Leadership Transparency That Builds Credibility

Overview

You can violate those rules [of humility and integrity] for a season, but the trap door will eventually open up. And you’ll fall through.

—James Blanchard, CEO OF SYNOVUS, #9 ON FORTUNE’S “100 BEST COMPANIES TO WORK FOR IN AMERICA”

Enron, WorldCom, Arthur Andersen, and Martha Stewart may have been just a few bad apples that fell from the tree, but the rest of the bunch must now suffer the critical eye of inspection. Like it or not, the recent swath of corporate and political scandals blasted the public’s “leader as hero” viewpoint, if one ever existed, and our ethical threshold has become much less accommodating to greed and questionable business practices. There has been a basic shift in what it means to be a true leader. While market performance may still be king, the board of directors is now more apt to show the door to a chief executive officer (CEO) who may have just the touch in increasing stock value but has somehow developed a reputation that smacks of something less than ethical. Successful leadership is now a marriage of equal partners— performance and credibility.

In reaction to this shift, companies are perhaps more zealous-in their search for ways to put some honor back in business. As the search continues, a word has begun to pop up more and more in management circles: transparency. A transparent method of operation, some believe, may just be business’s weapon of mass destruction in the war on corruption.

The concept of transparency—a sort of “what you see is what you get” code of conduct—is a well-developed model from a financial governance standpoint; full financial disclosure is an essential part of securities laws. Yet transparency is in a more adolescent stage as it applies to management and, more specifically, leaders. Indeed, as the need for transparency has become apparent and more organizations have begun calling for it so as to be more credible to their customers, investors, and employees, leaders have been left to wonder: What exactly does it mean to me? How do I become a transparent leader? The most astute leader will ask a question that is perhaps most relevant: How do I practice transparency in a way that maintains or builds credibility?

Lest we get hitched to the wagon of yet another management fad and are somehow led to believe that transparency is next to godliness, one thing should be made clear: Transparency alone will not result in a perception of credibility any more than the open-book philosophy of the 1990s did. Transparency by itself is a simplistic prescription.

Practiced in ways that show or maintain respect and concern both for the individual and for the common good, however, transparency can lead to amazing things. Organizations benefit from a more efficient process of decision making and tactical execution as players are more informed, operations speed up, and problems are identified more readily along the way. Leaders build trust and experience more finely tuned collaboration with their peers and followers. And both the organization as a whole and the individual leader are perceived as having a higher level of credibility.

Another crucial element of transparency that leads to credibility is figuring out just how open to be—just how much to hang on the line for all to see—for while there can be too little transparency, there also can be too much. And who determines the optimal level? The leaders themselves.