Business transparency can be defined as exposing as much organizational information, operational process data, and decision-making as possible to internal and external stakeholders.
Business transparency can lead to effective and efficient organizational behavior and outcomes. Many leaders suggest that transparency is necessary to achieve a level of success within an organization. Admiral Thad Allen, the former Commandant of the United States Coast Guard, explained that “Transparency of information breeds self-correcting behavior.”
During his first days in office, President Barack Obama communicated that his administration would be transparent administration. Former President Abraham Lincoln expressed similar admirations suggesting that transparency puts a leader in a position of strength; conversely, non-transparency breeds weakness.
Despite the emphasis leaders place on organizational transparency, many public and private sector organizations struggle with the notion. Research suggests that the lack of leadership integrity, organizational culture, and the inability to communicate effectively through interpersonal communication skills are inhibitors to organizational transparency.
Integrity is doing the right thing. I believe that the integrity of leaders has become one of the most paralyzing inhibitors to organizational transparency. Banutu-Gomez (2006) noted that integrity is the most important leadership attribute and suggested, “A leader with integrity provides consistent responses that show a sense of equal respect for everyone…”
A leader who behaves consistently exhibits the integrity necessary to nurture the growth of trust: (p. 157). Zablow (2006) explained, “Employees are very sensitive to situations that impact their workplace and base many of their perceptions of the organizational culture on what they hear senior management say and, more importantly, do”.
Organizational environments such as those exhibited by Tyco, Enron, Wall Street, and the Federal Government have long possessed closed regulatory policies and practices that do not promote transparency. An example of an industry that appears to be improving but continues to be non-transparent is the mortgage lending industry.
The lack of business transparency in this industry resulted in continued leadership integrity challenges and unfair lending and predatory practices. The lack of leadership integrity has become the most prominent individual leadership challenge faced by today’s global leaders (industries such as sports, politics, military financial, etc.).
A second inhibitor is organizational culture. Louis explained that organizational culture is a mutual comprehension of information, knowledge, and intelligence shared by a group of people that are largely implicit among members and are clearly relevant and distinctive to that particular group. The understanding is then passed on to new members of that group.
Research suggests that a transformational leader can set the tone of an organization by providing a vision, communicating his or her vision, inspiring and empowering people, and displaying integrity regardless of circumstances (Boddie, 2008). However, the organizational culture is often developed, shaped, then maintained, and transformed by members within the organization through formal and informal interpersonal communication processes. Many organizational cultures are diverse and rely on effective communication to achieve a level of success.
In the absence of effective communication and transformational leadership, organizational transparency is severely minimized, creating a less-than-optimal organizational culture state. Many organizational members can become culturally conditioned; that is, they are marginalized, undervalued, and unappreciated because of their position (which may not be consistent with a status quo), values, or beliefs.
As a result, business transparency is not realized. Instead, trust, appreciation, openness, self-confidence, recognition, inspiration, empowerment, and the ability to participate in organizational decision making is taken away from organization members.
Organization members are often micro-managed and instructed not to engage senior leadership with perceived challenges or solutions. Information is often not disseminated throughout organizations by management and leadership.
As a result, business transparency is eliminated, and the organization assumes a reactive posture. Many organizations that attempt to provide awareness of the organization’s mission, vision, and goals allow consistent behavior and focus on mission outcomes.
Interpersonal Communication Skills
A final inhibitor to business transparency is the lack of interpersonal communication skills by leaders, managers, and supervisors. Interpersonal communication skills are critical and core competencies for leaders and managers. Interpersonal communication skills contribute to business transparency, effectiveness, efficiency, and performance (an example is performance measurements for both the organization and employees; if defined properly, both written and verbally communicated visions and goals for the organization and employees can be reached with little to no ambiguity).
A challenge for many organizations is that the average person is ineffective when using interpersonal communications (Bambacas & Patrickson. The Government Accountability Office reported the Federal Government has concerns about government technology staff’s lack of verbal and nonverbal communication skills.
The Government Accountability Office further observed interpersonal communication challenges when reviewing the Federal Bureau of Investigation’s Trilogy project, the Coast Guard Deepwater Program, and the Veterans Administration doctor and patient relationships. The inability of organizational members to effectively apply interpersonal communication skills will inhibit organizational transparency and productivity.
Studies show that interpersonal communication skills are directly related to organizational performance outcomes. Wyatt reported that 46.5% of high-performing companies ensured their managers received formal interpersonal communication skills training to enhance their leadership competencies; however, only 18.3% of lower-performance companies did so. The Office of Personnel Management suggested that Interpersonal Communication skills are integral to organizational transparency.
Accountability and Strategy
Based on my personal, practical, and theoretical experiences at many levels within organizations (public/private), without organizational transparency, there can be no accountability and less than optimal performance expectations and desired outcomes.
An actionable executable strategy to mitigate inhibitors to transparency is the integration of enterprise business processes and policies that impact the enterprise. In the information technology community, the integration of enterprise business processes such as governance, enterprise architecture, portfolio management, capital planning, investment controls, and transformation leadership can assist IT within any organization and promote transparency of IT. Transparency is necessary at all levels of an organization to truly achieve outcomes that are beneficial regardless of the industry.
What Are Inhibitors to Business Transparency?
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