The IABC Trends Watch Task Force identified and researched six key trends shaping communication in 2021 and beyond. Among communicators, the words “transparency,” along with “authenticity,” are more than slogans we put in into company messaging. At least, we hope so. This article presents research about how communicators must ensure that carefully crafted language does not get ahead of action. Read on to understand why this trend is relevant to IABC members, and download the full 2021 Trend Report here.

Definition of the Trend and Its Context

Radical transparency, or the art of creating an open culture where all opinions are welcome and all decisions are open to debate, may be seen as the cornerstone of building trust in institutions of all sorts, including corporations, nonprofits and governments. It is a powerful counterbalance to deep skepticism, an inevitable consequence of fake news and conspiracy theories floating around on the internet. If left unchecked however, radical transparency can inflict much damage, in particular in the workplace.

Potential Impact and Scope (Based on Scenarios)

The impact of radical transparency is both positive and negative. Done right, it has the potential to grow businesses, increase trust in public servants or financial institutions and boost employee morale. At its worst, it will encroach on people’s right to privacy and erode employees’ self-confidence.

In a TED Talk speech, Ray Dalio, founder of one of the world's biggest hedge fund firms, Bridgewater Associates, recalls the biggest mistake of his career and how it led to his change of leadership style. He transformed his firm from an autocracy, with him being the sole decision maker, to a transparent meritocracy, where associates would have access to all available information and be able to freely give their opinions. In his world, this means that a newly hired employee, fresh out of college, can potentially rate him, the CEO, very poorly on his performance at a company meeting, without fear of retaliation. The feedback, weighted against everybody else’s, helps the CEO to improve, adapt and, in the case of Bridgewater, win big.

Radical transparency, however, requires leaders to show a great deal of humility and vulnerability, traits that have not been the norm until now. In a scientific paper titled, “The Neuroscience of High-Trust Organizations,” researcher Paul J. Zak correlates vulnerability with the levels of oxytocin in our bodies. In other terms, leaders who care for their employees and genuinely look for their input in decision-making provoke a release of oxytocin in their entourage, making them more willing to cooperate, and thereby setting the foundation for a trust-oriented organization — the key factor being an authentic willingness on the part of the leaders to be “natural” and empathetic.

Critics of radical transparency, however, have equated it to brutal honesty, claiming that it could be perceived as harsh criticism and undermine one’s self-confidence or sense of belonging. Netflix, for example, has often been criticized for fostering an environment that is “ruthless, demoralizing and transparent to the point of dysfunctional.” Prominently displayed on Netflix’s website are their maxims, showing how the company’s full embrace of radical transparency (maxims 1-3) could potentially lead to a culture of doubt and unhealthy competition (maxim 4-5):

1. Encourage independent decision-making by employees.
2. Share information openly, broadly, and deliberately.
3. Are extraordinarily candid with each other.
4. Keep only our highly effective people.
5. Avoid rules.

Who Will Be Most Directly Impacted?

This is why boundaries should be drawn around radical transparency. Most importantly, privacy should not be sacrificed at the altar of transparency. According to Ethan Bernstein of the Harvard Business Review, too much transparency could “distort behavior instead of improving it.” If people feel observed in their every move, they may start to go to great lengths to hide their ideas or process improvements, potentially at the detriment of their colleagues and the organization at large, only to bring them up at a crucial moment in the quest for self-promotion. This would create a highly political and unhealthy environment where every person’s move is watched and possibly used for the benefit of self or others. Bernstein proposes the following boundaries to create a transparent framework that will encourage innovation and productivity:

1. Allowing privacy within team boundaries: By keeping radical transparency within teams, members are more likely to open up and share their ideas in an authentic way.
2. Keeping feedback and evaluation separate: By making a clear distinction between data used to improve processes, products or people’s skills, and information used to evaluate employee performance, less time is spent on pretending, and fear of retaliation may be curbed.
3. Decision-making versus improvement rights: While decision-making is the privilege of a few, improvements rights should be awarded to a broader part of the organization, regardless of roles.
4. Experimenting for a predetermined amount of time: Giving employees total freedom to explore, experiment and think during a set amount of time allows them to make the most out of their window of privacy for the benefit of the organization.

