Management: give employees MORE privacy instead of less (research)

We generally assume that the more we can observe coworkers, the more productive they will be. Research now shows that this may not be the case – on the contrary even.

Harvard Business School PhD candidate Ethan Bernstein conducted research in a Chinese mobile phone factory that showed this. He calls it the “transparency paradox”. We think people work harder and more productive if we can see them, but it’s the other way around. We should allow them some visual privacy.

Why? Because they will try to get some privacy anyway, and this concealment behavior actually costs the company money. It breeds “hiding behavior”, or “encryption” of what exactly they’re doing.

On the other hand “creating zones of privacy may, under certain conditions, increase performance. (…) even a modest increase in privacy sustainably and significantly improves line performance.”

Privacy seems to be very important in allowing workers to deviate from standard practices and actually improve processes. It also helps workers concentrate.

As Bernstein notes in his paper:

Management usually assumes that the more we can see, the more we can understand about an organization.

This research suggests a counteracting force: the more that can be seen, the more individuals may respond strategically with hiding behavior and encryption to nullify the understanding of that which is seen. When boundaries to visibility fall, invisible boundaries to accurate understanding may replace them at a significant cost. In this research, that cost was a 10–15 percent detriment to performance.

Hence the transparency paradox: broad visibility, intended to increase transparency, can breed hiding behavior and myths of learning and control, thereby reducing transparency.

Conversely, productivity can actually increase within the boundaries of organizational modules, or what the operators called zones of privacy, when the visible component of transparency is decreased or limited between them.

The point is not to say that transparency is a bad idea, he warns. Instead he thinks the question should be how transparency is enough for management to obtain its goals:

…it’s what, and how much, individual observers should see in order to achieve it. Because the mere presence of a manager, in line of sight of an employee, may affect employee performance in negative ways.

Basically, Bernstein says that you should trust coworkers to do their job properly, an idea that we also encountered when writing about the great success of Finnish schools recently:

Management by walking around may sometimes be inferior to management by standing still. In this study, creating zones of privacy around line workers’ activities did not result in slacking off or cutting corners.

Instead, the zones of privacy improved transparency within the line and, with it, improved productive deviance, experimentation, and focus on productive work. While hourly defect-free production results remained transparent to all via the IT system, line activities remained visible only to those who were best suited to innovate: the line operators. The establishment of a zone of privacy around the line allowed improvement rights to be owned by those on the inside, encouraged more transparency within the visibility boundaries, and ultimately enabled an increase in organizational performance.
Visual privacy is an important performance lever but remains generally unrecognized and underutilized. Paradoxically, an organization that fails to design effective zones of privacy may inadvertently undermine its capacity for transparency.

Spotted by @stefamichielsen. Read more here.

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About the author

Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).

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