Project Management

5 ways to increase trust through transparency

From the The Money Files Blog
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A blog that looks at all aspects of project and program finances from budgets, estimating and accounting to getting a pay rise and managing contracts. Written by Elizabeth Harrin from GirlsGuideToPM.com.

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Categories: budget, team, transparency


A couple of times people have said to me that sharing the project budget with their team members is Not A Good Idea. I don’t know why that is the case – they are stakeholders too. I think it is essential to be transparent about the budget, how it was created and how you, as a team, are doing with spending it. It helps the project team come together with a common objective, and it helps build trust in the way in which things are being done.

In his book, Employees First, Customers Second, Vineet Nayar talks about 5 ways that transparency helps build trust among the stakeholder community.

1. Understanding the bigger picture

“Transparency ensures that every stakeholder knows the company’s vision and understands exactly how his or her contribution assists the organisation in achieving its goals,” Nayar writes. In project terms, it is difficult for a project team member to contribute effectively without knowing what the bigger picture is. In budget terms, if team members don’t know how things are going overall and how much their elements are costing, they cannot help work more efficiently to get the job done.

2. Generating personal commitment

Nayar says that transparency ensures that “every stakeholder has a deep, personal commitment to the aims of the organisation.” I don’t believe this is true. Transparency may contribute to building this, but it is not the only way you get people to feel as if they are personally committed to a project.

3. Transparency is a given for Gen Y

The younger project team members will expect full transparency, and without it they will be suspicious and untrusting. “They post their life stories in public domains,” says Nayar. “They expect nothing less in their workplaces.”

Again, there is more to this than I think he brings out in the book. Transparency about the budget and all other elements of the project will help generate trust in team members of all ages. Generation Y team members may have a different expectation of what is appropriate to share, but sharing (or not sharing) will have an equal impact on the trust levels across the entire team.

4. Corporate transparency promotes customer transparency

Nayar says that in a knowledge economy, it is important for customers to share their ideas with companies. This is the way that we find out what products they want, how their lives are evolving and what would make their lives easier. They may also have ideas about solving problems with our products or corporate challenges that we are facing. “Why would a customer be transparent with a potential partner like us if that company does not trust its employees enough to be transparent with them?” Nayar asks.

This is a fair point. While I would not advocate sharing the project budget with customers (unless your work is in the public sector and this is therefore expected), it is a good idea to share the budget predictions with your suppliers and partners. Why not? It will help them pitch their services at a price that creates a win-win situation for you both. In one case I heard about recently, a supplier opted not to pitch for work when they heard the budget figure that the company in question had available. It saved both the company and the supplier a lot of time in the tendering process. Share your budget figures with people outside the immediate project team. Or at least consider reasons why you shouldn’t, and then critically assess those reasons to see if they still stand up.

5. Transparency helps contractors

Finally, you need to consider the work of contractors. “The only way these outsiders can get up to speed quickly and be as effective as possible is through sharing of information and complete transparency about the strengths and weaknesses, the issues and concerns, of the assignment,” Nayar writes. “The more transparent the process, the more trust that the outsiders felt in the organisation, the more we could reduce the amount of learning time, which would give us an advantage over our competitors.”

If you share project information with contractors, it helps them feel more comfortable in their role. It will also help other team members, who have to deal with these contractors, feel as if the contractors are offering a valuable service and are actually making a contribution. If the contractors operate without full visibility, other team members may well feel as if they cannot trust them to make the right decisions because they do not have all the relevant information.

How transparent are you with your project budget? Do you share this information with stakeholders as willingly as you share other project information? If not, why not?

Posted on: April 26, 2012 01:07 PM | Permalink

Comments (2)

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Good article Elizabeth.

Transparency is good, no doubt on this. However, there are a lot more to consider when sharing information. For examples, some people may take information objectively while there are others who will take it more personally, yet there are people who are more matured mentally to handle truth than others. So when sharing information, we need to plan properly on when, where, and how to share it. Being transparent is ideal, but we are living in a less than ideal world.

I agree that you have to consider the sensitivities of the recipient, but I don't think that is a good enough reason to not share information. Generally people (in my experience) are appreciative that you trust them with information in the first place and see the sharing of information as a positive thing.

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