According to Merriam-Webster's dictionary, "transparency" denotes an individual or system that is "free from pretense or deceit and readily understood." And research from SUNY New Paltz (as communicated through the ASTD Benchmarking Forum), found that "business areas, including accounting, ethics, and negotiations, further define transparency as the access to information regarding decision-making," and "the existence of policies and processes that are open and visible."
In terms of business management, corporate transparency has received its share of public attention in recent months. In the face of today's competitive business environment, economic challenges, and the ongoing war on talent, the topic of talent management transparency inspires lively discussion among HR and learning professionals. For purposes of this article, transparency can be thought of as the extent to which an organization openly shares or communicates its talent management processes (for example, succession planning or critical talent) and process outcomes (such as successors and high potentials) to its employees.
Steelcase, a manufacturer of workplace environments, has gotten an early start on addressing this issue. Operating as a research-based provider for global work environments that includes businesses and healthcare and education spaces, Steelcase recognizes that an understanding of human capital transparency has implications not only for its internal operations, but also for the way in which it serves customers.
Steelcase's workplace solutions must align with customers' differing methods of operation and culture. In much the same way, organizations must determine the level of transparency that works best for them.
"I am convinced it is important for companies to have clarity with regard to talent management transparency," says Steelcase CEO Jim Hackett.
"Some may lean toward a philosophy of nontransparency while others may be very transparent. There is no right or wrong place along this continuum because an organization's stance depends upon its industry, culture, corporate values, and business model.
"The point is for the organization to be authentic and align the level of disclosure with what the organization can support."
With the support of this belief, a team from Steelcase composed of the vice presidents of global human resources and learning and development, and the director of global workforce strategy began their due diligence to serve up a Steelcase point of view.
This perspective would be one that best fit the organization's philosophy for bringing accountability and authenticity into talent management and leadership development. In addition to corporate visits and independent networking, ASTD became an important conduit in Steelcase's discovery process.
During 2008, the topic of transparency in talent management surfaced in several ASTD Benchmarking Forum venues, starting with a member-to-member survey created by Steelcase. The "benchmark survey on talent management transparency" focused on two main topics - a formalized talent review or succession management process and a specific high-potential accelerated development program.
Companies were asked whether programs were in place and whether information about the processes or people involved was communicated throughout the organization. Some of their responses are provided here.
The most open approach could be described as one that informs employees whenever individuals are selected for succession or when a position has been identified as a critical role for the company. Companies with transparent talent processes have a very amenable corporate culture. These organizations report a high level of employee motivation when talent management information is shared.
Selected individuals are energized and engaged, while those not selected remain motivated because they value the candid communication and feel that they, too, have a chance of being selected if they continue to improve their performance. Such transparency can drive a more positive employee base, contributing to improved corporate performance.
One food industry company chooses to communicate at the "full disclosure" end of the transparency continuum with regard to succession and accelerated development. "We do practice complete transparency with the individual involved in succession," says the ASTD survey respondent.
"In addition, we formally announce the names of those who have entered our acceleration programs through our intranet site. In doing so, we cite the necessary qualifications, experience, leadership, and other relevant attributes to impart useful models and cultural information."
Johnsonville Sausage, a privately owned company established in 1945, brings transparency into its personal development framework. Johnsonville hires "members," not employees; supervisors are called "coaches"; and the company is organized around "teams" rather than departments.
According to Johnsonville's Director of Organizational Development and Learning, Don McAdams, "personal development commitments (PDCs) are developed annually by all members. They are used to determine and document what is to be delivered by that member in a given year, and are made visible to everyone in the company on our internal website.
"This is a great corporate resource," McAdams adds. "It becomes an effective coaching tool, certainly. In addition, members can readily identify subject matter experts who are working on an area of mutual interest, or project teams can find colleagues who have expertise that may be of value elsewhere in the organization. Making PDCs visible means everyone can see the objectives and development plans of all our members and tap into expertise that might otherwise remain hidden."
Contrary to the example above, Steelcase research found that transparency in some corporate environments leads to disengagement and demotivation. As employees discover that they have not been identified as high potentials or future successors, or that their current role is not seen as having strategic corporate value, the employees may become demotivated, disillusioned, and an overall liability to the organization.
One travel industry organization indicates, "We do not communicate to designated individuals that they are being considered in succession planning [but instead] develop high-potentials for 'future key responsibilities' without committing to a specific position, timeframe, or outcome. Sharing details may result in competition between people, claims of unfair practice or discrimination, and decreased motivation or loyalty by those who have not been selected."
Transparency is a major area of discussion for an IT company that chooses to take a partial picture approach. Those on the succession plan are told they have been identified for special developmental opportunities, without identifying the specific position.
"This precludes setting up an expectation for additional compensation," says the IT company's representative. "Also, we do not communicate to employees at-large the names of our high potentials. We don't want to create a mentality that there are those on 'the list' versus not on it."
