Let's Be Real: Why Transparency in Business Should Be the Norm
The concept of “need to know” has undergone a significant shift in recent years. With the entire universe of information only a click away and social media platforms keeping everyone constantly connected, individuals increasingly feel they need to know -- and share -- everything.
Whether it’s product reviews, political opinions, innermost thoughts or even a photo of today's lunch, people are living their lives completely out in the open, laying bare all manner of minutiae online.
This expectation for transparency has extended beyond personal interactions and is now a reality in business. Across all industries, transparency has never been more important to a successful business model. Withholding or cleverly reshaping information is no longer a viable option for this new era of consumers who are savvier than any generation before them and for whom skepticism seems to be a default setting. In order to build brand loyalty, companies need to first build trust.
There's a common misconception out there about transparency. Far too often, companies see it only as a tool to be used when owning up to a mistake or righting a wrong. This approach is shortsighted and isn't an effective way to build trust. Customers will be far more forgiving of mistakes if a company has a history of being forthright with all interactions -- not just the negative ones.
Related: Fakepreneurs, a Modern Epidemic
Instead of being scared by transparency, businesses should embrace it as way to improve service and increase customer loyalty. A recent study from Harvard Business School took a look at the concept of transparency in a restaurant setting where the cooks and customers could literally see each other during the food prep and dining experience.
The results showed a striking improvement of 17 percent in customer satisfaction and 13 percent faster service when customers and cooks can see each other. This is a fascinating look at the power of transparency, and it indicates that customers are happier when they feel they've been made part of the process. Plus, I have a feeling that if we all knew our customers were able to see our every move, we’d be more thoughtful and precise in the decisions we make.
And it’s not just consumers. Employees put a high premium on transparency in their interactions with different levels of management, going as far as naming it the top factor in determining their happiness and satisfaction in the workplace. No one wants to work for a company if they don’t know what it stands for and what its long-term plans are. This is just further indication of people’s growing need to know about every aspect that affects their lives.
I believe that more companies will see success if they begin to view their customers as essentially an extension of their internal operations teams. The actions of a single morally corrupt company have the power to paint an entire industry in a bad light. But when you practice transparency, you don’t need to worry about being tainted by association when a company in your industry does something that lacks integrity.
There are many examples of how companies are embracing transparency in their daily operations. Social media company Buffer got a lot of attention last year when it announced it had made all employee salaries public information. Nordic bank Nordtec recently released a series of online anti-marketing ads aimed at demonstrating exactly how transparent they are in a humorous way.
In my own company, we started something called the Transparency Project, an online web series that provides a behind-the-scenes soup-to-nuts look at how MegaFood operates. Nothing is off limits, and our goal is to engage and inform anyone who's interested in seeing what goes into making our supplements. It was an experiment for us, and it seems to have paid off.
Regardless of the industry, there are a few simple steps every company can take to become more transparent.
1. Be personally transparent
Pick a medium or two (LinkedIn if your customers tend to be other businesses; Twitter or Facebook if consumers) and share your personal thoughts, ideas, likes, dislikes -- the concept of transparency must start at the top. And don't farm out your social media either -- do it yourself!
2. Be internally transparent
Transparency starts from within. If not everyone in your company believes the company -- or CEO -- is transparent, then they'll have a hard time portraying transparency to the marketplace. Be an open book company, and do things like hold town halls to update the entire staff on progress, risks and opportunities.
3. Be transparent with your corporate objective and then give updates
For example, let people know that you're trying to find a new supplier in order to take your quality to another level, and ask for their help. Be careful not to make promises though, and share all sides of any argument.
4. Be bold
If people come to trust you and your company through transparency, they'll be far more forgiving when you explain why something didn't work or when you make a mistake. Don't be afraid to experiment with transparency and look for innovative ways to develop a deeper, trust-building dialogue with your customers.
It’s clear that whether it's in dealings with consumers or internal practices with employees, there's a need for businesses to meet the expectation of transparency in a real way -- and not just as an afterthought or as a marketing tactic.