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Transparency

The tools & techniques and cultural shift to make it work

Part of the presentation given at Spark the Change conference in London, July 3rd 2014.

Imagine a working environment with a top down hierarchy, where people work in silos, where information is not shared between departments, where communication is on a need to know basis, where progress is hindered by bureaucracy and internal politics, where employees are unmotivated, unengaged and uninspired.

The Boss from Hell

Now imagine a working environment with a simple, flat organisational structure, where there is openness and respect and no secrets, where information flows easily between people and departments, it is entrepreneurial & innovative and changes are being implemented quickly, getting new products and services to market is faster, where employees love coming to work, where productivity and revenue are market leading, resulting in happier stakeholders and a positive environment.

Spotify Office

Who would prefer the first scenario?

Who would prefer the second scenario?

No brainer really!

Well I’m going to share how you can achieve a more open, transparent, collaborative working environment where employees are engaged, motivated and inspired on a daily basis.

What I am going to say is radical – this will put you outside your comfort zone and challenge your thinking. I will share the how, the why and the benefits

It has worked in many organisations but not many have the guts to truly embrace transparency.

What is Transparency?

A situation in which business and financial activities are done in an open way without secrets, so that people, inside and outside can trust that they are fair and honest.

What are the benefits?

1. Problems Are Solved Faster

With transparency, everyone learns more about one another and can grow to work toward solving problems faster when everyone is transparent

Reduces Politics – so much time debating what outcomes may happen – what one exec said or meant, he said, she said, blah blah – confusion becomes clarity.

Years ago, I remember coming across a show stopper issue for a payments project for a bank. I raised the issue with the project manager, who said we could not change the project from green to red status because we were green last month, could not move to red as that would look as if the project was not being managed well. I ignored that “advice” and told the business sponsor the truth and although he didn’t like the news it was far better than waiting another two months to hear about and then act on it.

With transparency, when communication channels are open, decisions can be made based on facts and data and having the trust of others to take action, making mistakes in the name of progress is accepted as it is underpinned by transparency.

2. Trust

People begin to promote trust in their leader and others. When leaders are transparent, people can be much more objective in evaluating their pros and cons.  If you are transparent, especially during the worst of times, you actually strengthen your leadership as people begin to trust you as a person and thus will you gain more respect. If you know what you are going to get from someone, if you have trust, respect and a supportive environment, this encourages people to grow and achieve more.

3. Higher Levels of Performance Emerge

Each of the previous points is interdependent and builds upon one another.  This naturally takes us to higher-levels of performance.

The more we collaborate, communicate via sharing – drives more questions, answers and  decisions.

The formula is simple:

Faster problem solving + trust = higher levels of performance. 

It’s really that simple.


3 key ingredients:

  1. Strategy
  2. Structure
  3. Social Skills.

1. Transparent Strategy

Business, organization and culture change are hot topics in the corporate world today. How can you have a transparent strategy?
You need all execs, directors managers to buy in to it.

Open up the debate on topics such as:

  • Employee engagement and culture
  • How to improve customer service
  • Research and Development

There are some scenarios where complete transparency will not work:

  • Maybe would harm a competitive bid
  • Maybe would affect share price
  • Legally confidential?

2. Transparent Structure

  • Roles and responsibilities
  • Core processes
  • Culture
  • Talent management

It is the organizational engine that produces the results that drive revenues and profit.

This part of the organization is often not transparent – a complex structure – gives everyone headaches and delays trying to understand what is allowed, who should be informed or give approval ?

Also management is uninterested or not empowered to invest time and resources to fix it.

For many, if it ain’t broke, why fix it? Like an car that runs well, the only time to look under the bonnet is when there is a problem.
By then, troubles can run deep.

This is a major area of opportunity for transparency.

3. Social Skills

fake

The most challenging ingredient is the social skills to change.

We all have something to hide, something to prove and something to lose.  If you are not being transparent ask yourself why? Why not? Is there a reason why I cant share this?

Transparency demands a personal willingness to let yourself be vulnerable.

