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Budget: information blockages
Information blockages - CREATING SYSTEMS TO PROMOTE TRANSPARENCY
My business is founded on the belief that organisations thrive when non-financial managers can easily find, read and understand financial information that is relevant to them–particularly their budget and spending information. When people understand their financial activities they are empowered to manage them properly. And only then can they be held truly accountable.
This belief is often confirmed by the reality I see in organisations with which I work: there is a clear relationship between success and the sense of ownership, empowerment and belonging felt by every employee. The buzzword is “goal congruence” – the more people truly believe they are all valued members of the same team, the more they all pull together in the same direction.
Yet many people find transparency threatening -- perhaps precisely because it does empower people, and some executives are not actually comfortable with empowering their middle managers. Instead, they try to distract people's attention with sideshows. We've all seen, or been part of, organisations that fiddled around with rebranding exercises and feel-good sponsorships only when they were facing real trouble.
Sometimes information is concealed with good intentions, when executives are afraid their managers won't be able to handle the truth. The typical fear is that too much reality will lead to negativity and dissent.
In fact, the reverse is true: Humans are extremely good at detecting when information is being withheld from them, or when they're being fed watered-down versions of the truth. And when we see someone hiding information, we assume it's because there's something to hide. The resulting mistrust can break up a team with astonishing speed, as everyone assumes the worst and starts scrambling to protect their own position at all costs.
It's a simple equation: Where there is mystery and deniability, there is also back-covering and buck-passing. Instead of a team of motivated and empowered individuals, you get a cellar full of mushrooms (google “mushroom management” if that reference is unfamiliar).
With true transparency, there is nothing to deny: there are just the facts – to be explained if necessary.
Which brings us to a critical point: if you want a transparent culture, you must also have a listening culture. If a manager exceeds his budget, for example, that's an opportunity for everyone to learn: Was the budget unrealistic, did the manager fail or did external circumstances change? It's always better to know the real reason.
When transparency is only a new way to wield a big stick, it doesn't work – people will just find new ways to conceal information.
Information blockages are most common in organisations with rigid hierarchies and a habit of top-down communication. But no organisation is immune. Creating systems and processes that promote and maintain transparency at all times is a constant challenge. asa
Author: Kevin Phillips CA(SA) is the Managing Director of idu Software.
Article Comments
Hi Neil,You have a way of always grnibing up a topic I am wrestling with. Just today a solution arose and I was energized. Had I read your Monday Wake-Up on Saturday not only would I have had a solution but maybe I would have spewed less venom around those closest to the problem . I try to always see a problem as a wonderful opportunity to shift things in a better direction but still find myself trapped in the drama of who's FAULT is this? Knowing full well it always comes back to me, the owner . Thanks for shaking things up every Monday Morning! DZ
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