The More You Tell Your Workers, The Better They’ll Be

The More You Tell Your Workers, The Better They’ll Be

Starbucks CEO Howard Schultz is a big believer in transparency. Credit: Wikipedia Commons

Starbucks CEO Howard Schultz is a big believer in transparency. Credit: Wikipedia Commons

Howard Schultz, thanks largely to his meteoric success as CEO of Starbucks, is worth $1.5 billion, making him the 354th richest man in America. And yet, when probed, he talks about a completely different kind of currency.

I think the currency of leadership is transparency,” Schultz said. “You’ve got to be truthful. I don’t think you should be vulnerable every day, but there are moments when you’ve got to share your soul and conscience with people and show them who you are, and not to be afraid of it.

Here’s a legitimate question – what is Schultz talking about? And what does it mean to your business?

What Does Transparency In Business Mean

When people think of transparency in business, they think of transparency with investors – required by law – and transparency with customers – essentially required by law as well. These are both critical, but equally important is another kind of transparency – transparency with your own workers.

What does that entail? It means giving all of your employees (nearly) all the information about the company – even financial statements, if they so desire. It means making efforts to explain each decision and each initiative to every employee within your organization, regardless of their role.

An example: You are starting a new ad campaign. A truly transparent company will share – perhaps through a company intranet site – the reasoning behind the ad campaign, the cost of the expected campaign and the goal of the campaign.

Make sense? I know, some of you are saying that sounds like a lot of work (it isn’t really, most of the content is already produced, it is just a matter of posting it). But here’s the bigger question – why do it?

The Logic

There are two big-picture reasons why smart companies are transparent:

  1. More transparency gives workers a better understanding of why they are doing what they are doing, which leads to more engaged employees.
  2. A more transparent environment allows for a more collaborative atmosphere, where ideas can come from all levels of the organization.

Let’s start with reason one. In the book Drive, Daniel Pink discovered that the workers who are most engaged and most motivated are workers who find their work meaningful. By fully understanding the company and its actions, workers have a better understanding of the meaning behind their work and how their role fits in to a company’s overall success.

That’s going to result in workers who care more and are ultimately more productive. It also empowers workers to be strategic with their time and align their actions with the company’s goals.

The second point is that it is a mistake to think a board of directors knows all. A truly transparent company allows ideas to filter up, instead of solely down, by in-the-field workers who might know something the powers-that-be do not.

Here’s one great example of an idea filtering up:

There was a cleaning supplies company in the 1960s that designed a new dustpan. As it went onto market, one of the janitors at the company who was using the dustpan noticed it was too thick, and it was hard to sweep dirt into it.

He told the CEO one day as the CEO was leaving work, the CEO listened and made the dustpan thinner. After, the company has had its janitors use all prototypes of each new cleaning product for a week before it was mass manufactured.

As you can see, key insights can come from all levels of your organization. Best way to adopt this method? Have an online “suggestion box,” which could again exist on a company intranet page (here’s a great example of how it works at Google).

So Does It Work?

Does this transparency actually mean more money for your company? The short answer is yes.

One study by Tiny Pulse found that the number one factor contributing to employee engagement was transparency. Compare that to a recent Gallup finding that only 29 percent of American workers described themselves as engaged employees, which cost companies $300 billion a year in production costs.

So, if you can improve the engagement level of your employees via some transparency, there is a lot of money to be made (billions, technically, if it became a widespread practice). Plus, just think about the brain power you can tap into by involving your whole company in decisions, instead of just a select few.

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