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Why New CEOs Should Practice Transparent Leadership (2024)

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It's 2024, and mere job security and career development aren't enough for employees to stay motivated. They want to be part of a workplace culture that encourages transparent leadership. Hence, if you're a new CEO, you must focus on implementing transparency in your leadership skills.

Transparency fosters a sense of trust and provides serious motivation. - Billy Boughey.

Unlike traditional times, people now understand the importance of self-security. Employees can bring their genuine selves to work and do their best work in open workplace culture.

If you are a new CEO here's an important tip for you. No employee wants to get caught in a web of unanticipated and uncommunicated changes.

Leadership, as a whole, remains a critical issue for companies. As per the Deloitte Global Human Capital survey report 2017, 80 percent of business and HR leaders consider leadership a top priority.

Companies frequently appoint new Chief Executive Officers (CEO). The median tenure of a CEO is only 6.9 years, so many employees are likely to experience working in this transition. Newly appointed CEOs bring some or many changes in corporate culture.

We usually write from an employer's perspective and not the employees' perspective. So try to tweak it accordingly.

Your employees will have a variety of opinions about you as the new CEO. For example, how would you turn out? What would happen if you developed a distaste for them?

These uncertainties and questions of a new CEO can be very stressful for employees. So, how well you manage these stresses as a new CEO depends on two things -

  1. How transparent are you as a leader?
  2. How well and quickly do you work the changes that will come about?

Transparency is one of the key ways to manage change in an organization. As a new CEO, it will help you build trust with your team and promote creativity, teamwork, and loyalty.

If you want something new, you have to stop doing something old. - Peter F. Drucker

In this article, we explain the importance of transparency. We’ll help you understand what it means to be a transparent leader and how it can help you manage change. This article will get you started on the path to becoming a great new CEO (Chief Executive Officer) or CTO (Chief Technological Officer).

What Happens When a Company Gets a New CEO?


The need for new leadership at the top of an organization can happen for many reasons. But primarily because the company needs a change.

In business, sometimes you have to change the CEO in order to change the direction of the company. - Thomas Massie

Having a new CEO join the team is a big deal. They usually make big changing decisions which can rattle the entire leadership team. These decisions generally result in departures and new strategies for the company. Anxiety may enter the picture as people figure out the new CEO's ambitions and work style.

In some cases, the transition of the CEO is smooth and well-managed. Other times, the move is fraught with difficulties. One such issue is a clear lack of trust and transparency from the new CEO's end.

The new CEO takes hold and starts making changes. These changes make employees fearful of their role, position, and internal network. As a new CEO, your job is to help employees through tough times, but building trust and confidence is challenging.

Often, a new CEO will be disruptive and unexpected. Employees will have to deal with the uncertainty that it can cause. This uncertainty is why many employees choose to switch jobs in such scenarios.

Change is not a threat; It’s an opportunity. Survival is not the goal; Transformative success is. - Seth Godin

As a new CEO, you should make sure that you take the time to communicate and be transparent about the recent decisions. Your workforce must understand the need for change. What are the changes? What is the time frame? What is the purpose of the change?

Check out this video of Erik Frywald as he shares his experience of coming to U.S based NLC Nalco as a CEO from the outside. NLC Nalco is the world's leading water treatment and process improvement company, with over 20 per cent market share.

As an effective new CEO of a company, you must follow these essential tips:

1. Listing people and business inventory:

Spend a lot of time with the employees. It will help you understand their perspective on the company, what’s working, and what’s not. Ask for team status reports from the last few months. It will give you basic insights into the business while making employees feel better for not acting like a "know-it-all."

2. Identify quick wins:

Work closely with the mentors and leads of various teams and departments. aIdentify potential goals for the coming quarter, as well as changes to the most unpopular employee policies.

3. Fix communication and collaboration gaps:

The biggest cause for poor performance is lack of communication. As the new CEO, ensure proper executive meetings and documented weekly status updates.

