With the ever dropping cost of starting a company, the business environment is becoming increasingly competitive. In the UK alone, a new company is registered once every minute. Startups pose a great threat to established organizations. It used to take a typical Fortune 500 company 20 years to grow to a $1 billion market capitalization. Today’s startups like Tesla, Uber and WhatsApp achieved this in less than 4 years (SnapChat and Oculus Rift in less than 2). Consequently, the average lifespan of an S&P 500 company has decreased from 67 years in the 1920’s to 15 years today. Regardless of age or size, the need to stay ahead of the curve has never been higher. And it’s transparency that could help you take the lead.
The key resource for any organization is talent. Companies struggle to find great people and when they do, they have a hard time keeping them onboard. Managing talent isn’t easy either. We believe strongly that transparency on goals (or OKRs) can help you find, retain and utilize talent while simultaneously increase job satisfaction rates. Here’s why:
One definition of engagement is “being emotionally involved or committed”. As it is hard to be emotionally involved in a relationship without knowing the other person, it is likewise hard for an employee to be engaged without knowing the organization. Meet any new person and you’ll be presented with “What do you do?” within the first few minutes. Yet many companies don’t share with their people what the company does. A shocking 58% of employees is not even aware of the mission and vision of the company they work for.
If you realize that workers are becoming more and more purpose-oriented, that statistic sounds even more alarming. The number of workers that see themselves as purpose-oriented has grown already to almost 30%. Organizations should welcome this trend: research by Imperative shows that purpose-oriented workers are consistently “the most valuable workers”.
People in general, especially purpose-oriented ones, have a deep-rooted need to feel part of something greater than themselves. Satisfying this need forbelongingness will increase engagement and unlock potential. Companies should therefore be more transparent on their mission, vision and goals. With 70% of the people feeling NOT engaged at work, this could even turn into a strategic advantage.
Imagine you’re participating in a rowing boat race. Everyone in your boat is blindfolded, you cannot hear or see a thing. In the competing boat however, no one is blindfolded. Who is more likely to win?
Right. Because the people in the other boat can see each other, they can align their efforts which will give an exponential boost to their joined efforts.
Yet many companies behave like a blindfolded rowing boat. The larger an organization grows the more departments and teams grow into silos. Gillian Tett, Managing Editor of the Financial Times, devoted an entire book to the destructive effects coming from this so-called silo effect.
Making individual, team and departmental goals visible to the rest of your organization allows everyone to see what others are working on. This way it enables them to align their own efforts with those of others, increasing the clout of your organization exponentially.
More than 70% of employees feel managers do not spend enough time explaining goals. When these same people are asked what is holding back their company, 50% point the finger at a lack of company-wide transparency. Why do they feel it’s holding back the company? Because they know it has a demotivating effect on them.
As said, transparency enables alignment. We’ll talk more about alignment in future blog posts but a key benefit is showing people why they are doing what they do. It reduces the need to explain goals (OKRs) to employees as they can see themselves the bigger picture and how they fit into it. The power of Why is fantastically explained in this video by Simon Sinek, the bottom line being that it inspires action. It motivates people.
Even without alignment, transparency can boost motivation. Sharing what the company, department and team goals are – and thus where the company/department/team is heading – allows people to identify with them and do their best to help realize those goals. Employees will relate their work to the higher level goals anyways (provided they can see them), as humans are designed to look for causal relationships. It helps them understand the world around them.
At Perdoo we are a strong proponent of transparency and have made it a key feature of our culture and product.
This is what we do to keep transparency high:
From this we’ve experienced first-hand how transparency helps keeping your team engaged, motivation high and ultimately results in more joy and success – both for your customers and your company.
The sum is that transparency boosts performance and at the same time increases employee happiness. A study by TinyPulse even listed internal transparency as the number one contributor to employee happiness.
Transparency has become a necessity for the modern, inspiring workplace. Neglecting it can come at high costs, while taking it seriously can provide enormous benefits.
How does transparency fit into your organization? If you don’t know it’s time to figure that out. Share your story below. Our team reads and replies to every message.