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I’ve heard it said a few times that sharing the project budget is not a good idea.
I don’t understand why this is the case, but they are stakeholders too. It is important to be transparent about the budget and how it was created, as well as how you spend it. It helps project teams come together with a common goal and builds trust in the way things are being done.
Vineet Nayar discusses 5 ways transparency can help build trust among stakeholders in his book, Employees first, Customers second: Turning Conventional Management upside Down.
Let’s take a look at them now.
1. Understanding the larger picture
Nayar writes that transparency ensures that all stakeholders are aware of the company’s vision, and they understand how their contributions help the organization achieve its goals.
It is difficult for project team members to contribute effectively if they don’t know the larger picture. If budget members don’t understand how the project is progressing and what their elements cost, they can’t work as efficiently to complete the task.
2. Personal commitment
Nayar claims transparency ensures that every stakeholder has a deep, personal dedication to the organization’s goals. I disagree.
Transparency is a key component in building trust, but it’s not the only way to get people to feel personally committed to a project.
3. Gen Y is known for transparency
The younger members of the project team will expect transparency and will be suspicious and distrusting if they don’t. Nayar says, “They publish their lives in public domains.” They expect nothing less at their workplaces.
There is more to this story than he reveals in the book. This is especially true given the fact that the world has changed a lot since the time he wrote it. Transparency is still important. Software tools are built with audit trails and streams that clearly document what happened.
Transparency regarding the budget and other elements of the project is a way to build trust among team members of all ages. While Generation Y team members might have different expectations about what is appropriate to share with each other, sharing (or not sharing!) will have the same impact on trust levels and help team members from different generations work together.
4. Transparency in the corporate world promotes transparency with customers
Nayar believes that customers should share their ideas with companies in an information economy. This is how we learn what products customers want, how their lives are changing and what would make our lives easier. They might also have ideas for solving problems related to our products or corporate challenges.
Nayar asks, “Why would a customer share information with a potential partner like ourselves if that company doesn’t trust its employees enough?”
This is a valid point. Although I wouldn’t recommend sharing the project budgets with customers (unless you work in the public sector, which is expected), it’s a good idea for suppliers and partners to share the budget projections.
Why would you? It will allow them to pitch their services at a fair price, which is a win-win for both of you.
One case I was privy to was that a supplier decided not to submit a bid for work after they saw the budget figure of the company. Both the supplier and the company both saved a lot of time during the tendering process.
You can share your budget numbers with people outside of the immediate project team. Consider reasons why you shouldn’t and then critically evaluate those reasons to determine if they still hold up.
5. Contractors benefit from transparency
Finally,