Transparent Culture Strengthens Employee Engagement

Abstract

The Cultural Transparency will have a powerful impact on employees. An individual's ability to

work productively and fruitfully will depend on the culture of organization. A transparent culture

will create trust, loyalty, passion among employees towards job and dedication to the company

which in turn strengthens and increases the levels of engagement. Employees who feel warm in

the culture are more likely to be engaged with their jobs and companies. Culture gives big

picture of organization and its purpose can be used to foresee performance on important metrics

such as profitability, growth, innovation, quality and customer satisfaction. Understanding

employee engagement is most valuable when understood within the context of the culture of the

organization. If we look at employee engagement alone, without considering the culture that

employees work in, we potentially leave ourselves blind to the strategic strengths and

weaknesses in the organization that impact employee performance and eventually organizational

performance.

Cultural Transparency

When we speak of transparency and creating a culture of truthfulness, we are really talking

about the free flow of information within an organization and between the organization and its

many stakeholders, including the public. “Cultural Transparency” is the order of the day.

Transparency is not to be asked but given. Harvard Business Review article, “What’s Needed

Next: A culture of Candor,”1 James O’Toole and Warren Bennis suggest the following to

develop a culture of transparency1. Tell the truth 2] Encourage people to speak the truth to

leadership 3] Reward those who speak the truth. 4] Practice having disagreeable conversations 5]

Have many sources of information 6] Admit mistakes 7] Develop support for transparency

within the organization 8] Share information. Transparent policies are effective only when

information becomes embedded in an action cycle of market participants, becoming an intrinsic

1 O’Toole, James, and Bennis, Warren [2009] “What’s Needed Next: A Culture of Candor,” Harvard

Business Review

part of the decision–making routines of information users and disclosures (Weil, Fung, Graham,

& Fagotto, 2006)2.

Organizational culture expresses shared assumptions, values and beliefs, and is the social glue

holding an organization together.When strong integrated behavior, values and beliefs have been

developed, a strong organizational culture emerges and this strong culture must be transparent.

This would in return ensure improved and consistent behavior among employees of the

organization, lessen the attrition rate and create a wholesome and hygienic work environment.

Cultural transparency helps create trust among stakeholders and employee’s participation will

become voluntary. There’s been a great work on literature generated over the past decade about

the concept of organizational culture -- particularly in regard to learning how to change

organizational culture. In his seminal 1992 work entitled Organizational Culture and Leadership,

Edgar H. Schein, Professor Emeritus in the Sloan School of Management at the Massachusetts

Institute of Technology, offered a definition of what he called “an empirically based abstraction”

Organizational culture he said is a pattern of shared basic assumptions that the group learned as it

solved its problems of external adaptation and internal integration that has worked well enough

to be considered valid and therefore, to be taught to new members as the correct way to

understand, think, and feel in relation to those problems3. In the words of Hofstede (1980)

culture is, “The collective programming of the mind which distinguishes the members of one

human group from another ….The interactive aggregate of common characteristics that influence

a human group’s response to its environment.” Anthropologist Symington (1983) has defined

culture as, “… that complex whole which includes knowledge, belief, art, law, morals, customs

and capabilities and habits acquired by a man as a member of society.”Culture has been defined

differently by various scholars but one thing has to be understand by every organization is ‘there

is culture and must be transparent’. The presence of robust, fitting and positive organizational

culture has become more essential for organizations and to ply effectively and efficiently it must

2 Trevino LK, Nelson KA: Managing business ethics: Straight talk about how to do it right.2 edition. John Wiley &

Sons, Inc., New York, NY; 1999.

3 Schein, Edgar (2004) Organizational Culture and Leadership. San Francisco, Jossey Bass Publishers.

be rational with transparency. when culture does not work even after creating transparency then

something wrong with the core/basic values of the organization and in such case Leadership of

the organization must re-invent or re-discover the culture and make it transparent ,culture is such

which has been consciously or subconsciously accepted and followed as the way of life or

manner of performing day-to-day activities in an organization and has been oxygen of the

organization, if it is befouled or becomes insalubrious, organization becomes indisposed and this

could be disaster. The way in which J&J handled the 1982 Tylenol crisis has always been the

talk of transparency; an organization acting in a manner consistent with its values. J&J instantly

hauled the product from the shelves without regard to the cost or public embarrassment, and

certainly without any regrets over lost profits. In his interviews Jim Burke said that J&J’s Credo

made it easy for him and his people to know exactly what to do: J&J’s “first responsibility is to

the doctors, nurses, and patients, to the mothers and all the others who use our products and

services.” It is fact that culture of the organization can define the quantity and quality of

employee engagement in the organizations.

