Radical Transparency and its impact on our teams

Radical transparency in the business world is the theory that everyone who works at a particular company should be fully honest about all matters from the top leadership to entry-level new hires [i]. It effectively means that everyone in the organization knows almost everything about the company both internally and externally. 

Company transparency has been around for a long time and has shown to improve employee engagement, reaction times to problems, alignment to overall goals and better performing teams. The term “Radical Transparency” was popularized by billionaire hedge fund owner, Ray Dalio. He went a step further by empowering employees to bring ideas, mistakes, problems and other matters they might typically hide to the forefront for open discussion. The thought was that giving this freedom would remedy problems, make decisions and uncover new ideas much quicker and mitigate being blinded by confirmation bias (Only seeking evidence that agrees with your view). 

The concept has excelled as the business evolves and populations want more equalized distribution of resources. Numerous well-known brands champion radical transparency such as Patagonia, Got Junk, Fiix, Fit Bit, Narrative Science and Buffer. Many go so far as to publish employee salaries and discuss lay-offs in the public forum. As ethics, traceability and sustainability continue to shift into societies view so too will radical transparency [ii].

Introducing radical transparency to your team after the company has been founded is not a simple task. Provided the company fit with this model, it must be championed directly from the leadership team and permeate all the way through the company culture underpinned by high levels of trust. [iii]. Leadership exemplifying these attitudes is the only effective way to offer confidence to the workforce and inspire trust without fear of exposure, punishment or embarrassment. Displaying financials, discussing pain points, targets, weaknesses, competitors, and many more allows a company to promote employee inclusion and develop trusting attitudes. Full trust, clear expectation and free-flowing employee contribution are key performance indicators of successful radical transparency [iv].

At first glance, the concept may seem utopian and simple with the sense that every organization should adopt these practices. However, there are practical considerations to raise and accept. The degree to which the model relies on trust between all members of the organization is fundamental. Trust gives the foundation for psychological safety which is what any team member requires to contribute, admit mistakes and share ideas [vi]. Psychological safety is regarded as the confidence and safety from embarrassment, social risk or punishment for contributing to their views and issues. Unfortunately, the Edelman Survey reflected in the World Economic Forum suggests that as many as one in three employees do not trust their employer [vii]. In a cyclical sense, this survey also suggests that trust issues are rectified by further transparency [vii].

Introducing radical transparency also invites interpersonal challenges. Decisions taken by CEO’s and upper-tier management have implications for everyone involved. Enacting full transparency demands courage and ownership from middle management and employees who need to avoid being viewed as incompetent. Specifically, leadership figures as the key influencer must deliberately structure and communicate the goal of transparency to their team. Fostering psychological safety implores leaders themselves to exemplify this attitude by asking for help, admitting mistakes, and accepting that a ‘subordinate’ may contribute better ideas on occasion than them [viii]. Demonstrating courage and championing this requirement is inclusive of correcting discouraging behaviours and actively removing fear and uncertainty from the employee base [ix]. Leadership must also understand the complexity of sharing good and bad feedback and the different weights each needs to be delivered with. Additionally, knowing when your team needs to move on from a topic or decompress from a discussion is very important. 

The successful introduction of radical transparency can show impressive results. Having an employee base able to disagree with leadership and ask questions undeterred by fears has resulted in failures being avoided and quicker and more varied solutions [ix]. Further to this, full disclosure of company finances instils trust but also removes the nature of people to question their earnings against the peers. Finally, by understanding organization problems and threats and feeling involved in the direction taken, teams become more invested in the success and thus take ownership of outcomes [ix]. Each of these benefits improves productivity and efficiency while also boosting sales. Individuals and teams who feel fulfilled in their roles tend to champion their employer.

As exceptional and inviting as those benefits are, there can be drawbacks as not every stakeholder might want full transparency. Radical transparency makes significant demands of the leaders who can cause burn out from the weight of difficult conversations and the possibility of doubt in themselves occurring [x]. When there are negatives to share, valid concerns for staff internalizing feedback arise, which damages psychological safety [xi]. Employees tend to steer clear of people who give feedback that contradicts their own self-view [xii]. The Big Brother effect can also set in when everything is open for discussion as employees can feel monitored. Employees are shown to be less productive under surveillance [x]. Many of these issues can be mitigated by effective preparation of management staff, accepted norms of safety and careful hiring processes [x].

Similar to the impact on the company, it is worth considering the impact of radical transparency on the emotional safety of teams [vi]. The workload, successes and failures of each team are made visible, which exposes a team positively and negatively depending on how effectively established psychological safety has been [viii]. Transparency takes the decision to share any concerns or problems encountered away from a team. While exposure of concern to peers can be intimidating to teams, well-established norms of safety prevent this from being a negative experience [ix]. Rather than feeling alone in problem-solving or unable to make mistakes, teams can benefit from the support and collective input of others. Likewise, it empowers teams to assist their counterparts and a sense of mutual achievement in success. The sharing of success and the support through challenges allows teams the freedom to feel safe but also become more efficient at problem-solving [viii].

