We believe that sustainable business relationships are built on trust. It represents a solid foundation on which to grow. It does take time to get there but once you do, your business will thank you for it.
What is a sure-fire way to build trust? It all starts with being transparent in your operations and the way you conduct business. Transparent companies have a greater value placed upon them by customers and other stakeholders.
As the world is starting to prioritize ethics and social responsibility over the cost of a service or product and even over the brand itself, companies promoting business transparency are rewarded by the wider public.
Put simply, being transparent and promoting positive social change can set you apart from your competitors. Many believe these traits are slowly but surely becoming a key differentiating factor between companies people want to be associated with and companies that are best to be avoided.
So, with this in mind, we want to explore the meaning of transparency in business, why it is so important, and how you can adopt it within your company.
Business Transparency - What Exactly Does It Mean?
In theory, it is not difficult to define transparency. It all comes down to being open, honest, and upfront about your various company operations — from performance and revenue all the way to internal processes, sourcing, and values. Business transparency implies that you are more than happy to share these with all stakeholders that have a vested interest in your company.
The defining moment, however, comes down to how a business reacts when confronted with negative publicity. A transparent organization comes clean straight away and does not shy away from openly discussing a potentially negative scenario.
Let’s take Whole Foods for example. Promoting themselves as a grocery store conducive to healthy living and carefully sourced products, the company has faced severe backlash when concerns over its product labels have come to light.
The company has been accused of mislabelling products as not resulting from genetic engineering also known as non-GMO. This revelation has been quite disconcerting for their customers who are very conscious about what they eat.
Confronted with negative publicity and the possibility of a class action lawsuit, Whole Foods has made business transparency a priority. Instead of shying away from the challenge, the company has faced it head-on and is on course to becoming the first national grocery store to offer full GMO transparency in terms of how its products are sourced.
The Importance of Being a Fully Transparent Business
Going back to our Whole Foods example, we would like to ask you a simple question — what was the benefit for the company to face head-on the negative publicity coming its way? The answer? Well, by being proactive and not hiding away a potential misfire in their operations, the company showed its customers and employees that transparency is the rule of the game and that they matter.
In today’s world, companies that guard their secrets at all costs run the risk of estranging their employees and diminishing their ability to achieve brand affinity in the marketplace.
Because everything is interconnected nowadays, companies that do well are the ones that share everything. From what their leaders do and staff diversity to the source and how they procure their materials.
With this in mind, let’s have a look at why is it so important to embrace transparency in your company and what you could stand to gain from doing so.
Transparency Has the Capacity to Attract Premium Talent
One of the perks of promoting a transparent workplace is that it brings with it increased employee engagement. This comes at a premium within an increasingly mobile and highly capable workforce. In fact, 87% of people surveyed as part of a study conducted by Slack, have said that they were hoping transparency comes hand in hand with their new job.
This shift in perspective means that employees are basing their decision on ethics as well. As such, transparency within your business could very well be the most valuable asset you could have in attracting premium talent.
Employee and Customer Relationships Based on Trust
In the eyes of potential customers, transparency is synonymous with being ethical. Research conducted by the consulting firm Label Insight has shown that 94% of consumers are more likely to purchase from brands they view as transparent.
If you are not forthcoming with the information your customers view as being pertinent to them, you run the risk of them seeking this information elsewhere. Why allow a third party to take them from you and enjoy the repeat business their customer loyalty would bring? You could easily do this yourself.
Customers aside, calls for more transparency are also coming from within a business. A Future of Work study has shown that 80% of employees want more openness from their leaders. Speaking of leaders, 55% of them believed their companies were transparent. In contrast, just 18% of employees agreed.
Taking into consideration the psychological safety aspect as well, it pays to aim for workplace transparency and give your employees access to the information they need. Doing so builds trust and high-performing teams.
Greater Business Accountability
Placing transparency as one of your company’s core values can be a most effective tool to generate revenue. Consumers are more than willing to pay more for products or services delivered by what they view as a transparent organization.
What’s more important is the increased business accountability you will bring to the table. Sharing data with employees and the wider public allows you to hold your business accountable and ensure that every decision made is in the company’s best interest.
Building a Transparent Mindset in Your Company
Transparency in a company is not built in a day. Business owners need to be fully committed to the cause. Becoming more transparent is definitely a long-term effort with a great return on investment as we have seen in the previous section.
How should you approach the shift in your modus operandi and become more transparent? We’ve come up with a few hints on what you should focus on. These include:
Clearly define what your business's core values are
Once the values you hold most dear are clear for everyone, it will be much easier for your employees to understand and follow them.
Encourage information sharing with employees
You shouldn’t keep in the dark the people that drive your business forward. Encourage your managers to relay information to their departments as often as possible and promote internal transparency.
Make your pricing policy as clear as possible
Most companies avoid making their pricing as clear as day out of fear of losing a sale if the price is a bit steep. However, you should be upfront with your pricing structure as this is the first sign that shows potential customers that you are a transparent business.
Be direct in your company-wide communications
Our message is clear here. Don’t beat around the bush when it comes to clearing the air on important issues such as price changes, a switch in personnel, and so forth. People prefer to know straight away rather than find out on their own news that might impact them.
Transparency Done Right - The Collabo Creative Approach
It is our hope that, by this point, it is clear to you how important transparency in business can be. After all, transparency fosters employee engagement across an organization, increases the chances of customer loyalty, and improves your chances of building a trustworthy brand.
The type of strategic change that comes with prioritizing transparency in a company, is the kind of project we are most equipped for.
To help you bring about this kind of change in your business, we would focus on two aspects:
Company culture
Any change within a business starts with looking at its culture. Implementing transparency across the board is no exception. Employing the techniques of design thinking, we will dissect your company’s culture and bring forth solutions to improve your company’s transparency.
In-depth interviews
Implementing such a shift in a company’s mindset should start with a complete understanding of the current status quo. Through in-depth interviews, we can find out exactly what your employees’, customers’, and investors’ stance is when it comes to business transparency. Once we know what your stakeholders expect, it will be easier to map out the steps needed to change your business for the better.
Bottom Line
As the mindset of customers, employees, and investors turns to ethics and transparency, your business will also need to follow suit.
Companies that are open and committed to driving positive change across a society, will immediately be rewarded by the wider public. Becoming the type of business that is valued by the modern customer starts with looking at your transparency policy.
On paper, becoming more transparent is not a difficult process. However, once you start putting into practice this philosophy, certain problems can arise.
If this should be the case for you and your business, do not hesitate to contact us. We love changing an organization’s mindset for the better.