Transparency in business – it’s become quite the buzzword. And like all buzzwords, it’s easy to think of it as just another fad. It’s also easy for an organization to pay lip service to the idea without ever following through. But transparency is important for everyone: employees, leaders, customers, and — for publicly-held companies — stockholders.
Here’s how it impacts each group.
When employees are clear about the “why” behind their assigned projects and tasks, they’re much more prepared to do what needs to be done – which could include them making suggestions for improvements that would otherwise never have been imagined, simply because there wasn’t enough information available.
Educate every employee about the importance and relevance of what they’re asked to do, and you’ll have a more motivated, thoughtful, and productive workforce. Keep them in the dark, and you’re inviting mistakes, lackadaisical performance, and disengagement.
When leadership operates in an open, honest, non-judgmental environment, they’re able to respond more effectively and problem-solve more quickly. Instead of wasting time focused on “CYA”, they can collaborate on innovative options for growth.
Foster a culture that encourages mutual support, and you’ll have an organization that’s flexible, responsive, and attractive to customers and shareholders alike. An atmosphere of finger-pointing and fault-finding, on the other hand, increases the risk of serious errors and reduces the likelihood of sustainable growth.
When customers feel that an organization is up-front, honest, and fair in its dealings, they’re far more likely to buy.
Tell heartfelt stories about why and how your organization operates, and you’ll attract the type of customers and clients you want to do business with. Inconsistent communication or secretive behavior will break your organization’s brand – and drive customers away – in a heartbeat.
When financial reports and organizational principles are clear and straightforward, a company’s market valuation is significantly higher. It really is that simple.
Explain your financials and operational guidelines clearly, and the stock market will reward your transparency with a higher share price. Cloak financials and operations in complex language, and your share price will suffer.
There are any number of studies showing the truth of these points. But it’s also just basic common sense!
Recommended training resource: Our video program The Clarity Imperative uses real companies and their employees to demonstrate the power of clarity and simplicity in defining organizational goals and values. The video shows how organizations are most successful when employees at all levels know (and can easily articulate): who we are, what we do, and where we’re headed.