Unbiased Cultural Transparency

Watson (2006) emphasizes that an important trend in managerial thinking in recent decades has

been encouraging managers to try to create strong organizational cultures. Senior managers

generally have a clear grasp of the real issues the organization facing. They are steeped in these

issues every day. Mid-level managers – who, after all, are busy managing – don't always see

things the same way. The only solution is for senior leaders to persistently communicate the

issues to them. If the senior managers have tendency for biased transparency it is bad to worst.

When speaking to few employees of IT industry during my research work they expressed the

concern of biased transparency. Senior managers are transparent to those who are their near &

dear. Transparent culture built on near & dear, perks and parties is biased way to foster social

connections and to relieve stress, the links to true engagement are tenuous. Unbiased

Transparency happens only when an institution creates a culture of truth and trust where the

stakeholders feel free to speak the truth to everyone. New York Times essayist John Schwartz

writes, when officials say they are being transparent, “what they really mean is ‘not lying’ and

‘not hiding what we’re really doing.’ But that doesn’t sound as nice or vague, does it?”2

claiming to be transparent are not the same as actually being transparent. Even as many heads of

corporations boast about their commitment to transparency, the containment of truth continues to

be a dearly held value of many organizations. Sadly, you can say you believe in transparency

without practicing it or even aspiring to it. For creating unbiased culture of transparency

employees felt frequent social interaction sessions, creating feel of community, frequent

feedbacks and regular interactions of rank and file, this will create lasting effects. Every high-

performing company has a unique identity — idiosyncratic characteristics that set it away from

other organizations. These characteristics give employees a sense of morale and to be part of the

company and also become passionate about company and customers. The best performing

companies must always be transparent in understanding and managing the culture that align with

the company’s strategy. Biased culture of transparency will paralyze the information system of

the organization, paralyzing the information system of the organization is all about partial flow

of information, this hazardous will create disengagement among stakeholders of company and

this disconnection will discourage employees to secure knowledge and leads to ‘incomplete

intelligence’. Flow of information means critical information going to the right person at the

right time and for the right reason, but not to wrong person, time and reason and when this

happens stakeholders feel free to speak openly, and organization must welcome such openness.

Creating unbiased cultural transparency will engage employees and knocks down silos and

produces more productive and loyal team members but vice-versa destroys engagement and

affects the all round performance of organizations.

Connect to Culture

Organization must ensure that employees are connected to the culture of organization.

Organizational culture affects the way in which people consciously, subconsciously think, make

decisions and ultimately the way in which they perceive, feel and act.[Hansen and

wernerfelt,1989;schien 1990]. Deal and Kennedy [1982] and Peters and Waterman [1982] have

considered that organizational culture good amount of influence in areas such as performance

and commitment. Many experts began to argue that developing a strong transparent

organizational culture is essential for success. This success happens when culture in true spirit

connected to the people working for the company and when it is connected the engagement

starts. While the link between organizational culture and employee engagement is certain, there

is no denying that each organization has a unique culture and that these cultures drive much of

the individual behavior observed in organizations. Employee engagement is well connected to

the culture of the organization and markedly affects the bottom line. One of the most significant

threads in my current research on ‘employee engagement’ is the discovery that employee

engagement is linked primarily to the culture of the organization, especially the culture of

feasibility, growth and improvement; this for sure leads to customer satisfaction which is linked

to organizational financial success. [See appendix-table-1]. The table reveals that, overall 90%

of the employees agreed that present organization provides opportunities for growth and

improvement and 10% of the employees did not agree to this and of the opinion that they neither

get opportunities for developing their capabilities nor are they getting guidance from their

immediate managers to enhance their performance. Without proper potential/career development

programs, organizations will fail to create second line of leaders who will encourage and

improvise the company’s culture and culture of transperency. Culture can gloss engagement into

positive gains for the organization by enhancing organizational effectiveness and improving

work quality, as well as by helping the organization charm and retain top-quality employees. In

one of the Fast company articles Google deliberately informs workplace satisfaction, not just

around incredible perks, but also by creating a corporate culture that provides freedom, mutual

respect, and transparency for all employees. According to the article, Google empowers its

employees to have a say in topics ranging from how the company is run to the new design of its

company-provided bicycles. This underlying philosophy of empowerment and transparency is

the most attractive aspect of corporate culture4.