4. Removing toxicity:

It's a harsh reality, but toxic people have no place in value creation. An effective incoming CEO will be able to identify those people swiftly. You also need to have active listening skills, conflict management skills, and have no biases.

How to Manage Change as a New CEO?


Change management is a process, tool, and a technique to manage the people’s side of change. It helps to achieve the required business outcome.

Change management can sound simple but what makes it complicated is the people’s side of change. A thoughtful approach to change management will ensure the smooth implementation of technological change. It can also help while hiring employees, merging, or restructuring.

Change is hard because people overestimate the value of what they have and underestimate the value of what they may gain by giving that up - James Belasco and Ralph Stayer

A strong alignment between company strategy, leadership, culture, and organizational behavior is necessary. According to McKinsey, 70% of change management efforts fail due to employee resistance and lack of management support.

Creating a framework to guide change is critical to success in the digital era. Here are the top six tips for creating a solid change management system as a new CEO:

1. Practice transparency:

Managing change is hard, and people are likely to resist changes. But why do people resist when changes are made for the good? People resist when it doesn’t make sense to them or think it works against their interests.

When people aren’t informed about various stages of a decision, it confuses them. So, to mitigate such issues, new CEOs need to practice transparency at work.

A lack of transparency results in distrust and a deep sense of insecurity. - Dalai Lama

Transparency bridges the gaps between communication and collaboration that exist between employees and companies. Transparency fosters trust. It also makes employees feel that they’re working for a company with higher ethical standards.

Engaged employees are more committed to the company’s vision. They feel vested in the mission of the organization. As per Harvard Business School Review, Transparency is the new leadership need for today's workforce.

2. Set up a feedback and change structure:

Asking employees and managers for feedback is an integral part of effective change management. Their opinions and ideas can provide valuable insight to bring in necessary modifications.

Continuous improvement is better than delayed perfection. - Mark Twain

The feedback structure should be open. An open feedback structure enables us to restructure work processes and introduce new capabilities in the workplace.

3. Innovation:

Transformative cultures embodies a spirit of innovation. Encourage employees to embrace an innovative mindset.

By questioning all the aspects of our business, we continuously inject improvement and innovation into our culture. - Michael Dell

As a leader, you must give them fair and equal opportunities to practice innovation in the workplace. Remember to motivate them by recognizing their work and ideas.

4. Accountability:

Accountability helps to foster change in culture in an organization. Leaders must set the tone in favor of the transition to embed a genuine sense of ownership.

A culture of accountability makes a good organization great and great organization unstoppable. - Henry Evans

As a new CEO, you must show more than just passive agreement. Be honest with your decisions and do not blame others for your mistakes.

You must be accountable for every action and decision because you are the leader. You have to serve as an example for everyone else. Also, remember to invite people to collaborate on problem-solving strategies, and reinforce them with rewards and recognition.

5. The balance between short and long term goals:

Even with the best intentions, it is not always easy to tell what must be done now and what can be done later. Only a very few CEOs get this balance right.

We all need lots of powerful long range goals to help us part the short-term obstacles. - Jim Rohn

Most CEOs either focus too much on the near-term urges or deliberately focus on the future. It can leave the organization to wonder what might come down on them.

There are two simple steps to balance this -

  • People will be more enthusiastic about near-term sacrifices if they know that a better future lies ahead. As a new leader, take the time to spell out, even if only thematically, what forms a better future.

  • Movement creates opportunity. Strategic alliance, aindustry restructuring, or reexamining the fundamentals of a business generates movement. Leadership training can open new opportunities not imagined before.

What is Transparent Leadership and How To Be a Transparent Leader?


Transparent leadership means leading with transparency, openness and honesty. These leaders keep their team in the loop and share information freely.

The most important role of a leader is to set a clear direction, be transparent about how to get there and stay the course. - Irene Rosenfeld Mondelez

Transparency starting at work requires an open company culture. It can increase productivity and trust in the organization.

Transparency is not only achieved through monthly staff meetings, floor plans, or other such reports. Transparency needs to be a core company value.

