Think of an organization as a person: You have the need to share your feelings and exchange information to other people, but you still want to keep certain things to yourself. Similarly, transparency within an organization can backfire when employees know too well about each other or about the operations of the company. In an article for McKinsey, Julian Birkinshaw and Dan Cable talk about some problems with transparency within an organization:
- Can create information overload
- Legitimizes endless debate and second-guessing of senior executive decisions
- Reduces creativity as people fear the watchful eye of their superiors
- Can yield unintended consequences when opening information sharing with the intent to promote trust and collective responsibility
- People knowing too much without relevant knowledge
- Many people do not want to know the full details of how their firm is doing, nor do they want to be held fully responsible for its outputs.
Get the Balance Right
Knowing everything about paychecks, employee backgrounds, latent organizational practices, or strategy or decision-making processes may create opposition to how things are done in the workplace. Not everyone really pays attention to how their company is doing or who their colleagues are; they just care about how to perform their jobs well and receive their earnings regularly. Therefore, don’t bloat people with unnecessary information when they already feel “full” with what they have. More is not always better.
What you should do is strive for a balance between transparency and responsibility. Employees have the right to be informed about their services, products, and target clients. However, they may not need to know how you make your decisions on which product lines to invest in, for instance. Similarly, you would want to make it publicly clear about employee rewards and bonuses as a motivation for your team to work hard in their jobs. Nonetheless, leaking details about your employees’ pay rate or amount of bonuses can be considered violation of confidential information.
The authors feature the need to achieve a perfect balance in organizational transparency:
We are getting used to transparency in our lives. We allow companies to know where we are physically and what we are thinking about and searching for. There are some 1.18 billion active users on Facebook every day, many of whom are updating their information for all to see. But transparency can also cause pain without much gain. Smart leaders need to know when to share and when to keep things back. They should also know when to get immersed in the details of a project or activity and when to turn a blind eye. Transparency is vital, but it has a dark side, and it takes real skill to get the balance right.
Knowing too much about something also makes the journey of exploration less exciting—your level of interest is only maintained when there are still things to learn about something. Therefore, leave some space for your employees to learn about you and the environment they are surrounded by. It’s something that can inspire and thrill them every day.
You can view the original article here: http://www.mckinsey.com/business-functions/organization/our-insights/the-dark-side-of-transparency