3 Reasons Why Organizations Need to Increase Transparency

By Oscar Berg (@oscarberg) Jul 5, 2011

In today’s increasingly connected, competitive and rapidly changing business environments, the individuals working within an enterprise need to be able to quickly access all relevant expertise and information, wherever it may reside, and trust it enough to act upon it. None of that can be done if organizations don’t become more open and transparent.

What transparency is about is hard to capture in just one sentence. It is about sharing all the information the receiver wants or needs, and not just the information that the sender is willing to share. It is about putting all facts on the table, even when some of them are uncomfortable. It is about being honest and open about what actions are taken, by whom and on what grounds. It is about enabling people to have conversations where questions can be asked and answered in open and honest ways, creating mutual understanding. It is about removing any barriers that hinder people from accessing the information they could need to be better at their jobs. It is about making people and their skills, knowledge and ideas visible and accessible to all their colleagues.

Typical symptoms of lack of transparency are sub-optimization, duplicate work, bad decision-making and inability to innovate. These things don’t just impact the bottom line results negatively — they also hamper an organization’s ability to compete and survive in the long haul. Here are three ways to avoid such a scenario from happening.

1. Make Information Actionable

The ability to act on information is what often separates successful companies from those less successful. Yet, many people don’t because they distrust information, often because they cannot confirm its accuracy, freshness or completeness. A study by AIIM in 2009 concluded that "52% of organizations have 'little or no confidence' that their electronic information is 'accurate, accessible, and trusthworthy'".

To trust information, people need to know who provided a piece of information and when. Information systems need to provide transparency by making it possible to trace a piece of information back to its author. By doing so, they also provide an opportunity for the user to contact the author directly to confirm the quality of the information, but also to ask for any additional information that is needed to act upon it. The information becomes more trustworthy and thus also actionable.

2. Avoid Unnecessary Risk Taking

We don’t expect openness and collaboration to generate what they do. We overestimate the risks. We underestimate the risks of closed systems and overestimate closed systems’ benefits."
James Boyle , chairman of Creative Commons

When there is no transparency within an enterprise, the work being done at different organizational units, teams or individuals is hidden from other organizational units, teams and individuals. So are ideas, knowledge, expertise, talent, and — most importantly — risk. When there is no transparency, some people tend to take risks they wouldn’t take otherwise. Many studies have shown that people who aren’t criminals are more inclined to steal if they knew they would get away with it. This kind of behavior is what ultimately led to the collapse of Lehman Brothers and the following heart attack in the global financial system, the credit crisis and the recession that followed and plagues us yet.

Many businesses worry about getting sued or prosecuted. The best strategy to avoid that is to avoid doing illegal and immoral stuff to begin with. In a transparent environment, it is possible to discover and put an end to any misbehavior and violations of policies or laws right away, before things get out of control. Knowing they wouldn’t get away with it, people would be less willing to violate any laws or cross moral boundaries.