Here are seven steps on how you can achieve a transparent workplace:

Step 1: Make sure senior leadership is aligned.

Does everyone see the external environment the same way? Does everyone understand organizational goals and plans? Does everyone agree on what success looks like? If not, it’s time to remedy the situation.

Alignment is most important at the senior level because all information cascades downward from it, - Studer.

Nothing guarantees mission failure more than a lack of alignment in a senior leadership team. If one senior leader is out of sync with the others, then everyone under them will be out of sync.

When alignment does not exist, the entire company feels it, which will ensure that employees are not connected to a shared sense of purpose. The two best ways you can implement leadership alignment strategy are as follows -

  • Answer The Question Of Why:
    The first step of leadership alignment agrees on what you do as an organization and why. Take the time to ensure that executives share common goals and visions.

  • Communicate Widely, Regularly, And Authentically:
    Once your leadership team is aligned on the “why,” it’s time to communicate it effectively across the organization. In a study of 37 organizations, McKinsey found that consistent communication ranked highly as a priority for alignment, but less than 40% of teams reported practicing it.

The researchers highlighted the missed opportunity here: “When leadership teams have a shared, meaningful, and engaging visuals, the company is nearly two times more likely to achieve above-median financial performance.”

Step 2: Establish open communication channels.

Ensure that everyone in the company knows where to turn when they need information. Openly share information about your company and projects.

The more open you are about the company’s current status and future, the more your team will trust you. Besides your finances, talk openly about your strategy and goals.

Explain your reasoning for decisions. Be sure to share the challenges you want to solve. Include things like low productivity or high turnover. Respect your team enough to share your vision for the future and all other information.

Step 3: Be consistent and honor your commitments.

Nothing destroys trust faster than a broken promise. If you say you are going to do something, make sure you do it. Be careful that your behavior doesn’t tell a different story than your words.

There are three essential steps to get better at this:

  • Reckon your blind spots and ask for help.
  • Be mindful of your words.
  • Change your actions.

Nobody ever reaches perfection, but your team will see that you’re trying and won't hesitate to put their trust on you.

Step 4: Create spaces for individual and collective feedback.

Leaders often have large blind spots because they don’t know what their team is thinking. Being transparent with your staff fosters honesty and creates a safe environment for them.

You’ll also earn trust when you listen and act on the feedback they share. You have to prove that it’s worth the risk to tell you hard truths.

Create safe places for honest feedback. You might consider:

  • Dedicated office hours when your team can start 1-on-1 conversations.
  • Public Slack channels for input or ideas.
  • Anonymous feedback tools that allow employees to send you messages without having their name attached.

Step 5: Trust employees to make decisions.

Company goals become more evident when information is accessible. Employees feel empowered to make better decisions when they are given due autonomy.

Communicate high-level priorities of the company to all team members. It helps everyone understand what they’re working towards.

Step 6: Know where to draw the line.

Transparency isn’t about knowing everyone’s business. It is about ensuring employees have the information needed to do their jobs.

Keep performance reviews, employee salaries, and other sensitive matters private. Every company has a different comfort level, so figure out what works best for you.

Step 7: Hire the right people.

To maintain a transparent culture in your company:

  • Hire people who are aligned with your organizational values.
  • Communicate your values early in the interview process.
  • Candidates should resonate with the company’s values.

The suitable candidates are the ones who get excited to join your team and also identify your mission and philosophy.

How Transparent Should You Be as a New CEO?


From open-book management to making compensation public within the company, the concept of transparency in the workplace is more popular than ever.

If you want your team to behave as you do, they will need access to the same information you have. And, the more transparent you are, the more you’re likely to build trust within your team.

How do you decide what to share with the rest of the team and what not?

To answer this question, ask yourself the following questions -

Am I crossing the line between personal and professional?

It’s vital to have an open-door policy to create a friendly environment in any organization. But you should draw a fine line while divulging personal opinions or any information.

It’s crucial to create a culture where your team members can share their concerns and goals with the management. But too much can lead to loss of control in the management.

