Transparency and Your Bottom Line

It’s the secret sauce of successful workplaces, but how do they do it?

“The single most important ingredient in the recipe for success is transparency because transparency builds trust” — Denise Morrison

In the same way that transparent windows let light in, a transparent business keeps information visible rather than hidden from sight. When properly put in place, transparency starts at the top from the managerial level and trickles down throughout the organization.

Transparency can mean many things, depends who you ask. For the sake of this article, we’ll dive into leadership transparency, as defined by Walumbwa, Luthans, Avey, & Oke (2011) as “leader behaviors that are aimed at promoting trust through disclosures that include openly sharing information and expressions of the leader’s true thoughts and feelings.”

Transparency can mean many things, depends who you ask


Schnackenberg, A. K., & Tomlinson, E. C. (2016). Organizational transparency: A new perspective on managing trust in organization-stakeholder relationships. Journal of Management, 42(7), 1784–1810.

Ok got it, sharing is caring. But what’s in it for me?

Leaders who successfully implement transparency in their organizations often reap great rewards.

Better alignment

Greater transparency gives employees the opportunity to see beyond their individual role and see the big picture. This often leads to greater feelings of inclusivity and alignment of the self with the business. As Hatch & Schultz(2001) found, “transparency contributes to identity dynamics by giving stakeholders access to the organization as well as exposing the organization to them.”

Chances are that the more an employee feels connected to the group, the more engaged and committed he will be. This is simply because they are more likely to care if they have a broader idea of what is going on and feel that they are a part of it.

Chances are that the more an employee feels connected to the group, the more engaged and committed he will be.

Creation of trust

Exposing employees to the inner workings of the company sparks the creation of trust. By sharing information, you are signalling to your employees that you value them, which in turn indicates that your actions are aligned with their best interests too. The more you make your employees feel valued, the more they will want to prove themselves worthy of that trust and align their behaviors with it.

Solve problems faster

Every person you share and converse with has their own perspective, opinions, thoughts, and ideas. Sharing both the good and the bad with employees can make them more inclined to take one for the team when times get tough.

And since subordinate employees are the ones on the ground interacting with customers and clients, you never know what input they may have to share with you that didn’t cross your mind. Who knows what you might discover?


You want it? You got it.

How to establish leadership transparency

Break down barriers with increased communication

Included among Deloitte’s CFO Insights’ essential steps for leaders was the suggestion that leaders should select as many relevant channels for communication as possible. Today there are a plethora of available possibilities, both in-person and in the digital realm, including newsletters, social networks, emails, weekly stand-ups, etc.

It’s up to leaders to make sure that they are taking advantage of all available modern channels. Establishing open communication channels ensures that everyone in the company knows where things stand, what’s going on, and who they can turn to if need be. Modern technologies make it significantly easier to share both big and small announcements across your organization, so make sure you’re leveraging it to your advantage.

Create a free flow of information

Think of traditional organizations as lakes and successful modern organizations as streams- traditional organizations tend to restrict information to senior management, whereas modern organizations tend to have a free flow of information.

While it depends on what kind of business you work in, in general high-performing organizations tend to make efforts to maximize group performance by sharing information and encouraging collaboration, sharing, and teamwork.

Select the right tools

20% of employees’ business time is wasted on searching for information. That’s a lot of time wasted on non value-added work. It’s a huge inefficiency, especially given that it’s so easy to address. Make sure employees know where to turn to in order to find the right information, contact the right person, and have their questions answered.

Moreso, provide workers with the right tools that support and organize the flow of information. DataRails is one such tool that can help increase transparency. By automating consolidation processes, employees no longer waste time on tedious work.

From management’s perspective, they gain access to real-time numbers, can identify who made changes and know when they were made. This instantaneous connection allows for the free flow of information, and more importantly encourages it, simply by making it so easy and effortless.

Transparent leadership is a choice. Keeping employees in the loop encourages trust and often comes alongside improved performance, but it’s important to keep in mind that laying the groundwork takes time. However if you choose to pursue this route, remember that while it may take time and effort, in the long run it pays off and bears dividends.

About DataRails

DataRails’ platform revolutionizes the way FP&A work is done. Our technology automates spreadsheet work that is all too often done manually, thereby saving you time and preventing errors. With DataRails’ FP&A solution you can save time, gain newfound insights, and finally have confidence in what your numbers are telling you. All this is done without changing the way you work on Excel so you can keep doing what you’re doing, but better.

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