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The 5 Benefits of Transparent Leadership

Openness is a key attribute of high performing leaders and organizations today. Here are five powerful benefits that occur when a transparent leader and their organizational culture are transparent:

Rob Peters
May 27, 2017 · 7 min read

1. Problems Are Solved Faster

Employees learn more about one another and can develop ways to collaborate more effectively in solving problems when their leaders are transparent. For example, I can remember when my first boss at IBM would challenge us to book more revenue in our assigned large accounts. When we submitted the revised account plans, we were told to give it another pass — multiple times over. After confronting my boss, he told me — “Rob, I am being told that I must achieve a specific revenue target that year and if I cannot achieve it, I am going to have to reduce staff. I would rather not inject additional anxiety in the team.” I responded by recommending that if he openly shared his fears with our team and that if someone was not able to handle the truth — then we would uncover another problem. In other words, my boss’ leadership group would be more successful at crafting a strategy to exceed performance requirements; rather than reducing an operating budget. We did and my manager learned an important principle about how to solve difficulties by being transparent with his entire team.

2. Credible Teams Are Built Faster with less Friction

Transparency is a powerful glue. Trusted Team building through transparency takes shape when the leader can openly and proactively discuss what he believes are the strengths and weaknesses of the team. The leader creates a safe environment by which allows everyone to share their perceptions — creating a culture where the leaders (with the support from the team itself) can begin to purposefully match individuals to handle certain projects based on specific performance requests.

When leaders can be thoughtful about the makeup of the team profile and issues — as it pertains to both individuals and the group — this allows the team to build trust together and find innovative ways to discover the best mix of talent to deliver on performance expectations. It nurtures a risk-taking attitude that allows for cross-functional responsibilities and improvements.

3. Relationships Develop Authentically

Transparency builds bridges of trust that bring individuals together that have not yet discovered one another. For example, the Standard of Trust Group working with Bruce Lewin, Founder of Four Groups (4G), assessed our team’s social profiles. Based the online assessment each member of the team took, we were able to optimize the team by understanding the skills and experience of the individual. These outputs were shared amongst the team. First of all, this level of transparency was used to allow the members of the team to rapidly discover each other, build stronger bonds of engagement and to form bonds of respect and support.

Authenticity is the alignment of head, mouth, heart, and feet — thinking, saying, feeling, and doing the same thing — consistently. This builds trust, and followers love leaders they can trust. -Lance Secretan

But we discovered during our pre-work that the character traits and tendencies of these individuals while different — complemented one another. The result: an energetic team of uniquely different leaders forged a relationship of trust and influence as a result of each of them being authentic and true to each other. It is also important to note that transparency allows relationships to mature faster, as openness can potentially avoid misinterpretations that can fuel unnecessary anxiety.

4. People Begin to Promote Trust in Their Leader

When leaders are transparent, people can be much more unbiased in evaluating the pros and cons about their leader. If you are transparent, especially during the worst of times, you actually bolster your leadership as people begin to trust you as a person and thus will respect you more as a leader. Employees may have trusted their leaders in the past, but after their leader becomes transparent their employees are now more willing to encourage trust in their leader with others. This eliminates any biased judgments that others may have had of the leader whose transparency they had yet to experience.

5. Higher-Levels of Performance Arise

Each of the previous points builds on the next. The formula is simple: Teams of high-trust have higher levels of performance. It’s really that straightforward. Unhappily, the lack of transparency that still exists among leaders in the workplace can potentially put one of these powerful factors at risk — which leads to lower performance levels.

It’s better to be open and honest early in your leadership tenure because if not — you most likely will not be around long enough to create a sustainable legacy. The success of a relationship capital leader is one who inspires hope and opportunity through honesty and authenticity. You are the standard of trust that sets the expectation and level of performance.

The Significance of the eBay Confidence Rating

If you build it they will come…and make a marketplace. Pierre Omidyar founded EBay in part on that principle. His vision for creating a digital marketplace of sellers and buyers was on the verge of failure due to the proliferation of unethical & fraudulent sellers who were cheating the buyers. Now, Mr. Omidyar could have hired an army of eBay marketplace police to watch and filter out this fraudulent behavior, but he chose a different approach. Omidyar developed and implemented a voluntary confidence rating system by which buyers would input their perceptions of the seller’s trustworthiness for the benefit of the eBay community. This volunteer army collectively looked out for the interests of the community and the eBay marketplace flourished. eBay is an example of how technology & transparency combined with principles behavior earned relationship capital for the ethical sellers and punished the unethical seller through the loss of relationship capital.

The significance of this “ratings” system cannot be understated. Standards of trustworthy selling behavior were monitored, captured and shared by eBay buyers. Sellers now had a powerful incentive to do the right thing for the buyer. Trustable sellers that captured higher confidence rating scores would attract more buyers versus those with lower ratings. This confidence rating was a form of relationship capital or intangible asset that enabled a seller to sustain and flourish in this eBay marketplace.

Always do right. This will gratify some people and astonish the rest.” -Mark Twain

It was a virtuous cycle that governed acceptable seller behavior. If you think about your reputation and credibility in this hyper-connected and transparent world, we all have earned some level of a “confidence rating” or credibility with the people we interact with.

The Relationship Capital Game

The Relationship Capital Interaction process is an open “authentic leadership” process.

The RC interaction process must start with the CEO and senior leadership but needs to be practiced by all stakeholders in order to achieve a high trust and high-performance culture. To earn Relationship Capital (RC) trust through fulfilled commitments and positive perceptions, you need to understand the steps in the RC Collaboration Process:

  1. Purpose/Guiding Principles

Conclusion

Effective leadership, organizational effectiveness, and sustaining long-term competitive advantage are enabled by greater levels of authenticity, transparency, and relationship capital credibility with all stakeholders.

Transparency requires leaders, professionals, and entrepreneurs to be authentic and open in their interactions. Credible and transparent leaders solve problems faster, high performing teams are created faster with less friction, team relationships are built authentically, people promote trust in their leader, and higher performance is achieved. There is a compelling business case for practicing transparency that earns relationship capital within the organization and its ecosystem of customers, partners, and trust ambassadors.

What do you think? Please share your comments.

Sources:

Originally Published on August 25th, 2015 on Pulse

Rob Peters

Written by

Relationship Capital | Gamification | Co-Creator of Peer SaaS Platform | HR Tech and Workplace Culture Strategist | CEO| Author of Standard of Trust Leadership

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