Define what you want to be known for, your values – what are you all about – what do you like and don’t like.

Your personal, online and work personality is all about who you are and what you want to be known for:

  • How do I make people feel?
  • How do people benefit by working with me?
  • What words do others use to describe me?
  • What service do I have to offer people?
  • What do I do that makes me stand out from everyone else?

Personal transparency is what truly builds trust.

People will follow and respect leaders who operate with an attitude of “what you see is what you get,” even if they have bad news to deliver.

Cultural shift

We are experiencing cultural shift.

We have witnessed in the past big technology trends, email, internet, I remember when not everyone was allowed email… then not everyone was allowed internet – as it was seen as a time waster and no value. Sound familiar?

Now it is

social media, mobile – we have more computing power and tools at home and they are making their way into the workplace

Is being embraced in personal lives

What this cultural shift brings is that people are used to sharing being more transparent at home with friends on facebook, Instagram, twitter etc – but communication in the workplace is email, meetings, conference calls etc

Default to open – we are used to Open conversations

Yet at work most workplaces are using outdated tools…

Email

  • Email – 1-1 or 1-many tool
  • Not inclusive
  • Extremely poor collaboratively – not great for conversations, debate or sharing ideas.
  • What is it used most for? Email’s prime use is cover your ass…CYA

Meetings

  • Meetings are a virus…
  • Excuse for coffee, chinwag
  • Closed shop, not everyone involved – meetings minutes rare
  • Slow and inefficient way to communicate

With social tools you get involved in other interesting conversations you didn’t know about or were not aware of.

If you are having a meeting share with others who you are meeting and what it was about, share insights, progress and decisions openly

Barriers to Adoption

Management trend or a fad?

Most people silently applaud it, want to it to be there but don’t think it can be done (“phew no chance” or “that will never happen here”).

It is not a new idea, if you haven’t tried it before it is hard. Transparency is a decision to relinquish some control of your organization, your strategy and even your personal reputation.  That’s why it takes guts.

Examples of transparent companies.

netflix

Netflix Culture document has 8.5m views, Sheryl Sandberg called it the most important doc in the valley.

What I liked about it was very clear wht the company was about, what they valued and didn’t value.

It had personality. The opposite of corporate blandness.

Enron building they had values & mission statement mentioning integrity, communication, respect and excellence – obviously not paying any attention to them, leading to them famously went to jail for.

The are transparent about what they fire people for – fire them for not having the values.

Open about how to keep great talent

If you are a hard worker with A level effort  but B level performance means you would get a good reward. Yet, unusually  minimal effort but A level performance was more valued.

Brilliant Jerks are not tolerated too inconsistent and affect teams too much to be worth it

Created huge PR and is transparent for people on what it is like there before you join, very aspirational place.


Buffer logo

Buffer

At Buffer, employees know everything about everyone else: how much they make, salaries are published – so the algorithm for bonuses and what their equity is worth–even how much they sleep.

At the same time, if you hear a lot of griping about salaries, you shouldn’t look just at your system for paying people. One thing I’ve learned from experience is that happy, motivated employees who are doing work they love and feel they are being treated as adults don’t gripe about money unless their pay is hugely unfair. If you hear a lot of complaints about salaries, I suspect that’s probably a manifestation of a much bigger disease: Your employees aren’t deriving enough personal satisfaction from their work, or they are miserable for other reasons.

It takes a lot of salary to make up for a cruel boss or a prisonlike workplace. And rather than adjusting pay, you might choose to focus on some non-monetary ways to make employees happy.

Happy employees make better products and provide better customer service and will make your company successful and profitable. And success allows you to pay workers better.

One of the key values at Buffer is to work smarter, not harder.

They recently gave everyone at Buffer a Jawbone UP wristband. It allows you to automatically track your sleep, your daily steps, your nutrition, and a lot more. Personal improvement is a big part of that, so giving employees a tool that can help improve their sleep patterns is a no-brainer. A few weeks in it’s already had an incredible effect. Browsing everyone’s sleep patterns and talking about how to get more deep sleep has an amazing effect on productivity.