A highly engaged workforce is 50% more productive than an unengaged workforce5.

Organizational culture is embedded in the everyday working lives of all employees and is

exposed through formal practices (such as pay levels, structure of the hierarchy, job descriptions,

and other written policies);informal practices (such as behavioral norms); the organizational

stories employees tell to explain “how things are done around here;” rituals (such as Christmas

4 fastcompany.com,[2013]where-are-they-now/not-happy-accident-how-google-deliberately-designs-workplace-

satisfaction?partner=newsletter.

5 Stanford University [2004] Organizational culture. [March, 2004].Research paper no-1847.

parties and retirement dinners); humor (jokes about work and fellow employees); jargon (the

special language of organizational Initiates); and physical arrangements (including interior decor,

dress norms, and architecture). Cultural expositions also include values, sometimes referred to

more abstractly as content themes. Culture consists of the patterns of meanings that link these

expositions together, sometimes in harmony, sometimes in bitter conflicts between groups, and

sometimes in mesh of ambiguity, incongruous, and contradiction. For these reasons, it is much

too simple to define culture in unifying, harmonious terms, for example, in terms of values that

are embraced by management and supposedly shared by most employees6. A recent survey found

that over 50% of American workers report being inclined to work for “green” companies.

Women and Generation Y in particular want their company’s mission to go beyond profitability,

encircling benefits to the wider community, on social, environmental and economic dimensions.

They are eager to work with companies in which they feel they can make a difference. This

difference manifests a strong employee engagement tendency in the organization. Schein (1985)

focused attention on individual corporate leaders who attempt to generate company-wide

consensus regarding their personal values and corporate goals through wide range consistent

corporate policies and practices. Transparency allows employees to feel happy and establishes

belongingness, boosts morale. It has been established that there is a strong relationship between

Employee Engagement and organizational culture. Studies have shown that firms with high

numbers of engaged employees increase Mutual accountability, open communication, shared

management and eventually the increases the revenues of the company. Engaged employees are

more committed and put forth more effort and Disengagement is an expensive problem to fix.

A True Practice of Leadership

Transparency is being hailed as the mantra for new competitive advantage, and "trustworthiness"

is the new mantra for leadership. According to Schein ‘Culture and leadership are two sides of

the same coin’. When organizations start or when groups start there is always a leader who has a

preferred way of doing things, and those preferences by definition are going to be imposed on

the group members. If you don’t like the way I run this group, I’ll replace you. The leader’s

values and preferences are the first ways that a group or organization does things and if that

6 Fairing Group [September 24th, 2009] Building an Organizational Culture of Sustainability: Employee

Engagement. Accessed on 25/02/12.

works it becomes eventually the culture of that group. So in a very real sense, founders and

leaders create culture’. A leader must be closely aligned with the culture he or she hopes to

lead. Leaders must institute high morality and ethical discipline concerning the way people in the

organization should be treated and the way goals should be pursued. Leaders create standards of

efficiency and excellence and then must become a role model for others to follow. And they

must personally act in accordance with the same and they must preach others to do the same and

promote the same. Leader’s total allegiance is common prescription for success of organizational

culture, and also for being creating transparent culture which gives personal satisfaction to

employees working for the leader. In my research work 90 percent agree to the organizational

leadership is the one character, on which employees find pleasure to work in any organization.

Only 10 disagreed to organizational leadership. [sees Appendix - Table- 2]. Organizational

leadership is a process that ensures the firm is continually moving forward through the

continuous assessment of its culture and seeking new opportunity to lead the industry.

PeterSenge has adopted the definitions for leadership by organization as the following in the

abstract- ‘Leadership is the capacity of a human community to create its future”. In operation-

“Leadership is the ability in an organization to initiate and to sustain significant change, to work

effectively with the force that shape change”. The important point about this definition is the

emphasis on collective capacity which in turn is collective enterprise. This collectivism comes

when leader organizes a culture of true spirit. The brand Leadership is about flourishing

exceptional culture where employees make merry, customers connect themselves to the

organization. This happens when culture is religiously and emotionally connected to the

stakeholders of the company.

