As humans, we do not often like it when others know our personal business. However, as businesses, it is time to open our doors and embrace transparent business practices. In fact, we should welcome it. Transparency in business is crucial to building trust and setting expectations, both internally and externally.
If we; as consumers want to paint the full picture without any nasty surprises before investing in a product or company, doesn’t it make sense to offer that upfront without having to make the customer work for it? The prospect of having to answer for everything that goes on within your company can be uncomfortable for many, but in the end. Transparent business practices only breed a level of honesty, trust, and loyalty that not only resonates but will draw valuable customers and ultimately aids the development of long-lasting relationships.
Developing trust through transparent business practices.
But how do we build trust? Arguably the most impactful way to build trust is to embrace open & transparent operational practices. Any good business relationship is symbiotic and therefore requires an exchange from both sides, from the customer’s perspective, the monetary element is put on the line, whereas time, products and/or services are traded from the business. If a company wants to ensure they have good reason to convert the customer, to put their trust in them, offering full business transparency is a surefire way to reassure the customer that their sacrifice will be worth it.
Transparent operations require honesty in a means that is inarguable and obvious. When a company is open about its practices, there is voluntary accountability that ends up being woven into every interaction with the customer.
Conversations we need to be having.
Transparent business practices do not need to mean that if a customer asks a question, you are able to give them an honest answer. Successful companies practice proactive transparency – showcasing that your company wants to compose itself in an open and honest manner, is a refreshing and an intriguing incentive. “Considering about our pricing? Here is our company standard. We abide by this standard with all our customers so that everyone is benefiting the same. Company A isn’t going to get priority pricing rates over you, just because they’re bigger or more powerful.”
“Wondering where we source our materials or products? – here’s a list of our vendors. Furthermore, let us tell you about how we select our vendors. We know that the reason behind why business is done a certain way can tell a lot about our values as a company and we want to make sure they align with yours, too.”
These are conversations that need to happen from the very start in order to have the most fruitful results. Establishing trustworthiness and credibility from before the customer even goes looking for it is a sign that your company is going to do right by them from start to finish.
What about protecting my company?
Concerns about protecting a company’s trade secrets and what makes them unique is a valid concern when talking about business transparency. It is true that complete honesty and transparency can make a company vulnerable. There are many company operations that happen behind the scenes that business owners do not want to be privy to the public eye- and rightfully so. But transparency does not have to mean handing your business plan over to the local newspaper and broadcasting all the details of your operation. It simply means knowing where your value comes from and understanding the benefits of your customers knowing that too.
It is important for a company not to be too transparent, as competitors could take advantage of this, threatening your brand. Since this openness will be between business and customer, there are ways to protect your information from getting into the wrong hands. Confidentiality can be signed upon and contracts can have protective aspects to them that ensure that your transparency is only benefitting the two parties involved: you and your customer.
Most customers will not care about how the structure of your internal teams works, or how you calculate your spending for budgets. But if they understand, based on your communication, that your first priority is knowing that your customer is fully aware of everything that is relevant to them and the product or service they are paying for, they will assume that all the less important operations are also being handled with care and analysis.
The vulnerability that comes with openly discussed business practices may seem unnatural or uncomfortable because of the precedent that has been set by the last centuries of business-running, but vulnerability does not have to be a bad thing. At the end of the day, it is important to keep your company safe, and as long as efforts to avoid over-sharing are made, everyone will be protected.
Starting from the Inside out.
Though external transparency is extremely important for winning and keeping good business, internal transparency is equally as important. Just as much as an outside customer wants to be able to fully trust the company that they choose to give their business to, potential and existing employees want the same from the company they choose to invest and work in.
The first step in operational transparency within a company, between employer and employees, is clear and open communication. This often involves setting goals and expectations from the beginning, both for management and employees. Effectively communicating how the business is run and how the employee fits into that picture is crucial for being able to work well with shared vision and goals. This also allows the employee to be sure that the company’s culture and values align with their own, which also ultimately builds the strength of the company as a whole.
Transparency within a business also means that employees are more likely to trust and support their employers. This can only lead to positive increases in employee loyalty, engagement, and commitment- three things that are crucial to the success of any team. When employees trust the company they work for, they are more willing to work harder to ensure that everyone is succeeding, which also ultimately impacts the company’s bottom line in a positive manner. Engaged employees are another huge asset to any brand because when they are all in and fully supporting a business and their operations, that is obvious to anyone who comes into contact with them.
Employees, particularly client-facing, are often the only representation that potential customers outside of existing business has to be able to see what the company is like. When employees are engaged, committed, and loyal, it can be seen from a mile away. One conversation on the phone with an employee who is happy to do their job and is passionate about the company they work for is more than enough to draw a potential customer to that business. Again, this impacts a business’ overall profitability and brand strength.
Lastly, employees that are clearly communicated with internally and are able to trust the company they work for do not often want to leave. Employee retention rates increase significantly when they are communicated with and respected. When it’s clear that an employer cares enough about their employees to be transparent and honest with them about how the business runs and what their role is within that, employees feel that they can trust the company. The greater the trust, the greater the employee’s loyalty to the business, and the greater the chance of that employee believing in the company enough to stay long-term. When a business is transparent, clients are able to see how it runs and that the employees are loyal and committed, and are more likely to do the same themselves.
Rescource » Forbes Transparent business practices.
It’s not easy for a business to practice true transparency, both internally and externally. It takes effort, coordination, and perhaps even some hard decision-making in order for a company to get to a place where they are willing to do business in a glasshouse, with everything important being visible to all who pass by. Perhaps some companies, in an effort to be more transparent in business, will realize that they have to tweak and adjust some of their practices in order for them to be something that they are proud to put on display.
Change is not easy, and change is not always quick either. Especially when that involves revamping your business to be transparent when it has not been operating that way in the past. But when you take a moment to realize that, at the end of the day, we are all just people who are trying our best to make good decisions and get our jobs done well, it can actually be quite motivating.
Every individual is a producer in one area of their life, like in business, we also consumers in many other areas. We know that we appreciate and are drawn to honesty and transparency as consumers, whether it’s while we’re reading the label on the microwave lunch we purchased or while we are sitting in an office talking about awarding our business to a particular company. So why not practice that in every aspect of the business world? In the end, all you have to lose is, well, nothing. But there is much to gain, both financially and humanely. Perhaps the worries of losing prospects will be outweighed by the strengthened relations with others?