For example, something that was definitely very scary for them to make all salaries public within the company. They created a formula for how salaries are calculated and added it to a Wiki page for everyone on the team to see.

Why?

One, to truly commit to our value of transparency. Others can edit it on a wiki.

Joel, co-founder, emailed everyone and said, “I truly believe that transparency breeds trust, that’s one of the key reasons for this adjustment.”

The trouble with keeping salaries a secret is that it’s usually used as a way to avoid paying people fairly. And that’s not good for employees — or the company.

Two, it made hiring new people for the team a lot easier as a culture fit, became an aspirational place to work and yes, you guessed it, more transparent. In fact they could tell potential employees how much they would earn before getting into any other details. They just ran through the formula and came up with the number.

They’ve also implemented a daily personal improvement program. They track it using the productivity app IDoneThis:

Every day everyone logs what they’ve done, what they’re doing, and what they improved upon.

Here are some recent examples:

  • Four-day streak of getting up at 6 a.m.
  • Back to 10 minutes of consistent daily meditation.
  • Switched to audio books instead of music and now learn on the commute to work

At nooQ – We have taken on the OKR objectives and key results -  principle from Google and Apple – which weekly we share our big hairy goals, lessons learned, what you have done, what you are excited by, what can be improved.

Sharing aspirations and what you enjoyed most offers a huge insight to what makes people tick.

Since improvements are shared company wide, it’s a great way to get support and encouragement and team building – commit to a big goal publicly.

Semco

SemcoThere are no job titles and no personal assistants. People set their own salaries. Everybody shares in the profits.

That sounds like a recipe for disaster, or at least chaos, but Semco has grown consistently for the last twenty years despite being located in one of the most volatile economies in the world.

The story of Semco and its majority shareholder, Ricardo Semler, is:

“… his father handed him control of the family’s small Brazilian company, Semco, a maker of industrial machinery. With the company in dire strais, Semler (at age 22) responded radically. He fired most of the top managers and got rid of most management layers; there are now three. He eliminated nearly all job titles. There’s still a CEO, but a half-dozen senior managers trade the title every six months, in March and September. Executives set their own pay, and everyone in the company knows what everyone else makes. All workers set their own hours. Every employee receives the company’s financial statements, and the labor union holds classes on how to read them. Workers choose their managers by vote and evaluate them regularly, with the results posted publicly.

It all sounds insane, certainly in the 1980s it was almost unheard of bar WM Gore where the inspiration came from – and possible an extreme reaction to build the opposite of his father ?

Except that it worked!

Under his ownership, revenue has grown from US$4 million in 1982 to US$212 million in 2003 and his innovative business management policies have attracted widespread interest around the world.

After another severe recession in 1985 with government restrictions on borrowing capital – workers committee suggested 3 principles suggested to survive

First, the profit-sharing percentage would be increased until salaries could be restored. Second, management would take a forty percent cut in salary. And, third, the workers would get the right to approve every expenditure.

In the plants, workers started handling multiple job duties and using their knowledge of how the factory worked to come up with new procedures that saved time and money. At one factory they divided themselves into three manufacturing units of about 150 people each. Each unit had complete responsibility for manufacturing, sales, and financial management. The new Semco was being born.

The autonomous team idea was adopted throughout the company. As it evolved the teams began hiring and firing both workers and supervisors by democratic vote.

With very few exceptions most of the dramatic ideas came from someone other than Ricardo Semler. His genius has been in holding to a general concept of empowerment and allowing and supporting changes that could easily have been viewed as taking away his power.

Semco’s units are limited to 150-200 people. That’s something of a magic number in sociological, management and anthropological studies. Dunbar’s number

It’s the largest group that a human being can feel a part of and that can create a social context that affects behavior.

British anthropologist Robin Dunbar puts it this way, “The figure of 150 seems to represent the maximum number of individuals with whom we can have a genuinely social relationship, the kind of relationship that goes with knowing who they are and how they relate to us.”  That number appears again and again in studies of communities, of effective plant sizes and effective military units.

