Effects of Unshared Knowledge on Trust

Imagine two people playing chess, but one can see the entire board while the other sees only half. That’s information asymmetry. It’s when one party has more or better information than the other. In the world at large, it’s the reason why someone buys a used car with hidden faults or why governments sometimes make poor decisions. Information asymmetry creates an imbalance of power, leading to unfair outcomes, inefficiencies, and mistrust. In business, this imbalance can make or break a deal. Think of the 2008 financial crisis. Banks had detailed insights into the risky mortgage-backed securities they were selling. Investors didn’t. The result? A global economic meltdown. Or consider the early days of eBay, where sellers knew the true value and condition of the items, while buyers took a leap of faith with every bid. ❌ Within organizations, information asymmetry is insidious. It creates whisper networks where some know, and others guess. It blindsides junior employees and leaves leaders unaware of brewing issues. ❔ Why does it happen? It happens because information is power. In organizations, people hoard information to maintain control, gain advantage, or simply out of habit. It’s easier to work in silos, and often, we assume others know what we know—when they don’t. ❔How does it happen? ➡ Up: When managing up, employees may withhold critical information from leaders, either out of fear or to shape perceptions. ➡ Down: Leaders might not share the full picture with their teams, thinking they’re protecting them—or just because they don’t think it’s necessary. ➡ Sideways: Between peers, information asymmetry can occur when teams don’t communicate openly, leading to duplication of work or misaligned goals. 💔 The Fallout Information asymmetry erodes trust. It leads to poor decision-making, inefficiencies, and a lack of cohesion. Projects get delayed because someone didn’t know a key detail. Strategies fail because the right information didn’t reach the right person at the right time. And in the worst cases, it creates a toxic work environment where people feel isolated and undervalued. 🤕 How to Fix It? At the organizational level: Create a culture of transparency. Encourage open communication, regular updates, and cross-functional collaboration. Implement systems that ensure information is accessible to everyone who needs it. ➡ At the team level: Foster a culture of sharing. Regular check-ins, open forums, and collaborative tools can help ensure everyone is on the same page. ➡ At the individual level: Be proactive. Don’t wait for information to come to you—seek it out. Share what you know freely and ask questions when you don’t understand. 🌏 The Bigger Picture Information asymmetry is a leading cause of misinformation, lack of productivity, and distrust. It’s not just bad for business; it’s bad for the world. We need to bridge these gaps, because in a world where everyone can see the full board, we all stand a better chance of winning.

Building Trust Through Transparency in Leadership Early in my career, I worked at a company where the leadership implemented extreme secrecy. The various project teams were separated into different halls, with combination locks required to enter them (access cards didn't exist yet), teams were not allowed to share information. There was always a sense of hush-hush in the office; it was all a bit intimidating. Different people had access to different information, not necessarily based on need to know, but on whom they knew. This was about 30 years ago but I do remember it resulted in a strong us vs them (management vs staff) feeling, which led to a reduced sense of ownership and commitment. When information leaked the management would run investigations to find the leak rather than understanding the root cause. I started looking for options and was one of the first to leave. It eventually led to high attrition. They tried to retain people by paying very high salaries but even that didn’t work in the long run. Fortunately, practices have changed since, even in larger corporations. The emphasis has been more and more on employee engagement and helping team members to grow and advance themselves. Trust has been recognized as playing a huge role in getting business done more smoothly and efficiently. One of the bases of trust is transparency. Where there is secrecy, there can never truly be trust. Withholding information from someone is like saying "I don't trust you to act responsibly with this information." Authentic HR leadership is grounded in transparency, a commitment to openness that differentiates itself from the shadows of secrecy. Defining transparency within HR practices sets the stage for a workplace where trust can be a fundamental building block. Secrecy is not always intentional. I have seen it be a consequence of poorly set up communication channels and structures. Unfortunately, the effect on the employees is the same, whether information is withheld intentionally or incidentally. By adopting effective communication strategies and sharing information openly, HR leaders create a culture where employees feel not only informed but also valued, fostering an environment of trust and collaboration. It goes even further: transparency empowers employees by providing them with information and insights. HR leaders who prioritize transparent practices create a culture where employees feel informed, heard, and an integral part of the decision-making process, contributing to a workplace characterized by mutual respect and empowerment. Finally, consistency in decision-making and transparent handling of challenges are pivotal trust-building practices. HR leaders who demonstrate transparency in their actions foster a culture of accountability, laying the foundation for a workplace where trust thrives. #trust #transparency #transparentleadership #globalleadership #gccs #authenticity Sunil Khunteta . Ruchira Garg what is your take on this?

Why do most leadership teams struggle with execution? Because they believe information sharing happens naturally. Here's my strategic approach to help you build unstoppable teams: The reality is, most execution failures stem from knowledge gaps between leaders and teams. The secret lies in intentional communication bridges. Benefits of this approach include: - Higher team performance - Fewer costly mistakes - Increased trust and morale - Lower employee turnover By adopting strategic knowledge-sharing, you eliminate confusion and build teams that execute flawlessly. Here's how to think about it: - Assumption is the enemy of execution - Knowledge gaps are leadership failures - Transparency builds unstoppable teams So when you lead your next initiative, here are 5 things to consider: - Over-communicate key information - Verify understanding through questions - Make knowledge a shared organizational asset - Document critical processes - Eliminate "we vs. they" thinking Here's an example: Instead of assuming everyone "got the memo," try this: - Schedule follow-up discussions - Create accessible knowledge repositories - Ask specific questions to verify understanding - Encourage questions without judgment - Build transparency into your leadership approach Leaders who bridge knowledge gaps create teams that can handle any challenge, from boardroom to battlefield. ✍️ Your insights can make a difference! ♻️ Share this post if it speaks to you, and follow me for more.

Want to instantly raise trust on your team? Share more. Not everything needs to be “need to know.” When managers withhold information, even unintentionally, it signals a lack of trust. But when you share insights—especially ones your team typically doesn’t have access to—you send a very different message: I trust you to understand the bigger picture. Transparency isn’t about oversharing. It’s about cluing people in—so they feel included, not isolated. Because people don’t fear change as much as they fear being left in the dark.

People leaders - Are you ABSOLUTELY SURE employees trust you? Consider this scenario: You delay sharing details about an upcoming restructure, believing it protects morale. Word leaks before you and your leadership is ready to share. Rumors spread, tension builds and trust erodes. By the time the official message is delivered, credibility has already taken a hit. Here's the challenge: Trust breaks down when leaders hold back information. Silence creates space for speculation. Once trust is lost, it takes time — and action — to get it back. What to do: Transparency isn’t about sharing everything. It’s about saying what needs to be said with courage and compassion. It is addressing the elephant in the room using clear and concise messaging. Trust and credibility isn’t built on perfection. It’s built on consistency — Monday to Monday®.