and leaders need to distinguish why they should share information and how to balance transparency against risks related to privacy and confidentiality. They also need to know how to responsibly share information and especially so when using emails and other messaging services to communicate with employees and the general public. Behind every email is a person. Thus, the biggest risks are not emails and browsing websites, but how people in organizations use these technologies.

Transparency is a double-edge sword. It cuts both ways. The lack of an effective transparency game plan can hinder rather than help effectuate organizational objectives and employees’ abilities to fulfil the core business.

On the other hand, transparency reveals a silver lining in regards to ethical practices. Transparency can help businesses and organizations become more responsible and respected corporate and social citizens. And responsible and respected citizens seldom go out of business.

Charlotte Westerhaus-Renfrow