Transparency, Confidentiality, and How to Balance Both

Published On: January 3, 20226 min read

Transparency is essential to building trust in a business and maintaining a productive work environment. Forbes defines transparency as “the process of being open, honest, and straightforward about various company operations.” When done right, the process is designed to give employees the information they need to increase motivation and productivity in their role to contribute to the greater good of the company.

To experience the same benefits in your business, you must practice transparency with all stakeholders while balancing the confidentiality necessary to keep business objectives and long-term plans on track.

How Transparency Improves Your Business

As transparency has come into the spotlight, many business owners decide to dive in head-first and commit to instilling organizational transparency in their business—where they are now reaping the rewards.

Ray Dalio, founder of Bridgewater Associates, is an excellent example. He says radical transparency helped him grow his company into the world’s largest hedge fund. According to Ray, transparency works because it “allows everyone to express their thoughts about what’s going on, which enhances two-way communication, yields better ideas, and ties employees to the mission of the company.”

Studies have also shown that customers care about the transparency of the businesses they purchase from, with 94% of respondents saying they’d be loyal customers if the company offered more transparency.

In a transparent work environment, everyone benefits:

  • Leaders earn invaluable trust and honest communication from their employees. That means they can make informed decisions about the future of the business and feel confident their employees will be ready and able to execute those goals.
  • HR reps have a clear understanding of each of the different teams’ goals, values, and shortcomings. That means they can hire qualified members to fill detrimental gaps and strengthen the team dynamic.
  • Managers have strong relationships with direct reports from giving and receiving authentic feedback. That means they can address issues sooner, and their team members grow and learn faster.
  • Employees communicate better with one another. That means they can solve problems faster and develop innovative ideas to push the company forward.
  • Finally, customers and investors receive better service and insight. Because employees feel supported and respected, they’re comfortable admitting mistakes like misplaced orders or missing the mark on quarterly goals.

But transparency doesn’t happen on its own—it must come from the top.

What Happens When Transparency Is Out of Balance?

When transparency isn’t a business standard, its absence leads to a dysfunctional structure.

Employees quickly disengage, and their productivity nose-dives. Either that or they struggle with resentment and can sometimes create a hostile work environment.

When leaders lack transparency, they become out of touch and fail to connect the mission to employees’ day-to-day activities. This disconnect creates an unproductive environment where lots of “busy work” is done, but no meaningful results appear.

However, too much transparency can also create issues.

For example, when private one-on-one information is shared or broadcasted, transparency becomes a liability. Likewise, sharing information about significant changes like mergers can leave employees with more questions than answers and a whole lot of anxiety.

If you haven’t built the proper foundation of trust and respect, the “tell it like it is” mentality can make employees fearful and anxious about having their failures put on display. It can also lead to employees rebelling against accountability and creating a dishonest culture (playing the blame game, cheating the system, etc.)

No matter how well-intentioned you might be, without trust, confidentiality looks like secret-keeping, and transparency is assumed to be dishonest. As the leader of your business, you must balance transparency and confidentiality. The only way to do that is to lead by example and establish trust first.

Balancing Transparency and Confidentiality in Your Business: It’s All About Trust

You can only achieve a positive inverse relationship between transparency and confidentiality if you start with trust. After all, the goal of transparency should be ethical, not instated to achieve the desired behavior from employees.

Here’s how you can accomplish a healthy culture of transparency while also safeguarding confidentiality.

#1: Focus on Your Core Values

The key to establishing trust is to set expectations initially and stick to them.

Your company’s core values are a great outline of expectations and practices around transparency. If you relate your day-to-day actions to your core values, employees know what to expect from the get-go and understand when plans have to change.

#2: Keep Big Decisions Confidential Until You Have a Unified Action Plan

If you’ve got big plans in the works like a merger, acquisition, or extensive restructuring of the business, it’s best to establish a clear plan of action and sort out all the kinks before making that information public.

When change happens, employees will rightfully be concerned. So, if you want to keep the trust intact, you need a clear, unified action plan.

So, plan things privately, then share with employees when the time is right. The Align software can help you maintain confidentiality in communication, as you are able to customize which team members can see what information.

#3: Show Your Trust by Delegating Tasks

If you can’t let go and delegate tasks to your team, they’re never going to feel like you truly trust them. So, show your team you trust them to make good decisions by actually letting them do so.

Our software makes it easy to delegate tasks to your team members. And by aligning critical metrics to their new responsibilities, you can feel comfortable handing over the reigns.

#4: Encourage Feedback around Transparency & Anonymity

Trust is built on mutual understanding, so it’s essential to keep an open line of communication for employees and members to provide feedback.

Our eNPS surveys are a quick, effective, and consistent way to track your workers’ sentiment, enabling you to react quickly to problems or do more of what is already working. These surveys are a massive step in creating trust because they are anonymous—offering employees a chance to give honest feedback without fear of retaliation.

#5 Communicate Often and Effectively

We really can’t emphasize this enough. The foundation of trust is clear communication, so you should be talking with your teams consistently—in the good times and the bad times.

Asking for anonymous feedback through eNPS surveys is a significant first step. However, taking the next step to solicit feedback in person can help you build that trust and deepen the relationship between managers and direct reports. In-person communication also offers essential context that can sometimes be missed in surveys.

At Align, we help encourage communication with your teams by offering metrics-driven performance management. Our structure lets you quickly review day-to-day actions and metrics, giving you more time to check in on a deeper level.

Improve Your Company Culture with the Help of Align

The more employees know and feel included in business operations, the more encouraged they are to share the honest, essential feedback you need to overcome barriers and solve problems. And when everyone feels trusted and supported, they enjoy their work and inevitably work harder.

It’s time to put transparency and confidentiality to work in your business so you can spend less time overcoming issues and more time accomplishing your business goals.

Learn more about how our software can help you build trust and transparency in your business.

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