Transparent Leadership: Build Trust and Boost Engagement
Moving from reactive transactional HR to strategic proactive People, means that transparent leadership is essential for building trust, improving employee engagement, and fostering a high-performing team. Employees want open communication, honesty, and clarity from their leaders with clear expectations for success. Without these crucial elements all working in perfect cohesion, engagement can nose-dive, productivity will suffer, and you will likely see retention rates drop.
“Research shows that businesses with transparent leadership report higher employee trust, increased job satisfaction, and better overall performance.” Read more on the Harvard Business Review.
But what exactly does transparency in leadership mean in context and how can businesses effectively implement it to drive success?
How transparent should you be with your team?
Transparency in leadership is all about making sure you are encouraging an environment where your team feels valued, included and recognised. But it doesn’t mean oversharing or revealing every detail of business operations! The magic dust lies in strategic transparency – giving people the information they need to do their jobs effectively, feel secure in their roles, and stay engaged in the company’s vision for success.
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Why transparency matters more than ever
Without a doubt, Covid has changed all working norms and dynamics, and as a result employees now expect more visibility and input into decision-making. Whether it’s a shift in business strategy, financial uncertainty, or structural changes, your team needs to understand what’s happening and why. A lack of transparency breeds uncertainty, which leads to chitter chatter and speculation, potential disengagement, and a spike in turnover.
Research shows businesses with transparent leadership report better employee trust, increased productivity, and better overall performance. People don’t just want to be told what to do; they want to understand the ‘why’ behind leadership decisions.
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Striking the right balance
Transparency doesn’t mean airing every issue or sharing every minute detail with employees that are unnecessary. It means communicating with clarity and intent. Leaders should focus on sharing:
- Company vision and strategy: Employees need to know where the business is headed and how they contribute to its success – this is why commercially focused HR is so important.
- Organisational changes: Whether it’s hiring new talent, building development schemes, or amending policy, keeping your team in the loop is key to ensure changes are communicated properly.
- Performance updates: Whether good or bad, employees appreciate honesty about how the business is doing. It is essential that you communicate the plans for the future as well as the progress of how the business has performed!
- Decision-making processes: Giving insight into how and why leadership decisions are made ensures people feel they have a voice, they are recognised and feel that they have a place in your business.
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The dangers of a lack of transparency
When leaders withhold information or provide vague, inconsistent messaging, employees fill in the gaps with their own assumptions. This leads to misalignment, disengagement, and even distrust.
Consider the impact of leadership that lacks transparency:
- Employees may feel disconnected and unmotivated.
- Uncertainty can lead to increased stress and decreased productivity.
- Trust in leadership declines, making it harder to build a strong, unified culture.
On the other hand, when employees understand the bigger picture, they are more likely to feel ownership over their roles, which leads to better productivity, performance and overall business success.
How to build a culture of transparency
It’s not enough to say you’re a transparent employer – you have to genuinely embed it into your leadership approach and the values in your business. Here’s how:
- Encourage open communication: Implement ideas and initiatives that build on your culture where employees feel they can ask questions, raise suggestions, and offer feedback.
- Communicate regularly and consistently: Whether through memos, announcements, monthly All-Hands, one-on-ones, or digital platforms, leaders must ensure employees are part of the journey and feel heard.
- Lead by example: Leaders set the tone and they drive the values and the core of your business. If you want an open and transparent culture, you need to model it!
The role of HR in transparent leadership
HR plays a crucial role in embedding people and culture strategies that encourage and prioritise transparency, values and culture. HR consultants, particularly those that are experts in supporting small businesses, can help leaders develop communication strategies that align with your values and expectations to drive your commercial goals.
What next?
If you’re not quite ready to commit to a retained People support service but still want to see how strategic HR can transform your business, why not start with the People Power Hour? This focused, one-hour session is designed to tackle your most pressing People challenges and provide actionable solutions – ideal to fix your current business challenges and needs.
Whether you’re stuck bringing your values to life, need guidance on reviewing performance regularly, or want to brainstorm ways to enhance your culture, the People Power Hour is the perfect opportunity to get expert advice.
By partnering with exhilHRate for your People support, you gain more than an HR service provider or a bolt-on HR function. You gain a strategic partner who is deeply invested in the success of your business, your people and you as a business leader!
