Transparency has become one of the most popular demands in the recent years and for good reasons. Not so far ago, we went through one of the biggest global financial crisis, caused by large investment groups and credit rating firms hiding the real risk of financial products to their clients. Another example closer in time, just a few months before this article being written the ICIJ has revealed the Panama Papers scandal, exposing hundreds of world leaders, celebrities and businessmen’s dirty secrets.
Despite society’s urge for transparency, I believe there isn’t a clear understanding of what we mean and expect from it, specially when we discuss transparency outside of the public sphere: things turn more complex when we try to apply the same principles to the management of private corporations. Although some essays have been written on management theory regarding transparency on the organization, there is still a vague understanding of what exactly it implies and how it can be put into practice.
When neither transparency, nor the conditions required for applying it, are properly understood, the expected benefits of increased productivity and more commitment from employees are not met. An interesting example of this misunderstanding is an article published a couple of years ago on the Harvard Business Review called The Transparency Trap.