Discussion of the organization and team funnels perfectly into the individual impacts. Radical transparency is experienced differently throughout an organization and is entirely dependent on how it approached in the company. For management figures, delivering negative feedback may challenge their own safety and that of the individual team member, but the pressure and stress of decision making is shared among each contributor. Where it is correctly enacted, transparency fosters trust [vii], and when a climate of safety is enforced individuals are free to ask more questions, feel a sense of belonging and relieved of numerous concerns. A reduction of in-house dramatics, elimination of salary comparisons and welcoming platforms for ideas and input positively benefit each person and their emotional safety. When emotionally safeguarded, team members are seen to actively contribute and challenge in a supported and fulfilling manner [viii].

As an industry professional working with teams on company culture and values, there are many lessons to be derived on transparency practices. While there is no one size fits all remedy, and every organization is different, the most agile, adaptable and problem-solving companies have a higher degree of transparency. From experience, these companies tend to lose less time on the wrong projects or making mistakes and have a far more involved and motivated staff body. Giving space for the employees to contribute to solutions by providing an open environment improves their decision making drastically. Although challenging, correct transparency implementation results in much tighter knit teams, who are aligned in their focus on success. In fact, this opinion corroborates with Google’s Project Aristotle findings which showed that psychological safety underpinned by trust gained from transparency was the most significant factor in team performance [vi], [viii] and [xiii]]. The evidence from companies, economic reports and employee satisfaction statistics suggest that radical transparency, while challenging, can be exceptionally rewarding. 

Reference list:

[i] Heemsbergen, L. J. (2013) Radical Transparency in Journalism: Digital Evolutions from Historical Precedents. Global Media Journal (2013).

[ii] Bonanni, L. (2011). Sourcemap: Eco-Design, Sustainable Supply Chains, and Radical Transparency. The ACM Magazine (2011).

[iii]  Zak, P (2012). The See-Through Organization. The Drucker Institute (2012).

[iv] Veselinova, E., Gogova Samonikov, M. (2018). Building Brand Equity and Consumer Trust Through Radical Transparency Practices (2018).

[v] Myers, J. (2016). Why don’t employees trust their bosses? World Economic Forum (2016).

[vi] Delizonna, L. (2017). High-Performing Teams Need Psychological Safety. Here’s How to Create It. Harvard Business Review (2017).

[vii] Edelman Trust Barometer 2016: Employee Engagement Executive Summary (2016)

[viii] Edmondson, A. (1999). Psychological Safety and Learning Behavior in Work Teams. Harvard Administrative Quarterly (1999).

[ix] Edmondson, A. (2002).Managing the risk of learning: Psychological safety in work teams. International Handbook of Organizational Teamwork (2002).

[x] Gino, F. (2017). Radical Transparency Can Reduce Bias — but  only if it’s done right. Harvard Business Review (2017).

[xi] Bernstein, E. (2014). The Transparency Trap. Harvard Business Review (2014).

[xiii] Duhigg, C. (2016). What Google Learned From Its Quest to Build the Perfect Team. The New York Times Magazine

[xii] Gino, F. (2016) Research: We Drop People Who Give Us Critical Feedback Harvard Business Review (2016).

The Human Factor in the Workplace of the Future.

Integrating artificial intelligence (AI) continues to be an increasingly necessary workplace improvement to help organizations become more competitive. Automating mundane tasks streamlines business functions to improve delivery, increase quality and reduce costs, and while routine processes are ideal for AI, in a newly reimagined workforce, human contributions are equally important. Far from eliminating human workers, the number and types of people jobs created as a result of AI will increase and be in high demand. This includes technical areas such as programming and technology design, as well as roles that deal with workplace changes resulting from the increased use of AI, such as user and employee experience, ethics, and, of course, the need for AI training. Further, AI can be used to complement existing roles so that certain positions can be upskilled and supported by AI, particularly those requiring a more personal, intuitive, and empathetic touch.[i] 

Acknowledging the challenges of “fusing people and technology”, Deloitte’s notes in its 2020 Global Human Capital Trends that, “The power of the social enterprise lies in its ability to bring a human focus to everything it touches…”.[ii]  Organizations need to consider how AI can best serve their mission and goals and how to develop an AI ready workforce. To achieve such balance and successfully operate in this future workplace – one that is on our virtual doorstep – requires a range of diverse skills and talents melded in harmony. In other words, it will be a team sport.[iii]

Teamwork is a staple in virtually all areas including sports, military, medicine, marketing, IT, human resources, and more. Students learn the importance of working in groups at an early age and study groups long have been a fundamental component of MBA programs to foster bonds and prepare students for the inevitability of future workplace dynamics.[iv] Research on team effectiveness is prolific, and theories abound on what makes the “perfect” team. Across fields, there is growing recognition that skills and abilities, while important, have less to do with a team’s success than its psychological makeup.

