It seems like the new buzz word is "transparency." We happen to be living in an era of massive change and that creates problems -- and opportunities. Let's look beyond the textbooks and business school talk to analyze the hard truths of creating leadership that centers around transparency.

When I think of transparency, my first thought is about sharing what I am really thinking. In order to be fully transparent, you must have massive courage to voice your ideas and opinions so that they are discussed openly. This allows your ideas to be debated freely. And yes -- we want our employees to engage in "healthy disagreement." It is even the basis for one of the best selling books on teams, The Five Dysfunctions of a Team by Patrick Lencioni.  

"Radical transparency" is creating a culture that is direct and honest in communication and sharing of company strategies so that all people are trusting and loyal to the continuous evolution of the organization. For leaders, radical transparency is a way to build trust with their employees.

The Ugly Side of Transparency

Transparency can create deeper relationships. However, it can also cause resentment within the culture. When you set out to have transparency, some people will not be able to handle that level of honesty. People begin to internalize the feedback, limiting their ability to be productive.

Doubt also can fester inside you as the leader with all the hard conversations. Knowing exactly what people think of you and your ideas sound great -- but the reality is hard. This can be overwhelming when it comes from all directions within your company. I am often in private conversations with leaders who are growing at break-neck speed -- the conversations are tough when I ask questions that challenge their identity or question their confidence -- yet that is what they need.

I remember talking with a leader as he began to show signs of anxiety as we probed his leadership. He responded with shame that he was not the leader he wanted to be. He told me, "This would have been a really hard conversation to have in front of my team."

Ray Dalio on Radical Transparency

Best known for his amazing performance in the stock market for decades, Ray Dalio is the founder of the world's biggest hedge fund firm, Bridgewater Associates, which manages $160 billion. Dalio's net worth is $17 billion according to Forbes. In his book, Principles: Life and Work, Dalio shares how important "radical transparency" is for his success.

"I want independent thinkers who are going to disagree," he says "The most important things I want are meaningful work and meaningful relationships. And I believe that the way to get those is through radical truth and radical transparency. In order to be successful, we have to have independent thinkers -- so independent that they'll bet against the consensus. You have to put your honest thoughts on the table." Then, the best ideas rise to the top.

Inside a recent TEDx talk, Dalio shares a story on how an employee called him out for the poor performance in a meeting.

When you decide that you want to embrace a culture based on transparency, you have to be willing to have thoughtful disagreements that others are not courageous enough to have.

1. Find mutual agreement individually.

To make a big culture shift that helps others develop their own identity within the organization, start by getting each person into a private conversation. Dalio said the two key questions to this are, "Should I tell you what I really think?" And, "Can you be free to tell me what you really think?" Once everyone is in agreement on this, you can begin to share honestly with each other.

2. Design the boundaries of radical transparency.

Radical is by definition of going as far as possible. Decide on boundaries that are right for your culture. Most of the companies I work with on this draw a clear line at the point of legality. Take HubSpot, for example. When this company was faced with going public, their radical transparency was challenged through laws. HubSpot will share everything that is legally able to share -- which means they don't share salary data, as it is not owned by the company alone.

3. No more "closed door" conversations.

Practicing being honest and sharing with others how they can improve at every opportunity. As the culture sees the benefit of this, it is going to be easier. You must make a conscious effort to reduce the secrets and having closed-door conversations.

Continuous growth requires deeper conversations and when I see leaders embrace radical transparency it can unleash new energy into the culture.