Is Transparency the Key to Trust?

If I make the statement that “Transparency is the key to an organizational culture of trust,” most people will nod because it sounds right.  But is it really?      

I recently witnessed the rollout of a new health insurance plan at a relatively small company.  In line with the company’s stated value of being transparent with employees, the benefits team gave a very detailed explanation about the rationale for the change and walked through the complex calculations that determined the allocation of premiums between employer and employee.  Sounds good, right?  Wrong.  The tension in the room increased as the employees became frustrated with the complexity of the calculations and the reasoning that went into the decision-making process.  Even though the room was full of very smart people, it was too much easily misunderstood information.  Many employees left the room feeling less trust in their employer than when they entered the room, sure that something was being hidden within the complexity.  In this instance, even though the employer worked very hard to be legitimately transparent, the effort backfired.

After this incident, I began to think about the relationship between transparency and trust.  From a logical perspective, is trust necessary in a fully transparent environment?  Or, conversely, is transparency necessary in a fully trusting environment? 

Let’s look first at whether trust is necessary in a fully transparent environment.  According to Schoorman, Mayer and Davis (2007), “Trust is the ‘willingness to take risk,’ and the level of trust is an indication of the amount of risk that one is willing to take.”  These scholars proffer that control systems are another way to mitigate risk in a relationship.  Common control systems include such things as policies and procedures and independent audits.  An organization’s commitment to being fully transparent in communications with employees can also be considered a control system because the directive of transparency has become a policy.  These scholars go so far as to say that very strong control systems actually inhibit the development of trust to the extent that “trustworthy actions will be attributed to the existence of the control system,” not to the person or organization acting in a trustworthy manner (Schoorman, Mayer & Davis, 2007).  When taken to the extreme, trust is not necessary in a fully transparent environment.

Now, let’s examine whether transparency is necessary in a fully trusting environment.  The same group of scholars that talked about how control systems can inhibit the development of trust discuss three factors that contribute to trust in an organization:  ability (that the organization can do what is being promised), integrity (that the organization will do what is being promised), and benevolence (that the organization will act in the best interests of the recipient of the promise) (Schoorman, Mayer & Davis, 2007).  I submit that if these three factors are strong within an organization, the promise of transparency is not a critical component of employee engagement, or, in other words, transparency is not necessary in a fully trusting environment.

So when is transparency critical?  I believe that increased transparency is needed when ability, integrity, or benevolence are in question. For example, Facebook is currently undergoing a crisis of trust, both with its customers and its employees.  Not only has Mark Zuckerberg been grilled in televised congressional hearings, but Facebook leaders promised open lines of communication (Frenkel, 2018).    Transparency is essential at this point in Facebook’s history to overcoming distrust.

Is transparency the key to a culture of organizational trust?  While it may be a factor when it comes to rebuilding lost trust, over-reliance on the concept of transparency can actually diminish trust

References:

Frenkel, S. (2018, March 23).  Zuckerberg takes steps to calm Facebook employees.  The New York Times.  Retrieved from http://www.nytimes.com

Schoorman, F. D., Mayer, R. C., & Davis, J. H. (2007).  An integrative model of organizational trust:  past, present, and future.  Academy of Management Review, 32(2), 344-354.

Lorraine McCamley, MSOD is the owner of Boldly Quiet Consulting, specializing in retaining high-performing talent through executive coaching and organizational consulting.   Connect with Lorraine on LinkedIn or contact Lorraine directly at lorraine@boldlyquiet.com to start a conversation. For more information about Boldly Quiet keynote presentations and workshops, please visit boldlyquiet.com.