“Radical Transparency” offers organisations a leading-edge over rivals in the recruitment and retention of millennials, but it’s not without its pitfalls.

With employment at a record high, competition among employers to attract the best and the brightest is heightened. How to appeal to and retain that talent, however, is more nuanced than it might seem. Cash is not necessarily king.

Divergent priorities
A 2018 study by LinkedIn into workplace culture found that while strong workplace benefits, including paid time off, parental leave and health insurance were important to all employees there was a notable divergence between the priorities of baby boomers and millennials. For younger joiners (those between the ages of 22 and 37) remuneration was less of a priority. Nearly nine out of ten (86 percent) millennials said that they would take a pay cut to work at a company whose mission and values align with their own (compared to only nine per cent of those aged 54 to 72). For younger workers, working for an employer that is open, transparent, shares a similar moral alignment to their own, and that delivers a positive impact to society were key priorities.

These contrasting priorities between older and younger workers are made more significant given the growing proportion of millennials in the labour market.

Radical transparency
The concept of ‘radical transparency’ has attracted recent attention, both in marketing products and services to younger consumers, while also fuelling a more dynamic corporate culture. The concept sees the adoption of actions and approaches that ‘radically’ increase the openness of organisational processes and data. This heightened transparency can be applied to organisations as a whole or to specific areas from staff salaries to performance reviews to supply chains.

Fortune magazine showcased a recent example last month with the news that technology giant, Cisco — in a bid to foster a more “conscious” working environment — has taken the unprecedented step of revealing to its workforce how many employee complaints it had received recently. It disclosed that instances of unwanted touching, inappropriate behaviour by a female executive, and use of the N-word, had all taken place in the company’s workplace. Without disclosing those involved, cases were discussed in greater detail while explaining how the company dealt with each instance.

In Cisco’s case the objective was to develop understanding about the complaint process and to make it easier for others to speak out. Following the presentation, the number of complaints actually increased with staff purportedly feeling more at ease disclosing incidents.

Cisco is not alone. Netflix, FitBit and Patagonia have each embraced the concept in various forms.

In Netflix’s case the company embraces “freedom and responsibility”. Employees are empowered to use their own discretion and have greater autonomy to decide when they take holiday, whether they fly business class and whether to expense an Uber ride home. Almost all employees are granted access to sensitive information, including contractual terms for Netflix’s production deals. Executives at director level and above can see the salaries of every employee. The company also encourages staff to give blunt feedback to one another. The company doesn’t simply see this as an edgy culture geared towards reeling in millennial joiners – rather, it sees it as a key ingredient in fuelling the company’s phenomenal growth.

Beyond Silicon Valley
The view that greater openness and transparency with team members offers benefits in terms of appealing to new and existing workers while also delivering benefits to the business more broadly is gathering pace.

Philanthropist and billionaire investor, Ray Dalio, has embraced the concept viewing it both as an integral driver behind the success of Bridgewater Associates which, under his stewardship, has grown to be the world’s largest hedge fund with $160 billion in assets under management.

At Bridgewater, Dalio has fostered an unconventional and confrontational working environment underpinned by a belief in ‘radical transparency’ that is reflected in a strict set of over 200 ‘Principles’ or rules for staff to follow. These rules see rigorous staff feedback conducted in front of co-workers, while all staff are required to evaluate peers and supervisors with ratings fed into each employee’s permanent record.

For those that can stomach this unconventional approach, it’s embraced. Proponents argue that as a result of the firm’s workplace philosophy it is free from office politics and gossiping and actually helps foster good interpersonal relationships.

No quick fix
Irrespective of the claimed virtues of enhanced transparency, it’s no magic bullet. Making a toxic working environment more transparent may help diagnose issues and challenges, but it also requires impetus and leadership to remedy those problems. Failure to do so by leaving issues to fester is likely to exacerbate an already fractured corporate environment, which will do little to boost your appeal in the eyes of potential workers and customers.

I met two law firms in the same week, recently. One was a pre-eminent New York “white shoe firm”, the other a global top ten firm. The CIO of the New York firm could immediately see the benefits of using radical candour and transparency but commented “this would destroy us!”. The larger global firm took a completely different perspective, keen to create a much more transparent and collaborative environment not only internally but also with clients, and at the cutting edge of data analytics to identify opportunities and weaknesses in real-time.  The latter firm are working on getting all 3,000 of their lawyers to start the process of real-time feedback and ratings at individual, team and company level. 

Transparency need not be a binary ‘on’ or ‘off’. It should be treated as a sliding scale with different aspects of your organisation embracing degrees of transparency at faster rates than others. 

Radical transparency offers enormous potential rewards, both in making organisations more appealing to younger staff while also fostering driving corporate and team performance, but its implementation should be considered, giving users and teams control of who gets to see what.  That way, you can create a high-performance culture of radical transparency, underpinned by psychological safety.

Ab Banerjee, CEO and Founder of ViewsHub