Trust is easier to earn when your company is an open book.
4 min read
Opinions expressed by Entrepreneur contributors are their own.
McKinsey’s 2019 State of Fashion report identified “radical transparency” as a top trend in its industry, as consumers increasingly demand more information about supply chains. The trend is hardly limited to fashion, however. From Whole Foods’s GMO-transparency initiative to Buffer’s open-salary calculator, companies in every sector are learning to be open about their business practices.
Transparency’s power lies in its ability to build trust between companies and their consumers and employees. And trust leads to results. A study by Label Insight found that as many as 94 percent of consumers are more apt to be loyal to a transparent brand. Customers want to know a business is being aboveboard in how it sources and makes its products and treats employees. Employees also like to know that the company they work for is operating according to sound values, which is one reason transparency has been found to have a positive impact on employee happiness. Transparency even positively impacts valuations, fueling future success.
No Guts, No Glory
Transparency can come in many forms, but the principle needs to extend to customers, employees and business partners. Often, you’ll find transparency requires you to admit things you’d rather not, such as mistakes or bad results. But by being transparent, you can build trust even when delivering bad news. Here’s how.
1. Connect with consumers on public platforms.
Social media provides a direct line of communication between a company and its customers. This makes it an ideal medium for practicing total transparency regarding business methods, wins and even mistakes. Although it can be difficult to admit wrongdoing on such a public platform, it can actually encourage customers to trust a company when they hear bad news firsthand versus via a news leak.
Your own website is an obvious place to speak your truth. Take inspiration from Patagonia’s Footprint Chronicles, which focuses on the company’s supply chain and its social and environmental impacts, openly sharing the good and not-so-good updates as well as how it’s continuously working to improve.
2. Trust your team to handle the truth.
Transparency within an organization is just as important as transparency with customers. Openly communicate news and results, whether they’re cause for celebration or not. Again, admitting missteps can feel uncomfortable, but employees will have an easier time trusting company leadership if they’re clued in to what’s going on and understand what steps are being taken to prevent similar mistakes in the future.
There are myriad opportunities to enhance transparency across your team. One simple method is to share calendars across your organization, allowing employees to see what their colleagues are working on. At Box, a cloud company, CEO Aaron Levie systemized internal transparency by using OKRs (objectives and key results), a system of communicating goals popularized by Google. “At any given time, some significant percentage of people are working on the wrong things,” Levie explains in an interview with What Matters. But it’s a problem OKRs can help rectify. Using OKRs helps everyone get in sync, clearing up confusion about company priorities and giving everyone a better picture of what success looks like.
3. Use tech to foster successful partnerships.
Practicing transparency with business partners is key to building a strong and smooth working relationship. Establish clear expectations upfront, even going so far as to share strategic plans so both parties know how the other fits into long-term goals. Be honest about any hurdles that may exist in pulling off the desired outcome. Failure to do so can delay a project and lead to wasted time and funds, not to mention an irreversible loss of trust.
To accomplish “honest disclosure,” the manufacturing industry has leaned on blockchain, which is essentially a decentralized digital ledger that accurately records transactions and can flag and settle late payments, damaged shipments and other issues. “The immutable blockchain ledger keeps both buyers and suppliers on the same page, eliminating the need to constantly reconcile data,” explains Alex Rosen, VP of business development at Chainyard, in a recent blog post. “It adds a level of transparency that the supply chain is currently lacking.”
Transparency might not always come easy, but it’s worth the extra effort or feelings of discomfort. It can win you loyal customers, passionate employees and successful business partnerships. When you embrace transparency, you’ll find the ROI on trust is immeasurable.
Pls find the link to the original article below
True Transparency Requires Sharing the Good and the Bad
Techylawyer and its authors do not claim to have written this article, we acknowledge the works of the original author