Are you open with employees? Are you transparent to your constituencies?

Openness: What you have to give your employees to get their effort

Those three questions, if taken as seriously as they should be, imply that the leadership of an organization will be forthcoming to employees about business or other strategies of concern and that they will make the important connection between the external circumstances that drive the behavior of the organization and the strategic steps the organization is taking to cope with those circumstances. …

Too often organizational leaders talk about strategy or future plans in isolation without discussing why they are taking the actions they propose to take. In fact, most companies are pretty good at talking about the what of their actions and lousy at talking about the why. Without the explanation of why, it’s inevitable that people will resort to speculation based on insufficient information. Most of the time that speculation is far from flattering about the leadership’s real motives or intentions. There’s just enough paranoia and suspicion in institutional organizations to fuel that suspicion, so leaders are well advised not only to offer a candid description of their plans and actions but also to make sure they explain and connect cause and effect …

Transparency: It starts with an attitude

In their new book Tactical Transparency, authors Shel Holtz and John C. Havens are not surprisingly long on examples and short on a specific definition. Transparency is relative.

But their examples are useful, and one anecdote about executive transparency makes a high water mark. It’s about the fine blog called “Running A Hospital,” written by Paul Levy, CEO of Beth Israel Deaconess Hospital, in Boston (http://runningahospital.blogspot.com).

From the book:

Levy … wrote a post about his salary titled, “Do I Make Too Much?” The post attracted a lot of attention in large part because the candid discussion of his income startled so many people. Levy’s salary was a matter of public record, but Levy went beyond that Massachusetts-required disclosure to expose the process Beth Israel Deaconess’s board employed to settle on his pay, something most leaders wouldn’t want to discuss unless they were forced to. But Levy asks, Why not? “These are nonprofits, they’re public institutions, they get public subsidies in the form of tax exemptions, they are publicly funded in terms of research and clinical care from the state and federal government. They’re every much as public a body as the government is in many respects, so why not tell people how decisions are being made?”

Every organization exists to one extent or another with the permission of the society that surrounds its headquarters building, that buys its products, that owns its shares. When thinking about transparency, executives should ask themselves:

How close to Levy’s open-kimono philosophy do I come? And where, and why, do I draw the line?