Openness and transparency are increasing trends in the business world. It's not just for small businesses like our Avoin yritys (Finnish for Open Company): the big ones are also adopting more transparent strategies, be it openness of leadership, innovation, or communication. This is not simply just because people have developed a sudden urge to change the world for the better: instead, with the rise of new communication methods and the social web, companies have realized that the open way is also often good for business.
When companies strive to be more open, a logical question arises: what is the correct amount of openness? Does openness have limits, and if so, where are they? Are there situations where being open causes more damage than good? We'll tackle these questions by comparing the benefits and possible problems related to openness.
Benefits of openness
A better relationship with employees. Leadership can be defined as trying to get the best performance out of people. Openness is a great way to promote that. People are smart. If you communicate with them openly about the company’s strategies, values, and just generally what is going on, they feel like they are being treated as equals, which often results in increased productivity. Furthermore, it's very common in companies that the left hand does not always know what the right is doing, which results in wasteful duplicate work that is avoided by transparency. Moreover, the organizational structure can be a lot lighter as layers of bureaucracy put in place to seal "classified" information can be removed. No more NDAs (Non Disclosure Agreements), privacy policies, and stalking your employees. Netflix is a great example of a company that has achieved tremendous results with their open "freedom & responsibility" culture.