Transparency not as effective as you think

by Cameron Edmond27 Nov 2013

Open plan offices are becoming the standard layout in most corporate environments – but before embracing this type of floorplan in the belief that it fosters and open and transparent culture, experts have urged white-collar employers to look to the manufacturing sector. Toyota Motor Co’s mantra to “use visual control so no problems are hidden” sounds ideal – but is it?

Ethan S. Bernstein, assistant professor at Harvard Business School, has revealed that observing your staff doesn’t necessarily mean you are getting the full story, and that decreased observation can increase productivity.

Bernstein discovered this when studying a manufacturing plant in China, where the workers assembled mobile devices under close supervision, Harvard Business Working Knowledge reported.

Visibility was achieved through identical assembly lines placed close together, with the goal for managers to observe workers for innovations in the process, which they could then instruct other workers to replicate.

To test this, Bernstein hired five undergraduates to act as new employees – living in the factory dorms and working on the floor.

The undergraduates soon found that the innovative ways to complete tasks faster and increase safety were only carried out by employees when a manager wasn’t present. When the manager returned, productivity would slow as all employees reverted to the standard way of doing things.

This stemmed from the misconception by employees that deviating from the process – even if it made things better – would anger managers.

"Even if we had the time to explain, and they had the time to listen, it wouldn't be as efficient as just solving the problem now and then discussing it later. Because there is so much variation, we need to fix first, explain later,” one employee said.

From this, Bernstein deduced that in some cases what management sees is a ‘show’, and not the way things are really done. As such, by watching employees more closely they are not truly seeing how things are done as it results in secretive behaviour; he refers to this as the ‘Transparency Paradox’.

"We assume that when we can see something, we understand it better," he said. "In this particular environment, and perhaps many others, what managers were seeing wasn't real. It was a show being put on for an audience.”

However, there are virtues to a transparent organisation in many cases. Oscar Berg, contributing author to CMS Wire, highlighted the following three advantages to becoming more transparent:

  • Information becomes actionable. Having reports and information is one thing, but it is difficult to act on if there is no proof. If the accuracy, freshness and completeness of information can be confirmed due to a greater understanding of what goes on amongst employees, then it becomes easier to take appropriate action.
  • Avoid unnecessary risk taking. A lack of transparency can mean the work being done is hidden. This can result in different business units taking risks they think are appropriate, but could actually be avoided if they were aware of the ideas, knowledge or talent prevalent in other parts of the organisation.
  • Enable sharing and collaboration. Further to the last point, a more open and transparent business makes it easier for ideas to be shared. Information and people can be traded between business units in a more open setting, fostering a culture of collaboration.
Bernstein acknowledged transparency may work for some organisations. "I would never suggest that what works in one setting is necessarily going to work the same way in another … the message actually that's more important to me, which should be more important to managers, too, is that this race to full [transparency] of everything can have unintended consequences."


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