Strategy: Develop a Culture of Transparency & Sharing

By Greg Glidden posted 08-30-2017 13:56


The Value of Transparency

Recent years have been marked by numerous corruption allegations and scandals affecting corporations, governments, and leaders around the world.  Additionally, Firms struggle to innovate and adapt to the rapidly changing pressures of technology, labor market, customer expectations, etc.  Ideals such as honesty, trust, integrity, and transparency have become critical competitive differentiators. Clients need to trust the firm they engage; highly valued employees will not remain within a firm they don’t trust.  Furthermore, trust creates deeper relationships with clients and bonds between peers. Transparency builds that trust.

It makes ethical and business sense to pursue transparency.  Transparency forces an organization to accept challenges and failures, and deal with them in an open format. Transparency is a call to action; requiring an organization to increase risk awareness. Providing access to information enhances an organization’s ability to adapt to changes and address crises.  Establishing an open environment strengthens an organization over the long term.   

But who in the firm is responsible for transparency?  In order for transparency to be effective within an organization, it has to be displayed by all stakeholders.  To realize this immense value for the firm, stakeholders have to be capable and willing to change.  These traits must become a part of the organizational culture. 

Organizational Culture

In its most distilled essence, organizational culture is the accepted behavior of individuals belonging to your firm.  It is the shared common values of individuals and how they accomplish the organization’s goals.  A firm's culture – both positive and negative – is entrenched in its identity.

The culture of an organization consists of the formal and the informal culture. Formal culture is established by written policies and guidelines, while the informal culture is established by common knowledge and practices.  Culture is an iceberg, where formal guidelines are the tip and informal is the mass just below the surface that is pulled along by the current.

Organizations endeavor to embody professional ideals such as innovation, integrity, adaptability, results orientation, collaboration, transparency, etc.  To transform an organization to obtain such ideals requires driving systemic change.

Strategies for Change

How does a firm effectively manage to change the ubiquitous characteristic of culture to an abstract construct of transparency?  Culture is often the last initiative that leaders address because progress is gradual and existing culture may be a detriment to change, but culture is an extremely impactful transformation over time.  

The first step of any strategic initiative is defining the goal.  The firm must commit to the ideal and establish the guiding principles that the organization wants to emulate; transparency.  And the ideal must be clarified into a tangible result.  Establish how a transparent firm communicates, collaborates, market to clients, disclose finances/pay, etc.

Evaluate Existing Culture

The second step is analyzing the existing culture to understand where the firm is currently. The hardest part of building a culture of transparency will be an honest deep dive into the organization’s existing culture.  A comprehensive review must recognize existing complex behaviors and norms that are pervasive within the firm.  To accomplish the cultural review, the firm may want to establish a diverse cross-functional committee and/or engage independent expert consultants who can see the firm without bias.

Regardless of who’s conducting the review, the best method to understand the existing culture is to get in the trenches and into the mud.  Identify transparency challenges of existing leadership and common practices by asking hard questions at all levels. Does discussion shut down after the leader expresses an opinion?  Do key personnel disseminate information openly and is knowledge documented?  Is there disconnect between the observed reality and the expressed response to the hard questions? Cultural awareness can be an agonizing process for firm and will require that core commitment to change.   

Once the existing culture has been identified and cultural goal established, the strides for change can be framed.  The firm must communicate, model, and reinforce the appropriate positive behaviors of the new culture.

Communicate Change

Effective communication embodies the alliteration; Clear, Concise, Consistent Communication. Cultural change requires leaders clearly express the firms commitment to transparency.  It is fallacious to expect to change to a culture of transparency without clear transparent communication.  Be concise about what the change is to achieve, not just what the change is but the end goal of the change to the firm. To affect the formal culture, transparency must consistently become an integrated part of existing processes and procedures. Consider expanding the depth and width of who communication extends to. Disseminate information through wider segments of the firm increases the opportunity for change in individual behaviors.

Model Behavior

With established commitment from leadership to change, continue to extend the buy-in to all levels of the organization. Culture cannot be changed by mandate, it is a grass roots effort. To shift informal culture, you have to shift individual behavior.  It is highly likely there are individuals within the organization who currently exemplify and practice the cultural traits the firm desires to emulate. To affect long term change, expend energy to support employee’s best behavior instead of trying to prevent the worst behavior. Publically recognize the individuals and their positive behavior; fashion them as individual champions of change within the firm and others will conform to the behavior.  These champions may even become established mentors who can provide guidance to leadership and other key individuals to effectively expand the appropriate behavior. It is crucial to focus on select critical behaviors that can be built upon; attempting to broad of an approach affecting multiple behavior patterns will dilute the effectiveness to change. Over the long term, the cultural behavior shifts to the new norm.

Evaluate and Reinforce

After the commitment is communicated and behaviors are modeled, the culture has to continually be evaluated to ensure the behavior shift is succeeding and not drifting off target.  Return to the previous evaluation of the existing culture and ask the questions again.  Gage the extent culture has shifted, pinpoint what aspects are lagging, and recognize positive behavior changes.  Use successful changes in behavior as building blocks for additional behavior changes.

Changing existing culture requires working within the existing culture; using existing norms to boost change.  Align the soft culture (personal goals of individuals) with the hard culture (organizational goals). This may include rewarding or gamification of the positive behaviors.

Although culture may seem monolithic to change, it is not a static. As staff changes and other firm goals are established, culture will continue to shift with these forces.  Evaluation and reinforcement of the positive behaviors must be an ongoing effort. 

The Culture of Transparency

To develop a culture of transparency, firms must clearly define the goal, evaluate the existing culture, communicate the change, model positive behavior, and reinforce the desired behaviors. With a continued strategic focus on cultivating a culture of transparency, firms can recognize the value of the effort.  Firms which develop a culture of transparency have open communication to identify and address challenges. Knowledge and information are shared enhancing the value and contribution of individuals.  Empowered individuals engage clients honestly and confidently, supported by trusting peers.