Here’s one way to improve transparency, but more communication is probably better. (AP Photo, The Winchester Star, Jeff Taylor)

A lack of transparency results in distrust and a deep sense of insecurity – Dalai Lama

Recently, we had the pleasure of hosting Indra Nooyi, chief executive of PepsiCo at the Robert H. Smith School of Business. In her comments to us, she talked about many characteristics of effective leaders, and one of them was the importance of having strong communication skills and being transparent to employees. If you think about it, the lack of good communication is probably one of the largest reasons why there are morale or voluntary turnover problems in an organization. Talk to any leader or employee and you will discover a disconnect between what leaders think they are communicating and what employees say they are hearing.

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What do we mean by transparent leadership? Essentially, it means there is clear and consistent communication and a commitment to creating an open, honest, candid workplace with trust at the core of the culture. If employees don’t know what is happening around them, they have the tendency to misunderstand or misread the leaders’ intentions and possibly think the worst. Rumors take the place of facts. As authors Gostick and Elton noted in their book “All in: How the best managers create a culture of belief and drive big results,” “people inevitably build a backstory for leadership decisions, and whether they trust you or not is the most significant determiner of whether that story will be positive or negative. In the workplace, only 36 percent of employees believe their leaders operate with integrity and honesty. And the number one reason employees say they act unethically is because their boss models that behavior for them.”

When a firm does not have trust or transparency, not only are there employee problems (low morale, productivity, commitment and loyalty), but also employees will undoubtedly pass that along to their clients or customers by treating them poorly. On the other hand, firms with a transparent culture are more successful since employees feel free to come up with more creative solutions, they share issues before they become major problems, and they are more engaged, motivated, and productive at work.

So, what can leaders do to ensure there is effective communication in the organization?

• Help employees see the larger picture of what is happening in the organization.

• If you share information with your managers, make sure they are also sharing the information with their employees. Leaders often think that information is being cascaded down, but then discover that employees never got the message or got something else entirely. Usually they discover this when employees bring up complaints about not knowing what is going on. To be effective at cascading communications, leaders need to make sure that everyone leaves a meeting knowing exactly what they will tell their people, and those managers need to communicate the message in a timely manner, preferably face to face.

• Make sure all senior leaders are “on board” with a message. If they aren’t, there will be inconsistencies in how things are being communicated to employees.

• Meet directly with employees on a quarterly basis to address any gaps in communication. Ask for their input as well. Now, more than ever before, employees want to actually see leaders so they can read their nonverbal expressions when they share news. Not only are they looking for the facts; but also how sincere the leader is.

• Use a weekly e-mail newsletter or another similar mechanism to share information to all employees so they are hearing it directly from the top.

• Overcommunicate the message over and over and over and over and over and over and over again. Lencioni, author of “The advantage: Why organizational health trumps everything else in business” says – employees won’t believe what they have heard unless it is consistently repeated seven times. Yet, as he notes, leaders often only share their message once, assuming people will get it the first time or they will get insulted if you keep repeating the message. But often employees don’t get it; hence leaders need to become “chief reminding officers” and keep repeating their message in different situations so that employees can emotionally internalize the message. Or, they need to also have other leaders share the same message so employees hear the same thing from multiple sources.

• When sharing information with managers, prepare them to address tough questions from employees. Otherwise, they may offer glib responses such as “that’s the way it is; the boss said so” which can really damage trust in senior leaders.

• Set up upward channels of communication. Periodically collect feedback from employees through focus groups, surveys, etc to learn what’s on their minds. Make sure they are able to share this feedback in a confidential and anonymous way. As issues are being raised, make sure to note these so you can come back to addressing them later to show how you are handling them.

• Be consistent in the messages you are sharing with different audiences.

• Follow through on commitments you make. This builds trust with employees.

• Involve employees in the decisions that affect them. Have them be part of the decision-making if possible.

• Face the facts head-on even if the facts will be tough to hear. Suppose you have budget cuts, it is better for employees to hear it directly from the leader than to hear it from rumors.

• Admit when you are wrong and apologize when you make mistakes. No one is perfect and employees will appreciate your honesty.

• Keep employees posted when news comes in, whether good or poor.

Creating a transparent culture is not easy, and it needs to be something that is continually worked on by all of us. This will go a long way to ensuring that there is transparent communication at the organization.

Joyce E. A. Russell is the vice dean at the University of Maryland’s Robert H. Smith School of Business and the Director of the Executive Coaching and Leadership Development Program. She is a licensed industrial and organizational psychologist and has more than 25 years of experience coaching executives and consulting on leadership and career management. She can be reached at jrussell@rhsmith.umd.edu.