The Benefits of Radical Transparency

Christopher here: I’m pleased to welcome Alex Raymond, Founder and CEO of Kapta* as a guest blogger. Alex develops systems that promote personal responsibility and transparency at work. Now here’s Alex…

We’ve all heard the expression, “The right hand doesn’t know what the left hand is doing.” It’s a metaphor for internal disconnect and lack of communication.

In a comedy show viewed on television this situation can be very funny. In a corporate environment it can be a serious problem leading to irreversible decline.

Here’s another expression we’ve all heard: “I don’t know. You’ll have to ask the boss.”

It’s the companion to the right hand not knowing what the left is doing, only in this case the problem has been created by design. The boss has set himself up in the center of the team, like the hub on a wheel with spokes. All the spokes lead to the hub. None of them intersect.

Only the boss sees the whole picture, while the individual managers or team members – the people on the rim, joined to the hub by their single spoke – know only their small area of turf.

Both situations represent a state of opacity. In its most literal sense, an opaque organization is one in which individual managers, teams, or even entire divisions don’t know what’s going on in the next cubicle, the neighboring office, or in the facility in the adjoining state.

Everyone keeps their own nose stuck to their own grindstone, while relying upon some superior power – the folks in the executive offices – to somehow keep everything on track.

Businesses that operate with an approach of hierarchical information access are less competitive because only executives know the true status of the business

Those who are lower in command have little grasp of the big picture, and because they aren’t able to see problems and challenges for themselves, they don’t have a sense of urgency to do everything necessary to help the company move forward. The full range of their talents is wasted.

Agility and Accountability

The opaque hierarchical system has largely fallen by the wayside and today is favored principally by dictators who must keep their political rivals divided and off balance.

The old opaque method even disappeared in New York City – historically a management nightmare – when in 2002 Mayor Michael Bloomberg broke with 190 years of tradition and implemented a “bullpen” open plan office.

Reminiscent of a Wall Street trading floor, over fifty mayoral aides and managerial staff worked together in the former Board of Estimate chamber. The design was intended to promote accountability and accessibility.

The mayor sat at a desk that was the same size as the others. “As a work space, it is something that you do not think that you can ever get used to,” a former bullpen staffer said in New York Magazine. “But when you see the mayor hosting high-level meetings in clear sight of everyone else, you start to understand that this open-communication model is not bullshit. And that it works.”

When he took office in January 2014, newly inaugurated Mayor Bill de Blasio said that he would use Mayor Bloomberg’s signature office-without-walls at City Hall. To date, city employees have not been instructed to dismantle the bullpen or to draw up plans to replace it.

Radical transparency, in which the activities of an organization are visible to everyone who has a stake in the organization, is a powerful tool that promotes agility and accountability.

Businesses that employ transparent strategies share important financial and corporate information with all employees, not just senior executives, and allow employees to have a direct influence in the success and or failure of the business.

If a company is performing poorly, no area of operations escapes scrutiny. Employees can see just how badly things are going, which motivates them to do better. On the other hand, if an employee does something that improves the company, they are made aware of that as well, and shown how their efforts have resulted in increased profitability and success.

The principles of radical transparency improve business performance in terms of focus, engagement, and growing and recruiting talent. In a radically transparent organization, all stakeholders have access to the data they need in order to make informed decisions. The entire workforce is privy to a host of information about the performance and practice of each employee that includes noted successes and failures, with notes for everyone to learn from.

The Practice of Radical Transparency

What are some typical policies you’ll see in a radically transparent organization?

  • Employees set measurable and visible objectives and key results (OKRs). Each individual’s progress and priorities are clear.
  • Employee data explicitly linked to performance, ensuring high levels of fairness.
  • Everyone is benchmarked, all data are available for inspection and analysis, and all employees are treated accordingly.
  • Newer employees are motivated to excel through mirroring the best practices of high-performing employees.
  • Because of the free flow of information, there’s an agile response to changing internal and external circumstances.

We all do better when we aren’t mentally burdened by a fight or flight instinct, worrying about which of our colleagues is the boss’s current favorite, receiving and unearned promotion, or badmouthing our work.

The foundation of radical transparency is mutual trust and respect for every member of the team, and it can be fostered in any organization.

*Alex Raymond is Founder and CEO of Kapta, an online platform for Agile Business Management. Kapta’s software supports companies to become agile businesses, grow faster, and execute better. For more information, see http://www.kaptasystems.com

Posted in Agile, Leadership on 03/03/2014 01:53 am
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