Have you ever wondered why your manager hides certain information from you?
Imagine you are a founder of an early-stage startup. You run into a situation where you don't have enough cash to run payroll next month. As a leader, you can either share this information with your team members, not share till they ask or do nothing. Your team members put a lot on the line to join you and don’t share much of a financial upside if things do go well. You owe the transparency to them. Doing nothing is taking the path of least emotional resistance. It erodes trust in the leadership. I've met startup employees who would never work for a founder they worked with in the past. These are the consequences of being a bad leader.
Telling your team you don't have money to continue paying them can feel scary. To be able to share this with your team is hard, but a win-win proposition. It helps your team build confidence in leadership that shares hard truths. The emotional process you undergo will make sharing hard truths easier for you. A side effect of this is that your team will reshuffle. If someone believes in your company's mission, they will double down on your company. If they have doubts, they will leave. This helps cement the culture of openness and transparency in your founding team.
Let's say you decide to not share anything about the poor financial situation. You get lucky and you find that paying customer for closing your next round of funding. Everyone on your team is happy. Your team size doubles. In a few months, the same customer is unhappy with your product. What do you do? There were no consequences of not sharing important information last time. You don't share anything again, this time with double the team size. You have now cemented a culture of not sharing hard truths with the team. Looking up to you, your leadership team does the same thing with their teams. Over time no one in your organization is sharing hard truths with each other. Those who do, look like outsiders in your organization. The growing information gap about hard truths will lead to an ineffective organization. Everyone will be second-guessing their leadership, peers and managers.
You can’t develop genuine character and ability by sidestepping adversity and struggle." - Daisaku Ikeda
Transparency is about treating people right. Leadership is about decision-making under ambiguity. Values guide your thinking in ambiguous situations. The value of transparency helps people share their true opinions. Leading with transparency is not easy in a large number of organizations. Let's challenge ourselves to building organizations of greater transparency. Here's a quote that has served me well in my challenges with transparency. "Rise to the challenges that life presents you. You can’t develop genuine character and ability by sidestepping adversity and struggle." - Daisaku Ikeda. A culture of transparency is hard to build. Anyone can start creating a culture of transparency. A good starting point is to start writing down the decisions you make and how you made them. People will notice how you take the messy glue of human emotions and transform it into a great culture.