The right amount of transparency can increase employee engagement and involvement.

Can I provide enough context?:

Sharing the good and the bad information without providing adequate context can backfire. Be sure to communicate a clear understanding of the information given.

For example, when sharing revenue numbers with employees, include monthly spending. If you avoid this context, people might wonder “Where’s all that money going?” which can cause disruption.

Hence, share revenue numbers along with profit margin and expenses. It will help employees understand how revenue supports the business as a whole.

Will it motivate my team and help them see the bigger picture?

Transparency helps to motivate employees. Communicating openly and honestly allows employees to understand the bigger picture.

It helps them understand how their efforts contribute to the goals and objectives. Open communication fosters an environment of trust. Employees know that they are part of the process.

Hiding information can quickly lead to feelings of distrust. It can open the door for false narratives.

Will the information be helpful or distracting?

Transparency is a spectrum. You cannot make everything 100 percent public. If you did, you could be wasting people’s time, confusing them, or causing them strife.

Everyone has a capacity for information. Do not overload folks with every detail of what’s happening in marketing, support, or design.

Too much transparency can be distracting and can result in rumors and gossip. As a leader, it’s essential to ask yourself the following things -

  1. In what cases is transparency appropriate and helpful?
  2. In what other circumstances is it distracting or a burden?
  3. Are you transparent, just for the sake of being transparent, or are you genuinely trying to help people make better decisions?
  4. Are you transparent to gain more trust?

How do I land in the middle of the ‘all or nothing’ spectrum?

When disclosing things to your team, keep in mind that you don't have to share everything. Use your critical thinking skills to determine what your team needs to know and what they can do without.

Ask yourself the following questions -

  1. How will transparency help your company’s current situation?
  2. How do you prove yourself useful or helpful to your employees?
  3. How can they go about their work productively and effectively?
  4. Is your transparency aiding them in making better decisions? If not, then it’s best to keep it to yourself.

Final Takeaway


Workplace transparency is proven to breed long-term success. Whether you are a new CEO (Chief Executive Officer) or a new COO (Chief Operating Officer), or a new CFO (Chief Financial Officer) or a newly appointed Vice president, or a member of the board of directors, transparency is the key to your success.

Ensuring that transparency is implemented properly will create trust between employers and employees. It will help improve moraleand lower job-related stress, especially important during the Covid-19 pandemic.

Transparent workplaces increase employee happiness and boost performance. Most importantly, being transparent costs nothing, which gives it an exceptional ROI. Hence, being a new CEO, you must implement transparency in your leadership skill list.

Transparency has become a new management buzzword. Ten years ago, an employee might not even question a management decision their executive team made in secrecy.

But today, employees expect companies and their leaders to be transparent. It’s no longer enough to give orders and announce decisions–employees want to know why and how.

Companies can, of course, choose not to divulge that information. But, the risk of public backlash is higher. With social media and sites like Glassdoor, unhappy employees can publicly air their grievances and risk an external backlash.

Employees tend to be more successful when organizations are more transparent. Transparency increases employee engagement, robust company culture and fosters comfort. It allows employees to communicate freely. A transparent work environment also helps employees feel valued and encourages creativity.

Transparency isn’t about blurting out whatever comes to mind. It is about understanding the benefits of honesty and communication in your organization.

I think the currency of leadership is transparency. You’ve got to be truthful. I don't think you should be vulnerable every day, but there are moments where you’ve got to share your soul and conscience with people and show them who you are, and not be afraid of it. - Howard Schultz

Knowledge is power. The leadership lesson to take away is that transparency, truth, and openness spread knowledge. It empowers people and businesses to do better work together.

This article is written by Tanya Ahmed, a Digital Marketer of Vantage Circle, a cloud-based employee engagement platform. She is a leadership enthusiast with a post-graduate MBA in Leadership from Queen Mary University of London. Her experiences range from various fields, including Customer relationships, Content Creating, Sales and Marketing. For any related queries, contact editor@vantagecircle.com.

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