When there is limited or little transparency, employees can spend excessive energy trying to determine who is "in or out," which distracts from work objectives and fosters an "us versus them" atmosphere and ultimately, decreased performance.
Mixed or no transparency approach
Steelcase found that a vast majority of corporations do not have a single point of view regarding talent transparency, and often, this mixed perspective leads to a "do nothing" approach. Anecdotal evidence indicates that this is likely to be the worst-case scenario.
When asked about transparency with regard to high-potential accelerated development, one telecommunications survey respondent said, "I cannot answer as to the extent of our communications transparency policy. I am not sure what the corporate policy is and don't know our manager's thoughts."
An advanced-technology company relates, "There is not a consistent communication process across the corporation. Though the philosophy is to have open communication, this is not done consistently."
Doing nothing can lead to a communication "grapevine" loaded with misinformation and speculation. Employees find out (accurately or inaccurately) about individuals selected for succession or targeted corporate positions. This works against what leaders might be trying to accomplish and can lead to pervasive frustration, negative attitudes, loss of collaboration, and ultimately, decreased performance.
The Steelcase perspective
Before a transparency point of view could be formalized, Steelcase ensured that equal opportunities for development and growth were available to all employees. For nearly 10 years, the company pushed for an employee development process. Intentionally, the atmosphere is not one of "haves and have nots" but one of "haves and have mores." Everyone has developmental opportunities, and some have accelerated opportunities.
With a development process in place, and other formal programs (succession planning, accelerated development, strategic talent identification) being put in place, Steelcase needed to land on a point of view regarding transparency of these processes and their outcomes.
Eighteen months ago, Steelcase's investigation began resulting in the company's conclusion that greater transparency regarding talent management processes affects employee retention and trust.
So if Steelcase articulates its rationale, most employees will come to know, understand, and respect the company's position. Steelcase crafted its formalized point of view regarding talent management transparency, keeping in mind the organizational environment and maximizing authentic alignment.
Succession planning: communication about the process
Traditionally, succession planning was a closed-door activity. The revised Steelcase stance is that the business rationale behind the succession planning process needs to be communicated to all employees.
This sends the message that Steelcase has a scientifically based, legally sound succession planning process in place to ensure strong, future leader fitness. The succession planning process steps will be described on the HR portal, allowing any Steelcase employee - nonleader or leader - to review and understand the approach.
Having such transparency surrounding the process reinforces the value placed on employee development and highlights the importance of leadership bench strength for the future of the organization.
It was determined that selection decisions made by Steelcase leaders regarding successors would not be communicated to the individual or to others in the company. Once the succession process identifies individuals from the Steelcase job family talent pools, an individual's manager would handle communication one-on-one, without indicating the successor selection.
This eliminates potential problems associated with setting up expectations. The one-on-one communication consists of
- feedback indicating that the employee is valued and performing well
- a validation discussion of the employee's interest in leading or demonstrated leadership potential
- information on Steelcase developmental opportunities that could help the individual achieve her career goals.
With this point of view, selection translates into a motivating, personalized dialogue about further development. The approach is respectful to the individual and to others in the organization, and it still supports corporate succession planning needs. This approach is one that is authentic to Steelcase, has no associated costs, and can help with retention and engagement.
Critical positions: open communication about the process
It was agreed that Steelcase's continuous process of aligning critical roles and competencies with the company's overall vision and strategic direction can and should be communicated to all employees. It is motivating to know that on a yearly basis, leaders engage in a process of identifying key roles and determining the competencies that will drive performance. Employees can see that Steelcase is being strategic in its thinking and actions regarding talent.
Communicating that this process is dynamic, and that it may change from one year to the next, can foster the agile frame of mind needed for continued growth in employees, rather than creating a workforce that feels encumbered by "the way we have always done things."
Critical positions: transparency limits
While identification of critical roles is important, how the results are communicated to employees is seen to be delicate. Because strategic positions change (in some cases year-to-year), this suggests that information regarding critical positions remains among the senior executives. Communication to the workforce focuses on the competencies that drive job roles and the future-state competencies needed, not the strategic roles themselves.
If Steelcase's work is truly focused on the future, such communication allows interested employees to focus on
development gaps based on strategic competencies - whether applicable to their current role or a future role.
Steelcase has made decisions about where it stands on the transparency continuum. The company wants employees to fully understand the processes, but not the process outcomes. This newly formalized stance is part of a plan to foster greater understanding of the organization's talent management practices.
With better definition of its talent management transparency position, Steelcase's next step is to do a better job of communicating the key processes. Hackett explains, "We believe this approach allows employees to feel secure in knowing there are thoughtful plans in place, and may inspire many to think, 'hey - there are great opportunities here.'"
"The jury's still out," says Hackett, "but we believe our more clearly defined transparency parameters support our value of authenticity and will be a strong driver of greater motivation for our employees - a positive for the company and for careers." t+d