Why is it important to have transparency in your business? HR and recruitment consultant Gemma Hart explains the strategic advantages of transparency for a business, its employees, and its customers.
The future of business success depends on transparency. Both employees and customers are demanding more transparency from the brands they work for and buy from. As the world prioritises ethical practices and rewards businesses working to drive positive change, transparency at all levels of an organisation is more important than ever before.
But what exactly is transparency in business? According to Forbes: “Business transparency is the process of being open, honest, and straightforward about various company operations. Transparent companies share information relating to performance, small business revenue, internal processes, sourcing, pricing, and business values.”
Transparency in business is changing the way we work for the better. In this article, we will be discussing the importance of transparency in business and the benefits.
Why is transparency important in business?
There are many reasons why transparency is important in business and that’s because transparency affects people at all levels of an organisation.
Transparency in business helps drive significant progress, both on an individual and a company-wide level. It also drastically increases employee and customer satisfaction so that you can enjoy more loyalty, faster growth, and a happier workplace.
What are the advantages of transparency in business?
Now that you know why transparency is so important in business, let’s discuss the benefits as they both reiterate the importance of transparency and show the results.
Transparency establishes trust
The success of your business depends significantly on establishing trust. When we think about establishing trust in business, we typically think about the employer/employee relationship or the business/customer relationship. However, transparency in business - perhaps most importantly - establishes trust with your investors. The more transparent you can be with your investors about the financial state of your business, the more trust will be established and the more likely investors will be to invest in your company.
Forbes confirms: “nothing could be more important than the relationship between entrepreneurs and investors. Investors have what entrepreneurs need: capital and know-how [...] On the other hand, entrepreneurs have what investors want: a vehicle that offers the potential for a return [...] These separate entities share common and joint interests: growth of the business.” The more transparent you can be with your investors, the more effectively you will set your business up for success.
Transparency strengthens relationships
Transparency and accountability in business are some of the best ways to strengthen the relationship between your organisation and the people who work there. According to ZDNet: “Organisations can reap rewards from being transparent. Nine out of 10 people (89%) said a business can regain their trust if it admits to a mistake and is transparent about the steps it will take to resolve the issue. A similar ratio (85%) are more likely to stick with them during crises.”
Transparency helps employees feel like they are part of something bigger. It invites them to really be a part of your business and its vision. It gives them ownership over their role, provides them with confidence in your leadership, and often means they will remain loyal to your company for longer.
Transparency fosters a healthier work culture
Your work culture may be contributing to high levels of employee stress. If you want a healthier work culture, you need to prioritise transparency. After all, a transparent workplace is a pleasant workplace.
Transparency fosters trust and open communication. It strengthens relationships between employees and their employers and helps nurture an environment of collaboration. Rather than fighting for a position at the top and pulling down others along the way, employees will be more likely to support their colleagues and stay motivated even when the going gets tough.
According to Entrepreneur: “Internal transparency - the practice of maintaining open lines of communication with employees, and remaining honest about company operations - is positively correlated with higher employee morale (and therefore, productivity). Transparency in this internal context also builds trust, and makes employees feel that they’re working for a company with higher ethical standards.” Companies thrive when they have a happy, healthy workforce and transparency is the key to achieving that.
4 ways to increase business transparency
How you define transparency in business is up to you. After all, there are many ways you can increase business transparency. Below we have listed the 4 methods we think are most important.
1. Own up to your mistakes
The key to being transparent in business is, to be honest, and own up when you make a mistake. People respect others more when they can admit being at fault for something. Pride within leadership is a sure-fire way to hold your business back from success. Admitting your mistakes, whether to your employees or customers, is not only the right thing to do but it is the best thing to do. It sets a good example, it helps build trust, and it teaches others you can be relied upon to be transparent no matter the circumstance.
2. Show customers behind-the-scenes
If you want to increase customer loyalty and investment with your company, you need to show them behind-the-scenes of your organisation. This can be done via social media, blog posts, newsletters, and company announcements and is a great way to connect with your customers on a deeper level and help them to feel more connected with and involved in your business.
3. Prioritise clear communication
Clear communication is one of the most important aspects of running a successful business. Whether it’s communication with your staff, your suppliers, your stakeholders, or your customers, clear communication helps keep everyone in the loop and on the same page.
4. Let your ‘Yes’ be ‘Yes!’
At the end of the day, you can be as transparent as you like but if you don’t deliver on what you promised, your clients, employees, and customers will feel let down. So, our last piece of advice when it comes to being transparent in business is to always let your ‘yes’ be ‘yes!’ Basically, if you say you’re going to do something, you need to do it.
In the same way, if you say your business already does something, you need to be doing it. Living up to your claims and delivering on what you promised is essential for the continued growth and success of your business.
So, there you have it; why it is important and beneficial to have transparency in business. We hope this article has been insightful and that it has inspired you to make some positive changes within your business.
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Written by Gemma Hart
Gemma Hart is an independent HR professional working remotely from as many coffee shops as she can find. Gemma has gained experience in a number of HR roles but now turns her focus towards connecting with a wider community and sharing her thoughts and advice on workplace wellness and engagement within companies.