Transparent decision-making processes aren’ necessarily a good thing for executives and the companies they run. The reason: Company heads may end up never hearing honest, valuable perspectives.
Consider what might happen with an advisory committee appointed by an executive to help make a big decision. Two researchers at the Kellogg School of Management at Northwestern University found that the committee may have more value if allowed to do its job in private, rather than with the utmost transparency, because candor would be more likely.
An article on the KelloggInsight web site details the work of both researchers: Ronan Gradwohl and Timothy Feddersen.
Their argument is that having backroom discussions and other private conversations can encourage advisors to be more honest in sharing information. But individuals in a transparent decision-making group may feel pressure to let their dissenting views fall quiet in order to present unified recommendations. A committee that knows its work is going to be transparent will likely feel pressured to shape the information one way or another, or leave out crucial, dissenting ideas, the researchers say.
In other words, remove the spotlight, and an executive will likely get more honest perspectives.
For the full article about the Kellogg researchers’ work, click here.