What happens when a company, organization or association aligns its core values with its standards? If honesty is one of the core values, then it makes sense that transparency would be the standard on which to measure success. Transparency in business today is not just a nice to have, it is becoming a must have. Access to information in our digital age is so prevalent that companies who are not working to become more transparent run the risk of hurting their reputations and their profit margins in the long run.
In a recent article from The Center for Association Leadership, best-selling author Quint Studer talks about how important transparency is to the long-term success of any business. His definition of transparency is simply “The ability of the employees and key stakeholders to see the same information that the senior leadership sees.” This might sound simple but the implications are far-reaching.
Social media has allowed stakeholders of all shapes and sizes to share or expose information about companies and organizations at lightning speed. If an employee feels they are being underpaid, they can voice concern on the website GlassDoor.com. Yelp, Amazon.com, Google Local, and many other sites solicit customer reviews on businesses. All of this information may be out of the control of an organization. In fact, it’s no secret that many companies will surreptitiously pay for good reviews on these sites. However, there is a great deal any business or organization can do to become more involved in these conversations, and that is through transparency.
So, what are some of the key areas where transparency can impact various stakeholders including customers, employees, and shareholders?
What does a company stand for? What are their core values? Do they have a clear mission statement? Are they committed to making a difference, not just profits? These are some of the facets of cultural transparency. People will naturally migrate to organizations that closely align with their core beliefs. Armed with that knowledge, both employees and customers will become advocates and brand ambassadors.
Who are the key executives, principles, and managers? How much are employees paid? Are changes in workforce or company structure discussed openly and honestly? Organizational transparency is not just a list of executive bios. It helps educate stakeholders on the how, where and why of a company’s structure. Zappos, famous for their holocratic approach to their company’s structure, has a separate group that helps other organizations adopt their formula. (This video provides a brief overview on how holocracy works. It’s a fascinating blend of a number of organizational management strategies and one that is not applicable to all companies. Holocracy is a tool-set, as Brian J.Robertson, notes, but it’s not a silver bullet.)
What are the profit and loss statements of the company? How are company executives compensated? Who are the major shareholders? Is the financial information easy to understand? Like it or not, most if not all financial data is available for publically traded companies. So why not make it more accessible and understandable? The results may surprise you. Customers, investors, and employees want to help companies succeed. Give them the information they need to make a positive impact on the bottom line.
Transparency and Your Website
Websites are one of the first and best ways any business can connect with their stakeholders on a regular basis. It is the portal to your company and plays a critical role in the transparency of your business or organization.
Robert Craven, CEO of MegaFood, a whole food supplement manufacturer, said it best in a recent article in Entrepreneur magazine. “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.” One way MegaFood accomplishes this goal is to feature live videos of their facility on their website. Customers can go on a virtual tour of the plant and see the products being made and packaged.
While live camera feeds from your company not make sense for your business, there are some things every business should include on a website. Here’s a short list to get you started.
1. Cultural Transparency
Include your mission statement and description of the core values that sets your business apart. What are you passionate about? Help people connect with your mission and purpose, and you create loyalty through trust. Include a dashboard of your values and goals. It allows website visitors to understand quickly what is being measured and how well you are doing. Johnson & Johnson has a good example of a dashboard on their website where they measure and report on their “citizenship and sustainability” initiatives. At Manoverboard, we post a Code of Ethics and a Statement of Sustainability on our site.
2. Organizational Transparency
Organizational transparency is closely linked to your cultural transparency. Are your executives firmly rooted in the cultural mission of the organization? Their biographies should reinforce that commitment. Don’t be afraid to be bold in your disclosures. Buffer, a popular social messaging tool whose mantra is “powered by happiness”, shares all their salary information, including that of the CEO on their website.
Simple as it sounds, many consumers complain that websites have missing, poor, or inadequate contact information. Anyone who has ever tried to reach a live person at a utility company will tell you this is a vexing problem. So, whatever you do, please include all relevant contact information via email, phone, and carrier pigeon or drone if necessary, so site visitors feel confident in doing business with your business. I’ve come across a few websites lately that have no way to even email a company; despite what anyone says, social media is not a form of contact.
3. Financial Transparency
As stated before, the key to transparency here is to make the information easy to understand. Tell a story with the numbers and stay away from accounting terminology. Companies can incorporate a dashboard here as well to illustrate how they are doing against any financial, social, or cultural impact goals. Remember that all loyal stakeholders have a vested interest in your success. If they aren’t already loyal to your business, financial transparency will go a long way to improving perceptions.
It’s not easy and it can be painful but it does pay to be as transparent as possible with partners, vendors, clients, and employees. We looked at three areas to improve transparency above, but there are others. Getting started will go a long way to improving your bottom line.
And keep in mind that a website is the portal to any business. If you seek to create a loyal and engaged group of stakeholders, you must provide them with an honest and open view of your business.
And, don’t forget to ask them for feedback. Wouldn’t you rather hear it directly from them or read it on a social media site? By creating a transparent relationship, your customers, employees, and other stakeholders will know they can and should bring their concerns, comments and suggestions directly to you. Over the next six months, we are planning on rolling out a more transparent feedback loop regarding our own processes, business value, and impact. It’s going to be a good ride.
You might be interested in the environmental performance of numerous web hosting choices. This research is available on request and you can download your free copy here. We will be working on an updated and even more thorough report to be launched by end of the year.