The Case for More Transparency in Your Firmby
Think about all of the employees in your firm right now and ask how you would you feel knowing that one-third of them don’t trust you?
According to the 2016 Edelman Trust Barometer, a survey of 33,000 individuals in 28 countries, almost one in three employees don’t trust their employer. This is a problem for firms interested in profitability, engagement and retaining their best talent.
A lack of trust in firms is often due to a lack of transparency, which fosters a culture of trust. Employees who are kept in the loop and understand their role in the overarching purpose and goals of the company are more likely to trust their employer.
But what is transparence and, moreover, how we can have more of it in our firms?
A transparent workplace is like a healthy relationship, it involves communication, honesty, regular feedback, respect and admitting wrong. When we talk about transparency, most people immediately think about salaries or the firm’s expenditures and financial results.
That’s a part of the conversation, but it’s not all. Transparency is also about why firm leaders make the decisions they make.
Benefits of a Culture of Transparency
Now that we’ve defined transparency let’s get clear on why it’s so important:
1. Transparency = better relationships
You’re probably familiar with the phrase “employees don’t quit their jobs, they quit their bosses.” That’s not an exaggeration. Gallup’s State of the American Manager Report found that one in two employees have left a job to get away from a manager at some point in their career. When it comes to building solid workplace relationships, transparency and its by-product of trust are key.
2. Transparency = engagement
Hopefully your firm has a strategic plan. But do your employees understand their role within it? In a culture of transparency, employees understand the firm’s vision and how their efforts help achieve firm-wide goals.
This is about the big picture, but it’s also the small stuff. Don’t let your people wonder why they’re doing what they’re doing or wake up to new policies being instituted overnight.
3. Transparency = profitability
Transparency isn’t just a “nice to have.” It’s a best practice. According to the Great Place to Work Institute, companies with a high trust culture experience “increased levels of innovation, stock market returns two to three times greater than the market average, and turnover rates approximately 50 percent lower than industry competitors.”
How to Build a Transparent Firm Culture
Here are three ways to create a culture of transparency in your firm.
1. Make a commitment
Like other fundamental firm strategies, building a culture of transparency requires commitment and time. In other words, it’s a cadence, not a one-off.
Create a plan and invest in tools that facilitate transparent communication. Assign a champion to drive the effort and a small team to make recommendations and do the “leg work” of seeing the initiative through.
2. Be open about your decisions
Strive to have everybody in your firm understand “the why.” Share details about finances, growth, hiring, priorities and plans.
Some good places to start are:
- Why do we keep certain clients?
- Why are we investing in new technologies?
- Why do we follow certain processes?
- Why do we use this pricing structure?
- Why are we expanding into this new service offering?
- On what criteria do we base promotions?
- Why do we participate in these peer groups, communities, or charitable causes?
- What success skills do firm leaders see as vital to the future of the firm?
If you don’t have all of the answers yet or are waiting on more data to come in, say so. This shows respect for employees and an understanding of their need for information.
3. Give and seek out honest feedback
Encourage open and honest feedback. Consider anonymous surveys aimed at measuring engagement, leadership, alignment and development. Share the results of those surveys throughout the firm.
Have regular formal reviews and informal check-ins with employees to discuss goals and performance. Don’t be afraid to have tough conversations. When leaders avoid giving direct feedback on performance, the avoidance results in a loss of confidence and security.
Transparency conversations often turn some people off. They may hesitate to share client acceptance criteria, the logic behind pricing structures, or why certain people are promoted and others aren’t.
But, when firms push back on giving people this information, often it’s because they simply don’t have a good answer. In that case, your problems run much deeper than deciding what you should or shouldn’t share with your team.
Building a culture of transparency takes time and effort, but your reward will be better relationships with and between highly engaged employees. What steps are you taking to bring transparency to your firm?
This article originally appeared in the Boomer Bulletin blog.