Between Opacity and Transparency

Structuring transparency throughout the organization brings the best of both worlds

Transparency is generally considered a good thing — think of online seller ratings — , but not in all cases. It is important to beware of the unintended consequences in specific areas, as an article in the McKinsey Quarterly (“The dark side of transparency”, Feb 2017) points out.

Some advantages of transparency:

  • Accelerates information gathering
  • Helps people coordinate their efforts
  • Empowers frontline employees
  • Improves the quality and speed of decision making
  • Makes those in position of authority accountable to others

Some drawbacks:

  • Information overload
  • Legitimization of endless debates and second-guessing of leadership decisions
  • Self-censoring, moving of important discussions to other places
  • Inviting criticism before output is ready
  • Reducing creativity as people fear the watchful eye of their superiors
  • Perceived as a right, independently of ability to understand content

Most often, people want to know enough to do their job well, and they want to have the right to know more, but for the most part they are happy for someone else to process and manage that information on their behalf. 
Hence the necessity to strike a balance between transparency and responsibility.

For instance, if customer service is a top priority, it becomes everyone’s responsibility, and accordingly the relevant data should be available to all. On the other hand if the decisions about which product lines to invest in and which ones to cut are the CEO’s responsibility, she should have privileged access to the information needed to make those decisions. If employees can access this type of privileged information anyway, it might be useful to create a team or task force with responsibility for sifting through and channeling the views of employees to the ultimate decision makers.

There are 2 hidden aspects that emerge between the lines of the source article:

  1. The most effective organizations structure their levels of transparency
  2. The most effective innovators and creators bear their responsibility

The first aspect is an operational realization that the same policies cannot be valid throughout an organization because the nature of the work is different. Unifying transparency or opacity will always lead to inefficiencies. For instance, too much transparency is one of the reasons why some holacracy experiments fail. It is up to the leaders to determine the right amount of transparency —within appropriate cultural boundaries— and provide commensurate tools. It is an activity to be done at the level of the whole organization, the individual departments, and the functional teams.

The second important hidden aspect is the tight and necessary relationship between creative/innovative work and responsibility. Creativity and innovation are not easily predictable and can be described as work proceeding on a “one step back, two steps forward” basis. This means that transparency in the process does not provide further indications of the actual progress. On the contrary, any assumption of linear progress inevitably leads to wrong predictions. Therefore the planning and the prediction of the outcome can only lie with the creative/innovator. Then, as a consequence, the responsibility is delegated, too, to the creative/innovator.

Transparency is a gift, use it wisely.

~ Nicola