The buzzword in the White House these days is “transparency.” Should it be a buzzword in business, too? Is it preferable to be transparent as a business leader? Can a small business owner be transparent to employees? Is transparency the same as honesty?
I’ve been mulling these questions over in my mind and recalling the times in business when I was too transparent and the times when I failed to be as open as I should have been. Have you been on both sides of the fence on this matter, too?
Being transparent is characterized by visibility or accessibility of information especially concerning business practices says the Merriam-Webster dictionary. The word “frank” is listed as a synonym and defined as talk that is marked by free, forthright, and sincere expression. The dictionary also defines honesty as fairness and straightforwardness of conduct and implies a refusal to lie, steal, or deceive in any way.
Whew! As a business owner I admit that it was hard to live up to those definitions, even though I considered myself to be trustworthy and respected ahead of the need to be liked. Are we in a new environment where absolute transparency is going to be expected by our employees? Is total honesty at all times a requirement? I hope not!
Let’s face it. Not everybody in a business needs to know everything about the business, nor can everyone “handle” being aware of “everything.” Of course I’m excluding from this “mulling over” anything that could be considered private information about individuals. That aside, how much do you share with employees about revenue goals, other employees, profitability, pay increase plans, year-to-date performance, etc.?
Recognize that the rumor mill exists in any business, and it’s pretty hard to hide troublesome issues or deliberations for too long. At some point employees need to be kept informed. There are, however, ways to be a bit circumspect without being misleading. And this often is necessary, especially with situations that are fluid or unsettled.
You may need to update your employees to prevent misinformation from impacting business operations. In such circumstances, it’s important accurately to convey the situation without embellishing it with unnecessary facts or aspects that are not settled. In such instances use of the words: currently, at present, at this time, etc. will fairly “hedge” your comments. Unfortunately, people often don’t hear these words and jump to premature conclusions. It’s then a “damned if you do; damned if you don’t’ situation.
Departure of a key employee can often create the need for some form of transparent, honest communication to employees and some customers. Try to deal with facts and not be insincere, especially if the employee was involuntarily separated from the business. First, you can remind the others that you have a responsibility to respect the privacy of the employee and therefore cannot say more than the fact that the employee is no longer with the business. Perhaps you will feel comfortable in saying that you appreciated the employee’s contributions to the business in the past. But don’t be hypocritical about this. Employees will know if you let someone go because of poor performance, so you cannot then say much else without getting into deep water. If the situation is touchy, it is best to contact a labor law attorney and get advice on how to handle the situation both with the departing individual and afterwards with the other employees.
Another area of transparency that can help or hurt is sharing financial goals and performance information. Goals are good to share if they can be seen as reasonable and if you can explain what everyone needs to do to make them happen. Expense goals can also be shared carefully. There is little benefit in sharing expense goals over which employees have no control; but costs they can help manage should be shared. Profitability is another matter all together. Most uninformed employees think businesses make huge amounts of money. They fail to understand all the expenses of running a business. I think it is safe to “sanitize” the expenses by lumping them together perhaps in lines that total general and administrative expenses and operating expenses.
The objective here is to present cost numbers the employees can affect and avoid exposing details that can lead to questions you would have trouble answering in a way they would accept. An example of such a question might be “Why do we have those car lease expenses?” Of course you, as the owner, may use the car yourself and the “perk” is part of your overall compensation, where your compensation is adjusted downward because of the “perk.” There are lots of other individual expense lines not relevant to most employees that are better left lumped together with a generic line item description.
With all your presentations remember that what you are telling them, even though you remind them it is confidential, may well find its way out of your business. Certainly you can remind employees of the harm that can come to their company if such information is relayed to competitors. But it may still get out. That’s a tradeoff you need to consider.
Business is a teamwork activity in 2009. There is no room for non-performers in the current economic environment. You need to treat the team members with respect and this means being transparent and, of course, honest, to the greatest extent possible. Because this can mean walking a tightrope in what you say and don’t say, the best advice is to avoid off the cuff comments and winging it. Before communicating with employees or customers about any difficult issue jot down your remarks and let them “mature” for a day. Revisit your notes with an objective view and see how they might be misunderstood. Correct any ambiguities, and then be sure you are being truthful, frank, and complete.
That’s the best you can do. Your most experienced, reliable team members will appreciate your position and support you and the others will take their cue from these “floor leaders.”