Semco is private but Semler reports average annual revenue growth at 40%.

Ideas to get started

You might not go that far but here are some events you can do

Open Innovation – open up a list of challenges your business faces. Suggest topics on growth, strategy, customer service, marketing, innovation. Open it up to the public, publish them on the web. If that is too revealing, open them up to partners and suppliers, universities – push it a little outside your normal routes and channels – speak to others in other industries, gather a wide range of opinions and perspectives

Crowdsourcing ideas – simple way to share your ideas, new products or services – gather feedback on current products or services – brainstorm fresh ideas or methods. Challenge your current ways of thinking, ask challenging questions

Get really fresh ideas – run a startup competition – get local or national startups to pitch to solve problems

Start a Community

Implementation of transparency and collaboration culture is often seen as difficult. We know companies have to connect with their internal and external stakeholders, we understand a collaborative culture is now key to success, we may even realize that social technologies are not sufficient to ignite collaboration. So, where to start?

Well, the trigger can be as simple as a meeting. A different type of meeting. Traditional ways of working have to evolve, companies must reinvent themselves because old ways don’t work anymore.

The only thing that is constant is change – so how can you deal with that – talk about it – create a community to discuss issues.

Working out loud

Working Out Loud starts with making your work visible in such a way that it might help others. When you do that – when you work in a more open, connected way – you can build a purposeful network that makes you more effective and provides access to more opportunities.

Making your work visible: this is indeed the fundamental starting point for working out loud.

Making your work better: One of the main reasons for openly narrating your work is to find ways to improve it. You’re publishing so other people will see it, including some who can provide useful feedback, connections, or other things that will make your work better.

Leading with generosity: By framing your posts as contributions – as opposed to, say, efforts at self-promotion or personal branding – you’re more likely to engage other people. You’re not just looking for help but offering to help others, too. “The currency of real networking is not greed but generosity.”

Building a social network: As you work out loud over time, you’ll be interacting with a broader range of people. The further you develop relationships with people in your network, the more likely it will be that you’ll collaborate with them and that they’ll be willing help you in other ways.

Making it all purposeful: Finally, since there’s an only a certain amount of  contributing and connecting you can do, you need to make it purposeful in order to be effective. (Goals might be as simple as “I want more recognition in my firm.” or “I’d like to explore opportunities in another industry or location.”) having a goal in mind focuses your learning, your publishing, and value for your connections.

Techniques

  • Start Small
  • Take Issues One At A Time
  • Make time to explain your logic
  • Clearly outline the steps for advancement
  • Question Your Discomfort

1. Start small:

While your company is still small and dynamic, that’s the time to make it radically transparent. By starting early, you weave that culture into your company’s DNA and attract people that are inspired by you before they start

Start with Small teams, company – groups.

Start with one topic or goal

But think big

2. Take Issues One At A Time

When creating a radically transparent business, Smith recommends incremental exposure. “Thinking about it all as a whole is very difficult and very daunting,” he says. Instead, each time you would typically hide information, ask yourself, “Why can’t I share this with everyone?” Unless someone comes up with a strong argument against it, always opt for openness.

Don’t beat yourself up if you fail – try again

3. Make time to explain your logic.

As a radically transparent leader, you must be honest and fair. Employees need to understand how you came to your decisions and why.

“You do need to spend a huge amount of time with your team explaining everything,” Atkinson says. The extra time will pay off–ultimately, your effort will inspire trust and loyalty.

4. Clearly outline the steps for advancement.

Be clear on the path.

The path for what is measured and important, the path for bonuses and promotions.

Publish it, share it and allow anyone to comment and add improvements.

5. Question your own discomfort.

Making traditionally private information available naturally stirs up discomfort.

“A lot of times it’s uncomfortable because it’s never been done before,”

Or it might make yourself look stupid or show up mistakes. Ask yourself if sharing that information would help or empower your employees. If it would, do it. Once it’s out in the open, discomfort quickly fades.

If you would like to speak to us, we can help advise you with all of the above and of course provide you with the best software on the market to enable that as well.

Make me transparent – nooQ it

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