Transparency in business is a new trend.
How many of us understood how many calories we were consuming at our favorite restaurants before that feature on menus became a trend? It influences what I order today.
Transparency is the new model. How have you adjusted as you lead your firm?
Without transparency in business, you empower the rumor mill in your organization. My experience with the rumor factory is that it is rarely accurate and does not give the company leaders the benefit of the doubt. Openness and vulnerability over time create an environment where trust is built and maintained.
We begin the transparency journey with the first step – some hard questions. Do you admit your mistakes? How do you explain setbacks? What do you do when a valuable employee departs? Do you blame and complain? How often do you tell the truth and avoid the spin factor?
As leaders we are held to a higher standard, now more than ever. Therefore, we must be open, honest, and straightforward about our operations and strategies for the future. Transparent companies share information relating to company performance, revenue, processes, pricing, and business values. When things go wrong in business, transparent companies don’t try to hide it. Instead, they’re upfront about the issue.
Benefits of Transparency in Business
Transparency in business builds trust with employees and clients. In fact, one of the mantras of one of our client CEO’s is “bad news does not get better over time.” Employees and clients insist on doing business with companies they trust. Even when the news is not pleasant, we should be honest and share it in order to build trust. I find that moving through conflict and difficulty can cement trust in internal and external relationships.
When employees trust their employers, there’s an increase in advocacy, loyalty, engagement, and commitment. If you want employees to trust you, be transparent with them. You just may see that decline in turnover and spike in productivity that all businesses desire.
You may be wondering, “Can we be too transparent?” Absolutely. We need to guard our business models or technical expertise so that competitors don’t copy our unique solutions. In some industries it is appropriate to have confidentiality agreements and non-compete clauses in employee contracts. We must guard our competitive advantage.
Ways to Promote Transparency
Share Information with Your Employees. Write an internal news article with regular frequency to give your employees the last business news. Host meetings with employees that are a two-way communication between key leaders and line employees. Answer questions honestly and openly. Use your managers to relay news to their employees and ask employees what they heard to make sure the cascading message is forthright. Explain the facts about revenue and pricing structures. Compare your strategies to your competitors. Admit mistakes and how the firm is rectifying them.
Affirm Your Values. This is hard work and if we’re not careful we will have a list that is too long and not memorable. I heard Patrick Lencioni say in a conference that if we have more than three priorities, we have no priorities. Can you distill your values into three distinct statements? As these three values inform our decision-making and our actions, others will see us as trustworthy and authentic. When measuring performance and strategies, the values should be front and center. Employees observe what we do much more that what we say.
Don’t Spin; Tell the Truth. People can always tell when we are in
“spin mode”. What have you learned from
your mistakes and failures? Be human and
connect to the other humans in your organization. Share information with honesty and provide
solutions for repairing the mistakes or building on the lessons learned. Give credit to the true contributors in the
organization. Highlight successful
projects and let the performers receive the credit that is due them.
Though it is not easy, transparency in business builds trust and trustworthiness. Over time transparency increases employee engagement, client loyalty, company revenues, and innovation. It is well worth the effort!