Why Is the Trend Relevant to IABC Members?

As we have seen, transparency must be authentic and multi-directional, and set within clearly defined boundaries to allow for individual privacy. What does it mean for communicators?

As communication professionals, we are expected to both facilitate the communication links between all parties and promote the company’s products and services (in the case of external communicators) or mission and values (for internal communicators), and they may be contradictory. Our role then is to reconcile both and create a narrative that aligns an organization’s product or mission with the authenticity sought after by its various audiences — and essentially become a trust agent. (See trend No. 4 regarding communicators as the ultimate integrator of the human experience.)

The 2018 study by The Brand & Reputation Collective explores the impact on communicators of socio-economic uncertainty: “In order to build trust and support with stakeholders and consumers, [communicators] are or plan to be listening more, ensuring their words and deeds are consistent, and speaking in a more human way.” This, however, may prove challenging if the leaders are not on board.

What Do IABC Members Need To Know and Do by Audience?

It is then incumbent on us as communicators to coach the leaders and managers of the organization or institution we advise, and request they live up to the authenticity value not only with their words, but with deeds and appropriate distribution of resources. More specifically:

Employees

Internal communicators must help management define what radical transparency means for the company, and set the parameters for the boundaries. Being transparent with employees means informing them of everything happening in the company as soon as they happen, and answer their questions candidly, even if we (or the leadership) do not have the answers. It does not mean that all data should be shared with employees. It is our duty to partner with the leadership and other departments to draw a clear line between transparency and privacy.

The other key factor in building transparency is listening. Knowing what matters to our employees will guide our communications and steer management in the right direction.

Customers

Being transparent with our customers is a trust-building exercise. It allows us to cement our relationships, increase customer loyalty and potentially bring in more customers. For example, if a support center has been overloaded to the point of not being able to answer customer calls, the right thing to do is to send them a letter acknowledging the issue and spelling out the steps that we are taking to remedy it. Customers will be thankful that we took the time to apologize and they will be more likely to forgive our organization’s mistake, as long as we keep our word.

Community Stakeholders/Partners

For the communities we do business in or with, nothing will speak louder than deeds. It is not enough to assert that we are taking steps to reduce our environmental footprint, for example; we must show them. It then becomes the community relations communicator’s role to provide the details of the steps our organization is taking toward the environment or other issues dear to our communities, and to be proactive in showing our progress at regular intervals.

Influencers/Media

As an influencer, transparency is personal. There are so many well documented cases of personalities losing their clout, even their job, because of trying to bury or cover up personal matters. Because the lines between our persona as a personality and our real self may be blurry to the point of total loss of privacy, we should assess the legal, social and economic implication each time we go public with our personal lives.

Government/Regulators

Arguably, honesty and transparency have not been the forte of politicians who are generally too focused on getting reelected. In recent years however, more and more are starting to understand that being transparent may be the key to winning the trust of their constituents and their elections. In Taiwan, for example, the digital minister has set the standards for political accountability by using radical transparency as a tool to force the discussion in favor of public interest instead of private interest. Using Taiwan as a model, communicators in the public space have a critical role to play in our democracies to refocus public debate and regulations on the people they serve.

Investors

As investor relations professionals, we have a tough job ahead of us when it comes to convincing our leaders to be fully transparent. Without divulging financial information that may lead to insider trading or change the trend of a particular stock, we may have much to gain by ways of transparency. As controversial as Elon Musk may be, his approach to the announcement of Tesla’s quarterly results could be emulated for the sake of transparency and honesty. On the other hand, his regular tweets about the car maker’s stock value could rightfully be perceived as suspicious, to say the least. Today, we have an opportunity to bring more honesty and transparency in the financial world by purposefully driving change through a messaging strategy that ties results to our organization’s role in its community and society at large.

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