7 Reasons Why Transparency Is Crucial For Effective Leadership

It’s about keeping your teams and individual employees in the loop, sharing good (and bad) feedback, and welcoming input from your employees. Transparency is an essential leadership trait that comes with a wealth of benefits for everyone involved in the business.

From greater employee advocacy to improved performance and well-managed expectations, the advantages are many. Here are 7 reasons why transparency could be key as an effective leadership strategy.

1. Clarity of expectations 

Transparent leadership creates clarity for employees and results in well-managed expectations. 

Conversely, withholding information sometimes leads to poor communication and a lot of misunderstandings, which ultimately result in unmet expectations. 

That’s why it’s crucial for you to lead with transparency so you can make sure clear and appropriate expectations are set and met (for both employer and employees). While creating online training courses for your organization is a good idea, it can only go so far.  

With open and frequent communication, employees will be less likely to make assumptions about their roles or the organization.


Pat Flynn is an example of a successful entrepreneur who uses transparency to create clarity and well-managed expectations in his business. In a world where Internet marketing has spawned a lot of shady marketers, he has separated himself by being a transparent leader.

2. A boost in employee performance 

Leaders everywhere are always looking for ways to motivate their employees to give their best efforts. One of the best ways to boost employee performance is to offer effective, transparent leadership. 

Studies have shown that management transparency has a big effect on the creativity of employees. When leaders share information, express their true feelings/vulnerabilities, and reveal the reasons that drive their decisions, it instills a sense of psychological ‘safety’ which enhances employee creativity. 

This is particularly true when leaders are honest and open about their own challenges and mistakes. And, since people are most creative when they feel that they can take risks without fear of challenging the status quo or being penalized for making mistakes, you can see how open and honest leadership can boost employee performance.


This American entrepreneur is a great example of a successful leader who isn’t afraid to use transparency as a way to get his team to work harder and improve productivity.

3. Building a foundation of trust and respect 

It comes as no surprise that most employees have an easier time trusting transparent leaders. Although it takes time to earn the trust of employees, you can get them to trust you more easily by being completely honest and open so you can start to build a powerful foundation of trust and respect from the very beginning. 

Over time, this will lead to a healthier work environment and a more unified team. Building trust through transparency will also provide you with a ton of other benefits. For instance, you will have an easier time assigning and delegating tasks, giving criticism, and providing direction to the members of your team. 

As a leader, you will also find that transparency causes your employees to respect you and unanimously follow you.


Jason Goldberg, CEO of Fab, is an example of a successful entrepreneur and leader who has used transparency to build a solid foundation of trust and respect with his employees. This has undoubtedly played a major role in the company’s phenomenal success. 

4. Increased company advocacy and loyalty

The more transparency in your style of leadership, the more open you will be to building strong, meaningful relationships with your individual employees and teams. 

This, in turn, leads to increased company advocacy and loyalty. Doing this in traditional companies is straightforward, but it can be very difficult in gig companies like Uber and Lyft drivers, Instacart shoppers, Doordash delivery folks, etc.

Although it’s not advisable to form friendships with your employees as this can potentially distort your working relationship, it’s still a good idea to build healthy, sociable, and mutually respectful relationships with the individuals under your leadership. 

Transparency in your leadership allows you to become ‘more human,’ and approachable and helps to encourage an environment where positive working relationships can thrive.


Rand Fishkin is an example of a leader who uses transparency effectively to increase loyalty and advocacy from employees. He is open and honest about every aspect of his business, and even posts his own performance reviews. He shares all his company’s successes and failures so other people can learn from his experiences.

5. Improved collaboration 

Transparency in leadership improves collaboration amongst employees and makes it easier to reach a consensus in business decision-making

When you are clear about your motivations for team assignments (as an example), it makes it more likely that people in the organization will be more willing to collaborate. This, in turn, makes it easier for you, as a leader, to assign teams cohesively. 

For example, if you were to pair a lower-ranking employee with someone who’s more seasoned, the less experienced employee may feel it’s a sign that you don’t think they are able to complete the job properly on their own. 

But, if you are honest with your motivations for putting the two of them together — such as complementing strengths and weaknesses to make the job flow smoothly — it will help motivate both workers to make more of an effort in their mutual engagement.


Jim Whitehurst uses leadership transparency to improve collaboration. In his company, he has an employee fueled for him known as a “memo list” which helps to facilitate communication and collaboration on major topics that should be discussed openly.

6. Faster problem solving 

When leaders are transparent, it allows employees to be more open and put forth more honest individual viewpoints — especially in public dialogue. 

When a team works in this way, it makes it easier to work together toward common end goals. Ultimately, problems tend to reach a resolution a lot faster, and it all begins with transparent leadership.

Lora Blandon, a Senior Team Leader from The Reviews Insider suggests that leaders should not be afraid to embrace true transparency in order to experience more success in their organizations.

7. Higher morale, culture, and motivation 

It’s clear that being more transparent is something that every leader should aspire to – for a lot of reasons. But, one of the most important reasons is that transparency is the secret to enhancing the employee experience

It’s one of the main factors that motivates and engages your employees, and it has been shown to have a huge impact on all the things employees care about, such as status, certainty, relatedness, autonomy, and fairness.

Your transparency as a leader will lead to higher morale, culture, and motivation for your employees.  In a digital world, this may mean hosting webinars for all employees to attend to learn about the future direction of the company, but the key here is that leaders in the company step forward. 


Tony Hsieh, CEO of Zappos is an example of a leader who uses transparency to boost morale, culture, and motivation in his organization. 

Final Words

Great leaders aren’t born. Whether a leader is a CEO or a President of a company, effective leadership demands hard work, as well as constant, never-ending refinement.

The good news is, the journey to becoming more transparent is one that any leader can take by following the right strategies for improving transparency as a leader and cultivating a work culture that rewards employees who are equally transparent.

It all comes down to consistently exhibiting a few important traits, such as:

  • Expressing your opinions openly even when expressing dissatisfaction.
  • Keeping your messaging consistent with all your employees.
  • Keeping all your commitments.
  • Listening to feedback from others and showing respect and appreciation for it (even when you don’t agree with it).

And remember, leaders are people, too, so always take time to unplug, recharge, and avoid burnout so you can maintain your effectiveness as a leader. 

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