Edward Snowden’s revelations of what the National Security Agency knows about us have gotten us talking about the role of secrecy in a free society.

This is an important conversation, despite the fact that Snowden and the press seem to have shifted from principle-driven to ego-driven tactics, taking the media discussion on this matter with them. So even though the important debate on secrecy versus transparency is fading from the headlines, we can look to this discussion for leadership lessons. In particular, we can look at how our businesses use information to gain (or lose) market advantage and where our greatest vulnerabilities may lie.

Secrecy has its place in business, and it’s appropriate that certain decisions get made behind closed doors and that some of them stay there. This is especially true regarding information assets — intellectual property, competitively driven product improvements and market-driven roll-out calendars (think Apple). However, there is other sensitive information to manage, and it’s in this gray area that too many leadership cultures take secrecy to the wrong extreme. They often pay for it in eroded stakeholder trust and engagement.

Ironically, secrecy doesn’t always protect us; it can make us vulnerable, too. Transparency doesn’t always give power away; it can also free us from having to worry about acquiring information so we have more energy available to use it.

Here’s a simple test to see if your company culture’s level of secrecy is contributing to your market advantage or detracting from it:

Are your high-potential leaders spending their energy doing what it takes to create market advantage or are they caught up in a personal quest to finagle their way “behind the closed doors” of leadership meetings where decisions are made?

The former? Good! The latter? Bad! If your middle and senior management ranks are spending their precious energy strategizing on internal politics, they are by definition not spending that energy sussing out what’s really going on with prospects, customers, partners and suppliers. They’re becoming blind spots in the company’s ecosystem.

Most companies have little to fear from an internal Edward Snowden, but that doesn’t mean corporate cultures don’t suffer a different kind of “Snowden effect” when secrecy is the rule.

Here are the three most destructive results of leadership cultures that operate in secret.

  1. Gossip and fear. When no one has the facts, gossip becomes a legitimate form of information. People won’t talk about nothing, so in an information vacuum, they make things up and gravitate to discussing what makes them afraid. Before long, the goals leaders are working to further throughout the organization encounter resistance from within, bred of gossip and fear. Why make so much extra work for yourself?
  1. Us versus them. If the threshold into leadership is a big deal, everyone not inside knows they’re on the outside. Being so clearly outside the leadership sphere where important things happen, non-leaders act like non-leaders and have little incentive to help the company operate more effectively in the market. If they are engaged, too much of their effort turns towards a personal agenda to get into the leadership circle and become an “us” instead of a “them.”This inward focus robs decision-makers of the eyes and ears of their employees where it matters most — with customers, prospects and other business partners. Look at the simple human dynamics and incentives your leadership culture sets up for your employees outside the executive suite. Is your system making them an ally in their current job or just creating incentives to become more important?
  1. Talent blindness. If a secretive leadership culture persists, some up-and-comers will twist themselves into knots to get in (thus the distractions mentioned above). However, some of your most promising talent will not. Excessive secrecy will drive away those who don’t want to be distracted with internal games; they’ll end up in more entrepreneurial environments where their talent and skill matters more than the ability to get behind closed doors. If the leaders are busy maintaining the security of the door, they may never notice those who are not trying to get in until they’ve left the building, taking their talent with them.

I wish I could say that there were three easy solutions to fixing an organizational culture steeped in unhealthy secrecy. There are not. However, the most important starting point is within each leader himself or herself, and that is to overcome the personal fear of losing power by sharing information.

The higher you are, the greater impact you can have on the organization by releasing this fear in your day-to-actions. If you see opportunities to be more transparent, then do it within your sphere of control and start a conversation with other leaders. Take a stand for greater transparency. Do your best to turn transparency into a company value. Whatever you do it will make a difference, and even more importantly, you can shift your energy away from hoarding information and toward using it wisely.

Dana Theus is president and CEO of InPower Consulting, creating business cultures by design that integrate the emotional intelligence lessons learned from studying women in leadership, and is a regular contributor to SmartBlog on Leadership. Follow her on Twitter at @DanaTheus and on LinkedIn.

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3 Responses to “Behind closed doors: Avoiding the corporate “Snowden effect””

  1. passing through says:

    Simply brilliant spot on article!

  2. James Strock says:

    Terrific observations. If a leader's life and work are aligned, transparency can be a major plus.

  3. Dana Theus says:

    You're right! Balance is key, but erring on the side of transparency is always a good practice. Thanks for your comment.

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