Company Secrecy Can Damage Long-Term Success

Involving managers and leaders in the communication process and creating an internal-communications department are both vital to increasing transparency at organizations, experts say.

Wednesday, September 26, 2012
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Managements would do best to treat their employees like family members who will benefit from knowing about the ups and downs of everyone seated at the dinner table, says Sandi Edwards, senior vice president with AMA Enterprise.

That organization recently put out one of three recent studies showing that corporate secrecy --particularly with regard to such issues as succession planning and development of future leaders -- is a common practice at many organizations these days, even though it may damage their long-term success.

AMA Enterprise -- a division of the New York-based American Management Association --released its survey in June, showing that succession planning is one of the areas most closely guarded by top management today.

The AMA survey of nearly 300 senior managers and executives at companies large and small found nearly half (46 percent) saying their companies are "not at all" transparent with succession planning. Only 11 percent said their organizations are "very transparent" on this initiative.

Strangely enough, companies often fail to communicate about their training and leadership programs as well. For instance:

*  Thirty-eight percent of respondents said their companies are not at all transparent with regard to their high-potential selection criteria and admission to leadership programs; and:

* Forty percent said their companies are only somewhat transparent about the availability of corporate coaching.

Edwards believes the secrecy around coaching is linked to the idea that someone who is offered help from the company is being "fixed" in some remedial way, as opposed to being groomed for future advancement.

Of course, "[i]f you don't share that philosophy [that you are training for advancement] and bring that forward, you won't breed that positive, productive feeling you want happening in the organization," Edwards adds. And clearly, the company won't get any credit for the investment it's made in its human capital if no one really knows what resources are available, she said.

Clearly AMA Enterprise isn't the only organization that's seen management drop the ball when it comes to "developing future leaders and building the pipeline" for growth, according to Patrick Kulesa, global director of employee research at Towers Watson in New York.

A new Towers Watson employee survey based on comments made this spring found that only 37 percent of some 3,600 U.S. respondents said their management teams were good at developing future leaders.

Globally, the figure for more than 32,000 employees -- all at medium-and-large sized organizations with more than 1,000 workers -- was similar, with 39 percent saying they agreed management was good at developing future leadership.

Another, soon-to-be published Towers Watson survey -- this one an employer study of HR executives on talent management -- found that 68 percent of 278 US respondents said their companies identify high-potential employees, but only 27 percent inform them of their status and only 13 percent of employers communicate succession status to individuals identified as successors.

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Globally, the situation is similar, says the latest Towers Watson survey, conducted between April and June. Whereas 66 percent of employers at more than 1,600 companies surveyed identify high-potential employees, only 37 percent inform them of their status, and 24 percent of employers communicate succession status to individuals identified as successors, says Kulesa.

He advocates the following practices for companies interested in improving transparency:

* Involve managers and leaders in the communication process, early and often. Leaders drive culture and they set the tone for what behaviors are accepted and expected. They need to be involved in communicating key messages from the organization to all levels. Also:

* Create an internal communication function, or at least dedicated staff whose role is to think continually about how and when the top leaders are reaching out to staff.

Towers Watson's new global workforce survey also cites the importance of ensuring that succession plans are robust and extended far enough into the organization.

Of course, it's important to communicate to employees about the existence and composition of these plans too.

Edwards feels that there is a legacy left over from the boomer generation, when it was not unusual for executives to gain access to certain kinds of information while other employees were left out in the cold. This is changing, however, she said, partly because younger generations expect the company they work for to develop them.

"More and more over the past 10 years, senior executives have been talking about how important it is to be transparent, so there's been a positive move forward," in that regard, Edwards says.

Now, it seems, more companies just have to walk the walk.

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