Although team members each have an important functional role, too much emphasis has traditionally been placed on skills and experience rather than considering each member’s psychological role and how that affects the team.[v] [vi] This explains why the best minds don’t necessarily make the best teams and why what should, theoretically, be the “A Team” can turn out to be more of a B or even C team. Instead, the personalities of the members are better predictors of the success of the team.

For the past twenty-years, the “Big Five” personality traits have been widely accepted as appropriately representative of most individuals. Not surprisingly, these dimensions – openness to new experience, conscientiousness, extroversion/introversion, agreeableness, and neuroticism[vii] – often are used to assess employees and job candidates based on the assumption that they are  indicative of superior job performance. However, while there is consensus that these attributes are desirable, specific attributes may not be appropriate or necessary for all jobs.[viii] Certainly  extroversion is a plus for a sales position, but it may not be a critical attribute for a librarian or mechanic. Conscientiousness may be coveted by some supervisors, but others may find that it inhibits highly desired creativity and spontaneity. And while agreeableness is important among team members, at the same time highly agreeable people may be uncomfortable posing challenging questions or playing devil’s advocate, which are critical to innovation and identifying gaps.[ix] As such, a bigger picture view that factors employees personalities in conjunction with the type of project and its ultimate goals should be considered when determining team composition.[x]

Major enterprises have come to recognize the importance of this and, in an effort to create highly effective teams, have poured extensive resources into identifying characteristic associated with the most successful teams. As a result of their research, Microsoft developed an entire curriculum based on the five key attributes they found to be common in successful teams: team purpose, collective identity, awareness and inclusion, trust and vulnerability, and constructive tension[xi]. Google hypothesized that the best teams would consist of the best people, so they initiated Project Aristotle to find out.  As with most workplace groups, they found that some teams clicked immediately while others struggled to make it through a meeting. Ultimately, they identified two shared behaviors common to successful teams. First, each member spoke about the same amount. This occurred in different ways but at the end of the day, everyone had the opportunity to speak and be heard. Second, members on the “good” teams were more intuitive about how others felt and were more sensitive to team members feelings.[xii] This reinforces the importance of uniquely human roles as the use of AI continues.

Another area that characterizes effective teams is their comfort with conflict. Conflict, in reasonable quantity, is essential in teams because it helps members stay motivated and innovative, encourages creativity and communication, creates bonds, improves morale, unifies direction, and discourages groupthink.[xiii] Finally, as with all relationships, trust is always a key attribute. This is especially important in  virtual teams[xiv] where members might miss each other’s nonverbal cues and other more nuanced communications.

[i] Meister, J. (2019, Jan 8). Ten HR trends in the age of artificial intelligence. Forbes.

[ii] Volini, E., Denny, B., Schwartz, J., Mallon, D., VanDurme, Y., Hauptmann,…Poynton, S. (2020, May 15). The social enterprise at work: Paradox as a path forward. Deloitte Insights, 2020 Global Human Capital Trends.

[iii] Meister

[iv] Duhigg, C. (2016, Feb 25). What Google learned from its quest to build the perfect team. The New York Times Magazine.

[v] Hogan Assessment Systems Inc. (2016). Conflict: The secret to successful teams.

[vi] Winsborough, D., & Chamorro-Premuzic, T. (2017, Jan 25). Great teams are about personalities, not just skills. Harvard Business Review.

[vii] McCrae, R.R., & Costa, P.T. (1992). An introduction to the five-factor model and its applications. Journal of Personality, 60, 175-215.

[viii] American Psychological Association. (2020). Which traits predict job performance?

[ix]  LePine, J.A., Buckman, B.R., Crawford, E.R., Methot, J.R. (2011). A review of research on personality in teams: Accounting for pathways spanning levels of theory and analysis. Human Resource Management Review, 21, 311-330.

[x] Weir, K. (2018, Sept). What makes teams work? American Psychological Association, Monitor on Psychology.

[xi] Spataro, J. (2019, Nov 19). 5 attributes of successful teams. Microsoft.

[xii] Duhigg

[xiii] Hogan Assessment Systems Inc.

[xiv] Ford, R.C., Piccolo, R.F., Ford, L.R. (2016). Strategies for building effective virtual teams: Trust is key. Business Horizons, 60, 25-34.