The efforts and statements of a company leader will influence people. Efforts and

statements of company leaders like Jack Welch (GE), Bill Gates (Microsoft), Andy Groves

(Intel), Steve jobs (Apple), Herb kheller (Southwest Airlines), Ray Kroc (Mc Donald’s), Akio

Morito (Sony), Sam Walton (Wal-Mart), Paul v. Galius (Motorola) etc have influenced and

shaped the culture of their respective organization with true spirit and in true spirit. When

employees accept actions and statements of leaders then it is reciprocal and collective. This is

what required and it is what synergy. The success of the culture in any organization eventually

depends upon the type of synergy that exists. Saliently faithful practice of leadership for the best

culture is demonstrated most authentically in the leadership moment. Leadership is gritty,

requires being shrewd hard work, integrity, honesty, and credibility and along with these leaders,

who stay visible, accessible, engaged with purpose, passion, performance and persistence with

absolute resolve will create trust in the organization. Trust will kindle trust worthy culture and

trust worthy culture is always transparent. These actions and statements set culture and become

culture of the organization. Effective and efficacious leaders use a repertoire of style to create

positive work culture in the organization and setting example for present and future. [See

Appendix-Table-2]. The table concludes Almost 72% of the people in the IT Industry feel that

their leader leads by example more often if not always. Around 3% of the people felt that their

leader does not lead by example. As a leader, part of his job is to inspire the people around him

to push them and, in turn, the company to greatness. This greatness comes once the culture of

transparency has become habitual and accepted, they become a strong leadership tool to

communicate the leader’s beliefs and values to organizational members, and especially new

comers. When leaders foster transparent culture, they become successful in maintaining

organizational growth, the good services pressed by the organization, the competence to address

problems before they become infective agents. Schein, (2004) states that founders and leaders of

organizations know that their own visible behavior has great values to the members, especially

new members. How leaders behave is how their followers will tend to behave. Companies can’t

innovate, respond to changing stakeholder needs, or function efficiently unless people have

access to relevant, timely, and valid information. It’s thus the leader’s job to create systems and

norms that lead to a culture of candor. Employees of the organization to trust in transparency

must first feel safe: physically, emotionally, and financially. Inordinate pressure and terror of

losing one’s job make it arduous to take the risk of admitting mistakes or weakness. Employees

must feel they have a personal relationship with their leaders to the point where they would feel

cosy having a conversation that involves some risk.

Summing Up

Culture has been one of the most enduring buzzwords of popular management. Organizational

culture is apparently unifying and this strongly appeals to management’s concern with projecting

an image of the organization as a community of interests. Cultural analysis brings to centre stage

a rich vein of behaviors and stands on its head much of the conventional wisdom about

organizations. Culture is unifying and refers to the processes that bind the organization together.

Culture penetrates to the essence of an organization – it almost analogous with the concept of

personality in relation to the individual and this acute sense of what an organization is – its

mission, core values – seems to have become a necessary asset of the modern company. There is

the vexed question of whether or not organizational culture can be managed. Academics

interested in understanding and analyzing culture tend to say no. While there may be no

definitive answer to the question, the critical and the managerial. Culture in organization studies

has become significant factor managers and organizational researchers cannot ignore in both

practical and theoretical aspect, but it is not easy to secure accuracy and perfection in measuring

culture because culture itself is abstraction. In reality, building and changing organizational

culture is not an easy job because the forming of culture is a long affair, especially with

transparency.

References:

1] Edgar H Schein [1997]Organizational Culture & Leadership, [online] available from

http://www.tnellen.com accessed on [03/03/12.]

2] Fairing Group [September 24th, 2009] Building an Organizational Culture of

Sustainability: Employee Engagement. Accessed on 25/02/12.

3]google[2013]where-are-they-now/not-happy-accident-how-google-deliberately-designs-

workplace-satisfaction?partner=newsletter,www.fastcompany.com

4] O’Toole, James, and Bennis, Warren [2009] “What’s Needed Next: A Culture of Candor,”

Harvard Business Review.

5] Schein, Edgar (2004) Organizational Culture and Leadership. San Francisco, Jossey Bass

Publishers.

6]Stanford University [2004] Organizational culture. [March, 2004].Research paper no-1847.

7] Trevino LK, Nelson KA: Managing business ethics: Straight talk about how to do it right.2

edition. John Wiley & Sons, Inc., New York, NY; 1999.

Appendix

1] Organization provides Opportunities for Growth and Improvement.

2] Great personal satisfaction for working this organization because of organizational leadership.

3] Leader led by example.