How does an organization create an open culture? It must start at the top. In fact, the authors believe that leaders should aspire to a "no secrets" policy. Some CEOs, such as Whole Foods' John Mackey, make employee's pay public. Unfortunately, Mackey's embrace of transparency did not stop him from masquerading under a pseudonym to make derogatory posts about rival Wild Oats on an online stock forum, while championing his own company. Impossibly, Mackey did this for many years. His apologies when he was caught, along with the good will he had built up with his employees and shareholders prior to this episode, enabled him to survive this crisis.
Transparency can have a positive impact on the bottom line. Some companies practice open book management-the sharing of financial information with everyone in a company, combined with taking the time and effort to explain what that information means and how employees contribute to a company's financial success. A 2005 global survey of corporate transparency, cited by the authors, found that the 27 U.S. firms that appeared among 34 most transparent companies beat the S&P 500 by 11.3 percent between February 2004 and February 2005.
"Transparency is a choice," the authors say and a good one at that. Openness says a lot about an organization and goes a long way toward attracting and keeping the best employees and building customer loyalty. That's a competitive edge that all companies should strive for. But leaders who listen will not rise to the top without a change in the behavior that our society rewards. The authors' research shows that executives are often chosen for their ability to compete with the other members of the executive suite rather than for their teamwork. Changing that, they say, rests on the shoulders of boards of directors who are responsible for selecting the next generation of leaders.
Content reprinted by permission of Jossey-Bass. Excerpted from Transparency: How Leaders Create a Culture of Candor by Warren Bennis, Daniel Goleman, James O'Toole with Patricia Ward Biederman. Copyright (c) 2008 Warren Bennis, Daniel Goleman, and James O'Toole; All Rights Reserved.
Also of interest:
Book: Full Disclosure: The Perils and Promise of Transparency by Archon Fung, Mary Graham and David Weil, paperback edition published by Cambridge University Press, July 21, 2008. An analysis of the transparency of 18 U.S. and international policies.
Book: High Performance with High Integrity by Ben W. Heineman Jr., published by Harvard Business School Press, May 2008. Heineman, GE's chief legal officer and a member of Jack Welch's and Jeff Immelt's senior management teams for close to two decades, provides a blueprint for doing well in today's high-pressured global economy.
Book: Conspiracy of Fools: A True Story by Kurt Eichenwald, paperback edition published by Broadway, December 2005. Financial journalist Kurt Eichenwald tells the whole story and nothing but the whole story of what went wrong at Enron.
CIOZone Question: How open is your company? What are its best and worst practices?
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